German industry generates high sales

In most industries, sales have increased in recent years despite considerable economic fluctuations. Export-oriented sectors in particular, play an important role. The front runner is still the automotive industry with sales of 436 billion euros in 2019. As an innovation leader, it makes an important contribution to growth and prosperity. Vehicle construction also secures sales for other areas because it is closely linked to companies in the chemical, electrical engineering, steel, metal and textile sectors.

But companies in other industries also generate high sales, for example in the health industry (372 billion euros in 2019) or in the electrical engineering and electrical industry sector (191 billion euros in 2019). With a broad service portfolio, these industries offer a wide range of employment opportunities.

The German model of success

The US magazine “Time” recently summed up the success of the German economy as follows: Many companies in Germany have specialized in the “unsexy side of the industrial spectrum” – no smartphones or iPads, but machines, supplier parts and heavy equipment.

Many German companies, for example car manufacturers and the world’s third largest software supplier, will attach importance to the fact that their own products definitely belong on the “sexy side”. But in essence, the analysis fits, according to which highly specialized industrial companies with highly specialized goods are Germany’s growth engine. What went down a bit in the age of the long-vaunted virtual and financial added value is now pushing forward as a guiding principle: Industry is and will remain an important basis for prosperity. With its high proportion of industry, the German economy is well- positioned worldwide.

The vast majority of German goods exports are industrial goods and German companies are world leaders in many areas and in many markets. This applies, for example, to so-called green technologies, i.e. products in the field of environmental and climate protection. In the promising sector of renewable energies, i.e. photovoltaics, wind power and more efficient power plant technologies, the German economy has a high share of the world market.

However, Germany is not only considered a land of great innovations in environmental technology. The pioneering inventions include the motorcycle, the tram and the automobile. In the globalized world, a country’s innovative strength plays an essential role in order to survive as a global player. In 2019, Germany was in first place in a European comparison with 67,898 patent applications. In order to guarantee this innovative capacity, Germany’s researchers and engineers have to develop creative ideas and boldly implement them. The lack of qualified young professionals is an obstacle, however. In order to further strengthen its innovative strength, Germany is therefore also dependent on the immigration of highly qualified specialists. In short: it depends on clever minds

The largest economy in Europe scores above all with its good infrastructure, the high degree of development of companies and the service sector, higher education and high-quality vocational training, for example in the craft sector, and not least with its innovations.

In order to maintain innovative strength in the future, Germans are investing in research and development. In 2020, Germany spent around 3 percent of its gross domestic product (GDP) on research and development. That is a considerable proportion in a global comparison.

Meet the middle class

More than 99 percent of German companies are part of the Middle class. In other countries, this is not so pronounced and in some, the German word is even adopted in their own language because there is really no equivalent for it. The spectrum ranges from small, innovative software forges to globally active machine builders to traditional craft companies and much more. Statistically, all companies with fewer than 500 employees are considered to be medium-sized. Often, however, much larger companies are also included if they are run as “medium-sized”. What is meant by this is that the owner largely makes the decisions relevant to corporate policy himself – and assumes risk and liability. The vast majority of medium-sized companies try to secure the company’s long-term existence and value sustainable relationships with customers, suppliers, and companies. Even as an employee here you are more than just “one of many”. Many medium-sized companies are also involved in their regions as sponsors of education, culture, and sport.

Many companies in the “German Middle Class“ are – in keeping with the German tradition of inventing and tinkering – technology-driven. The main selling point for their products and services is usually not the price, but the quality and the high level of innovations implemented. A large number of these companies are market leaders in their sector in Europe or worldwide. With the mostly manageable structures in companies, many employees from various disciplines such as development, production, sales, and service are involved in the innovation processes and thus contribute to innovation.

Innovations often come from the so-called “hidden champions”, which are mostly largely unknown medium-sized companies that are among the three strongest companies in the world in their specialty markets.

Germany’s economy benefits from around 1,500 such hidden champions. Also because they often sit and produce hidden in the German provinces, their success is sometimes underestimated. Quite a few hidden champions employ several thousand people. They are valued as employers because they align their business with the long term and often offer secure and well-paid jobs.

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