German Small Businesses Fuel Economy

When the words German businesses are spoken, the images that tend to come to mind are usually those of large corporations like BMW or Siemens. Surprisingly to most, the true engine of the German economy that has kept the country away from the European debt crisis is actually the Mittelstand, or the nation's vast amount of small and middle-size companies. Accounting for more than 60 percent of Germany's workforce, the Mittelstand focuses more on sustainability than growth, has not seen any effect on sales during the current debt crisis, and is reported by the Institute for Mittelstand Research to actually be cutting their debt. When compared to the debt-stricken economies of Greece, Italy, Spain, and a debt-threatened France, Germans argue that the structure of the Mittelstand, which focuses more on sustainability than growth, has proven to be a vital aspect of the country's economic prosperity.

Stemming from their success, the Mittelstand also carries a large amount of influence in public and political affairs. Contrasting with the rising demographic of Germans that wish to see the eurozone disbanded, the Mittelstand strongly vocalizes the economic strengths of a multi-national common currency, and is firmly in favor of keeping the euro intact. The Mittelstand also remembers the frustration of having to keep an eye on the changing values of several different currencies, as well as fearing that the strength of the German mark might threaten to exclude them from foreign markets. The Mittelstand has greatly benefited from the introduction of the euro, since it has allowed small companies to easily conduct business across international borders, and therefore has prompted them to educate the public about the dangers of countries leaving the eurozone or reintroducing the mark.

When examining the history of the Mittelstand, it's easy to see why this aspect of the German economy continues to excel in the midst of global economic turmoil. The Mittelstand, which has continued to survive despite two world wars, the years of economic stagnation following the fall of the Berlin Wall, and the sharp recession of 2009, has been structured around preparing for the worst. For these reasons, companies like Christian Bollin Armaturenfabrik, a small machinery company, have developed business practices that help sustain their companies, such as not allowing any business partner to amount to more than 10 percent of their income. Although practices like these have stunted some of the Mittelstand's growth potential, that is the least of the Mittelstand's concerns. As Christoph Lamsfuss of the Institute for Mittelstand Research reported, "They want to increase their independence from banks and external financing" and that "they want to make sure the next generation inherits a solid company." Clearly, the sustainable and battle-tested Mittelstand has proven to be the fuel of the German economic machine, and it has no intentions of slowing down.