A look at the German economy
According to a survey of German executives by the influential think-tank Ifo confidence German companies have increased in January 2003 for the first time in eight months – but gradually, from 87.3 to 87.4. A survey by the ZEW, another brain, confirmed these results. On past form, however, this confidence level heralds a contraction of 5.6 percent in industrial production.
This is consistent with other figures of thought: growth insignificant, drowning out the high interest rates imposed by the European Central Bank, € 1 discourage strong exports and a sharp increase in unemployment discourage more 10 percent. German problems are compounded by the global recession of the evaporation of the industry (including telecommunications) and a sharp drop in investment universal.
The main victims are the Mittelstand – the 1.3 to 3.2 (by definition) of dollars mostly owned by small German companies medium enterprises (SMEs). Among the 1000 German firms, 997 are by definition liberal Mittelstand. The real figure is closer to third parties. strict criteria to reduce one in thirty companies.
These differences of opinion reflect the lack of clarity of the concept that has more to do with the style of ownership and management and a single fund historical and cultural objective, economic criteria.
The Mittelstanders form the backbone and the true barometer of the German economy. Undertake to nearly 22 million workers and apprentices and more than 3 million "self-employment (owner-employees) – 70 per cent of the workforce Working in Germany a total of more than two fifths of the total turnover of trade in the country are generated by them, and half the value. and a third of all exports.
investment requirements of Mittelstand firms total $ 20 billion dollars each year. But access to capital is narrowing. shaky local banks are reluctant to risk capital markets are lethargic, private investors and little fear. Most of the capital adequacy requirements of Basel 2 will increase significantly the cost of bank lending risk borrowers, such as the Mittelstand companies.
According to a survey by Kreditanstalt für Wiederaufbau German Development Bank Owned by the State, a third of all companies found access to restricted bank loans in 2002. During the previous 12 months to March 2002, German banks has approved seven percent fewer new credits. Listed banks reduced lending by a debilitating one sixth.
According to The Economist ready to Handwerk (craft) companies declined by half between 1993-2003. The savings of public sector banks, hitherto the main source of funding Mittelstand, are hampered by increasingly intrusive European Commission. The Neuer Markt, which is described as Germany's answer to NASDAQ, fell 96 percent and merged drugs in existence.
The family is not what it used to be. Least 40 percent of Mittelstand businesses are passed on to generations today. Many are forced to introduce pesky outside investors and the administration, management or contracted. Banks are much more curious than they were. A traditional time long-term business horizon gives ground to a quasi-American focus on the tyranny of the bottom line. Capital expenditure, product development and job security all suffer.
Founders are often to blame, not the majority, as calmly consider their own death or retirement and prepare a plan for orderly succession. Is at these junctions of regime change that failures occur most companies, according to Sir Adrian Cadbury, author of "family businesses and government. "
According to Creditreform, quoted by The Economist, a record 37,700 companies collapsed in 2002. The Financial Times puts the figure at 45,000. And 2003, witness of another bumper crop. The figures, according to the Institut für Mittelstandsforschung in Bonn, are even more heartbreaking. In 2001, 386,000 new companies were liquidated and 455,000 formed to provide 69,000 new businesses.
New start-up training is at its lowest point. In 1991, the net gains amounted to 223,000 in 1995 to 121,000 in 1998 to 100,000. The picture is especially grim in the east. About 129,000 net new startups formed in 1991. But the public has come to generate only 6,000 a decade after its bloated and venal construction, but all destroyed. Once again, 2002 was hardly better.
Heart measures declared by the fragile government coalition on January 6, 2003 – grand title of "Mittelstand Offensive" – are unlikely to invest less in red ink. bureaucracy, more financial aid generous, simplified accounting and a fusion of national development banks will do little to help the great flood ravaged east, for example, where demand internal collapse paralyzes local entrepreneurship.
Eastern businessmen strongly the lack of management experience and skills. Their networks of customers and suppliers are thin on the ground. Most of them are suits of a single product. The events are rare and usually involve foreign equity holders. Fortunately, the market working in the East is more flexible than its counterpart in the west and the bureaucracy responsible for the sclera. Hourly labor costs – wages stupidly giddy and benefits – are also significantly lower in the eastern Länder.
Arthritis and regulatory framework favorable to workers and a business system for large tax, in effect, instructed the Mittelstand. But in any case, the labor market in Germany has liberalized government and Chancellor Schroeder Tax rates dropped in all areas. We must look elsewhere for the causes of the inexorable deterioration of small countries.
It is notable that the decrease of the Mittelstand coincides with an unprecedented increase in small and medium entrepreneurship in the developed and developing countries. It seems that Germany simply spectacular launched what has become, decades later, an economical way.
In fact, it's huge success in Germany – the miracle of the postwar industry – which housed the seeds of its decline and fall. Full people rich are a bad risk-taking entrepreneurs. German unification was its last attempt to rejuvenation. Failed because the West chose to block this with an unrealistic price mark, a tangle of rules and regulations, an artificial construction bubble and Settlement forced its industrial base.
If it is not broke, do not fix it, goes German folk wisdom. On the surface, everything works perfect: infrastructure Germany is bright, efficient health, its environment pure, its welfare unsurpassed. Why play with success? – You wonder the average citizen this region into an economic powerhouse. Only recently a few brave souls admit that the miracle has been consumed and that Germany, unreformed, may be facing a Japanese decade.
second Germany attempted revitalization takes place outside its borders. The European Union's enlargement to the countries of Central and Eastern Europe is largely a project German. Labour cost materials, abundant raw hunger, growing consumer markets in the new members – promise to resuscitate the German industrial sector.
Large German companies have taken note of this interior and decisive action resumed – but not the Mittelstand.
Within the multidimensional crisis, not to colonize the east. Battered by cost pressures, better informed customers, the level of aggressive international competition, rapid technological changes and expensive, spiraling needs for investment in R & D, training and marketing – the Mittelstand companies are punch-drunk and more xenophobic and self-destructive "Independent" than ever.
It would be difficult to find a significant representation in the German Mittelstand drive to diversify abroad either by establishing a presence in export markets, or by supplying cheaper countries. As the Center for Advanced Studies at the University of Cardiff, notes, rarely Mittelstanders outsource key suppliers, maintain open-book accounting, engage in simultaneous engineering, sign long term contracts, or reduce the number of direct suppliers in the framework of the implementation of lean manufacturing strategy.
Many SMEs operating as employment agencies in family place of business as well governed. Centers of innovation and early adoption of cutting edge technology – the Mittelstanders recently became the bastion paralytic conservatism. Most of them support the liberalization and deregulation concerned. But few people know what to do with these poisoned chalices, to be much less competitive than before it in 1970.
Therefore, the Mittelstand sector doomed?
No, according to a report 2001 by the Institute for Development and Peace at the Gerhard Mercator University of Duisburg. The authors believe that despite all the shortcomings of the Mittelstand business model, could be a model for Latin America and other developing regions.
The Mittelstand survived largely intact wars and the division of the devastation, and unification. There is no reason not survive the second round of globalization – they did marvelously in the first round, a century ago. But the government should recognize the contribution Mittelstand of the economy and reward these struggling firms with a tax, financing and regulatory environment conducive to job creation, innovation, the continuity of ownership and exports.
The reason for the hope that Germany finally wakes up. Universities offer courses focusing on management family. Online and online exchanges – such as EuroLink – connect German SMEs commitment to private investors, strategic partners and fund managers. Small business service centers and one-stop shops proliferate.
An army of consultants and trade reporting any management capabilities Network. Others peddler seminars, Web design and Internet literacy lesson plans. Software companies like SAP, IBM and Sybase maintain special departments Small business. Think tanks and academic institutions to devote more resources to the phenomenon of SMEs. There is even an Oscar for Mittelstand excellence.
Initiatives Spring in the most unlikely places. DG Bank teamed up with the German newspaper "Die Zeit" to "promote small businesses that have innovative ideas "fairs. Mittelstand trade (for example, in Nuremberg last year) are present. venture capitalists, portfolio managers and hunters track head closely.
Business Angels Network Germany (LIE) is a group of individual investors who also contribute time and management expertise to new technology companies. Lobbying and advocacy groups, trade publications, public relations firms – all the needs of German SMEs.
Is less a funeral of a resurrection.
About the Author
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