Sample Economics Essays On German Mittelstand

Homework Question on German Mittelstand

  1. Research recent articles on the German Mittelstand (the best are in The Economist), and make the connection with firms diversifying, focusing on their core competencies and also economies of scale.

Homework Answer on German Mittelstand

Mittelstand is a term used in reference to the medium-sized enterprises in Germany. Mittelstand companies are predominantly family-owned firms, and are mainly located in the small towns (The Economist, 2012).  The corporate decision-making process of the Mittelstand companies is largely shaped by their values, ownership structure, and tradition (The Economist, 2014).  In Germany, small and medium sized enterprises (SMEs) account for almost 80% of the jobs in the private sector (Blackstone & Furhrmans, 2011).

In addition, nearly 98% of the over 350,000 exporters in Germany are Mittelstand companies. Economists believe that the Mittelstand are the mainstay of the German economy (The Economist, 2012). These companies were instrumental in ensuring that Germany did not suffer the negative consequences of the recent global financial crisis (The Economist, 2012). According to Blackstone and Fuhrmans (2011), Mittelstand are key players in the valuable niche markets of the German economy. To the average consumer, these niche markets are largely invisible. They mainly deal in specialized machineries, tools, and parts (Blackstone & Furhrmans, 2011).

Homework Help

The key philosophy of the Mittelstand companies is to always seek niche markets, and for this reason, many companies across the world find the Mittelstand model suitable for boosting jobs, growth, and exports, and it is hence worth of adoption. This is because it is both efficient and highly innovative (The Economist, 2012). Mittelstand companies are predominantly family-owned; for this reason, succession means that leadership remains within the family for generations.