Career Development

Perspective: Why Germany still has so many middle-class manufacturing jobs

By Herrman Simon for Harvard Business Review

May 02, 2017

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Only about 1.1% of the world population is German. However, 48% of the mid-sized world market leaders come from Germany. These “Hidden Champions” are part of what makes German economic growth more inclusive: They have grown by 10% per year on average and register five times as many patents per employee as large corporations.

The reasons they are a predominantly German phenomenon are many. This includes the German history of many small independent states, which forced entrepreneurs to internationalize early on in a company’s development if they wanted to keep growing. In addition, there are traditional regional crafts, such as the clock-making industry in the Black Forest with its highly developed fine mechanical competencies, which developed into 450 medical technology companies, most of them makers of surgical instruments. A further pillar of competitive strength is the unique German dual system of apprenticeship, which combines practical and theoretical training in non-academic trades. The Hidden Champions invest 50% more in vocational training than the average German company.

Read the full perspective at hbr.org.