Question

What lessons can other developed nations learn from the success of the Mittelstand?

Answer 1

Mittelstand firms are small and medium-sized enterprises (SMEs) in Germany which employs the majority of the country's workforce enjoying robust growth. they are considered as a backbone of German economy, it include more global market leader than any country.

The main characteristics and competitive strengths of Mittelstand is they focus on niche leadership in global markets. They usually compete with competitors with value addition and maintain low level of debt in their firm, they adopt for clients and they use customer needs as valuable source for further innovation.

These companies tend to be family oriented and managed, family values are important part of the culture and it really defines it. It is very important to keep generation continuity, even for the big companies.

Decisions are generally focused on long term results, Mittelstand companies are dedicated for people, more precisely, continuity of employees. Employees of the Mittelstand are, in turn, faithful to their companies. The successful companies invest 50% more in training than the average firms around the world.

A key to success is an innovation policy based on the promotion of public-private collaborations in applied research and education. Germany also encourages these firms to not only deliver high-quality training to their employees, but to deliver it to the broader business community.

Mittelstand enjoy far superior support, and from a wider mix of banks in their regions, notably via municipal savings banks and development banks. There is also nation-wide grants structure and governments usually offer them long term support to reduce the risk faced by the Mittelstand.

Generally Mittelstand are in geographical concentration of interconnected businesses, suppliers, and organization in a particular field, increasing the yield with which firms compete. Mittelstand can also advances by developing new technologies, regularly working together with one of Germany’s many research institutions.

The focus for these businesses must also be about delivering responsibility towards environment and people, social aspects are the characteristic of Mittelstand, it is not a surprise to talk about the social responsibility within German SMEs. Being consequent with the actions and the attitude of a firms towards the environment is really important to reach the success.