Question

Mittelstand: Explain the importance of the “Mittelstand” for the success of German manufacturing and employment. If necessary, consult the article assigned in class.

Answer 1

Before going in deep we must understand what Mittlestand actually is. So Mittlestand and actually refers to small-medium enterprises.

For this I have read the article XYZ and then came to the conclusion that Mittlestand and is an important sector in Germany and plays a vital role in development of the manufacturing and employment. I will discuss some points below-

• Family owned SME's

In Germany most of the mittlestands are held by family so they normally have long term goals due to which they have stable client relation and also a good human relation policy which helps them grow.

• Government funding

​As mittlestand is backbone of the country, government supports the SME's in many ways like in research, investment, foreign trade, etc.

• Strong industrial sector

​Compared to other countries around the world, SME'S in Germany have a strong industrial base. A querter of employees work in this sector. Many capital goods are also supplied to abroad.

• Success in abroad

​"German Mittlestand" is also successful in abroad. These SME's set up abroad have strong positions in foreign markets.

• Generator of jobs

​Even at the time of crisis, Germany had a continuity based approach for jobs because of SME'S.

• Low youth unemployment

​Four fifth of trainees receive their training in the SME's in Germany. Germany's vocational training is considered as a model in all over the world.

• Innovative

There is a lot of innovation in the German market as there is a lot of investment done on research and development.