Staying power of the German Mittelstand
In 2015, Germany had 3.5 million companies, all of which employed nearly 29 million people. Of those companies, 99.3% were classified as small and medium sized, and employed 61% of the workforce and 82% of apprentices. Only 0.7% were large companies, or those that employed more than 249 employees and had an annual turnover of 50 million euros.
Germany’s SMEs – or "Mittelstand" are usually owned and managed by one group. So, responsibility also rests on that same group. That lean structure and size also allow for swift decision-making and the needed flexibility to adjust to market demands.
Road Map for International Companies Wanting to Enter the German Market
If you're looking to expand your company internationally, one of the very best markets to start a business is Germany.
What Makes Germany Such an Attractive Market?
Perhaps the most important reason for considering setting up a company in Germany is that it's ranked the number one market in Europe, and number four worldwide. There are over 45,000 foreign companies already established here, accounting for a workforce of around 3 million, which equates to 25% of jobs functioning in the export sector.
International Finance Corporation Findings
Germany scores so highly as a country for doing business because of a number of factors. The IFC states the following world rankings out of 190 countries for various aspects of operating as a business in Germany:
Demographic Challenges in Germany
The German population is around 82,15m people. After a continues decline from 2003, the population grows from 2011 onwards. Main reason is the high number of international migrants to Germany.
But based on certain assumptions regarding the birth rate, life expectancy and net immigration, the Federal Statistical Office predicts that, by 2060, Germany's population will shrink by up to 20% from today's figure.
Despite the growing numbers of migrants, immigration can`t resolve the fundamental challenges in the demographic process in Germany.
The trend in Germany regarding demographic is clear and we look at the implications it will have for doing business in Germany.
We estimate the gross domestic product will decrease because the total number of hours will decrease. While less people will work the GDP will go down.