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Section : Economics

Make in India: Some lessons from Germany
All in all, more than 99 percent of German companies are SMEs. In absolute figures, that means more than 3.6 million companies, providing more than 60 percent of all jobs in Germany.

By Anil Gupta

Prime Minister Narendra Modi has given a call for "Make In India".He wants investment from everywhere to make India a 'manufacturing hub'. India has so far been treated as a 'knowledge hub'.Foreign companies preferred India as a Business process Outsourcing destination.But now Vietnam and other countries are giving a competition to India in this field.Of late some foreign companies have started calling India KPO. Knowkedge process outsourcing.But China from the beginning of economic reforms preferred manufacturing sector by providing cheap labour to the big companies from the west.And at present China is visible everywhere. Manufacturing sector is very important for economic health of a country.And Second largest country ( populationwise) of the globe can not ignore this sector. But what should be the model of manufacturing sector so that employment opportunities are created in the country's more than 50 million unemployed.

In this respect we can take a cue from Germany which encouraged manufacturing sector by promoting SMEs that is Small and Medium enterprises.Let us see how they did it:

Introducing the German Mittelstand

Alongside the major, world-famous companies, there is also a whole range of small and medium-sized companies in Germany which provide a large number of jobs and are extremely productive: these small and medium-sized enterprises, or SMEs, make up what is known as the “Mittelstand”. This is not so much the case in other countries and in some, the German word has even been taken up into the local language because there is no exact equivalent for it. And so it’s about time we introduced the German “Mittelstand” and these very special German companies. Among them, there might be a potential employer for you.

Introducing the German Mittelstand

Virtually all German businesses are small to medium-sized companies and therefore fall into the “Mittelstand” category. They range from small, innovative software-smiths to globally operating mechanical engineering firms right through to venerable old artisan businesses, and beyond. In purely statistical terms, any business with fewer than 500 employees is an SME. But the term “Mittelstand” is often used to include much larger companies too if they are run in the same spirit as a small or medium-sized enterprise. In that case, it means that the owner or owners take the business decisions largely on their own – and assume the risks and liability. In these companies, the boss usually has close ties with the business and the employees and bears a particular responsibility for ensuring job security.

All in all, more than 99 percent of German companies are SMEs. In absolute figures, that means more than 3.6 million companies, providing more than 60 percent of all jobs in Germany. These companies form a many-faceted, dynamic group operating in all kinds of sectors and offering all kinds of products and services. If, as a foreign qualified professional in Germany, you are looking to SMEs to find a potential employer, or have perhaps already made contact with some, you might encounter two absolutely typical characteristics:

Firstly: a very special mindset in lots of ways. Most SMEs are working to secure the company’s long-term existence and place great value on lasting relationships with customers, suppliers and other businesses. As an employee too, you are more than just “one of the crowd”. Moreover, many SMEs take an active role in their regions by sponsoring education, culture and sport.

Introducing the German Mittelstand

Secondly: Many German SMEs are – in line with the traditional German taste for inventing and “tinkering” – technology driven. The principal sales argument for their products and services is not usually one of price, but the quality and the large number of innovations that have found practical implementation. A large number of these companies are the European or worldwide market leaders in their sector. Within the usually fairly small, internal structures of these companies, numerous employees working in various disciplines, such as development, production, sales and service, are involved in the innovation processes and so play their part in innovation too. To ensure that small and medium-sized businesses are also able to stay competitive in the future they need to be innovative, especially where digitisation is concerned. This is why the German government supports the use of modern, user-friendly information and communications technology (ICT) in SMEs.

Admittedly, these are just two rather general remarks to start with about German SMEs as employers. We have put together more detailed information about these companies in eight “Facts”. On the following pages, you’ll find some interesting details and surprising figures. This is where you can discover the many facets of the German “Mittelstand” for yourself!

Fact 1: German SMEs prize their employees

Fact 2: German SMEs are family-minded

Fact 3: German SMEs are modern and cosmopolitan

Fact 4: German SMEs offer enticing career opportunities

Fact 5: German SMEs invest to create more jobs

Fact 6: The strongholds of German SMEs

Fact 7: German SMEs do business for the long term

Fact 8: German SMEs have a strong sense of social responsibility


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