Human connections are essential to sustainable environments

How social sustainability and infrastructure improve quality of life

We started off the day with a group reflection in the hotel. In our conversations about our first two class days in Freiburg, we pointed out differences we saw in the lifestyle and behavior of people in Germany and how these differences relate to city planning and the transportation infrastructure .Multi-modal transportation infrastructure along with the development of public space allow for easy access to city centers and the development of social capital. Our lecture on Germany’s shift toward renewable energy in Shonau and our bicycling tour through sustainable neighborhood projects in Freiburg gave us some new perspectives on how sustainability can be implemented and how these actions can make positive impacts on overall quality of life while minimizing environmental impact.

Farmer sell fresh berries and produce in the Freiburg Farmer’s Market in Munsterplatz.

After the reflection, we went to the farmer’s market as a group. This was a fun way for us to be a part of the culture of Freiburg and see how many residents interact in public spaces and get their food. One interesting point that we have discussed several times on the trip is how with the farmer’s market culture and community agriculture projects, people and farmers can develop relationships. These relationships help societies become more connected to its food sources and thus make the systems more economically sustainable, stable and environmentally conscious.

Our first business day was a visit to Ika, a trade company for industrial equipment. Their work spans across industries and over 70 countries. Ika is classified as a mittlestand company or a small-scale company in Germany that is characterized by a family ownership structure. These companies promote innovation, social responsibility and community ties within their industry as these values increase social sustainability while also making the company more competitive. Enhancing relationships with communities, customers and employees are focuses that are good for business and essential in maintaining long-term success.

Freiburg residents congregate during lunch time on a sunny Thursday to eat and shop in Munsterplatz.

Mittlestand companies often develop machinery or other technology and create dominance in these markets. They are dedicated to continual development and improvement of products, personnel and purpose in order to ensure quality. These investments in their employees improve quality of performance and improved work culture while also allowing the employees to be a part of the decision-making process. These are all contributing factors that make Germany one of the strongest economies in the world.

-Marques Wilson

IKA and the German Middelstadt: A Model for Economic Stability

We explored a Mittelstand company and what makes similar companies Germany’s economic backbone

Our day surrounded the idea of the German “Mittelstand.” These are small to medium sized companies that are family owned for multiple generations and their annual profits do not exceed €5 billion. Some other characteristics of Mittelstand companies include being incredibly innovative, leaders in their respective industries, keeping out of the public eye, and focusing on the long term stability of the company rather than enjoying short term profits.

As the professor from Innovation Academy and Dr. Gangi informed us, Mittelstand companies make up around 60% of jobs in Germany. What is even more incredible concerning the Mittelstand is it’s sustainability. By most metrics Germany is not an innovative country. In a list of entrepreneurial countries Germany is rarely at the top among the likes of Israel and the United States, countries that have many start ups and are celebrated for their numerous entrepreneurs. However, in an age of constant innovation and globalization Mittelstand companies remain at the top of their industries globally. Dr. Gangi told us Mittelstand companies are incredibly innovative and reinvent themselves to ensure their place in an always changing global market.

The Mittelstand is a business culture that is studied by many economists and businesses worldwide but is difficult to reproduce anywhere but Germany. They have allowed Germany to remain a top global economic player. In fact, Dr. Gangi joked that recessions should be German companies’ business strategy because numerous studies have shown German companies expand their market share shortly after an economic downturn. Their stability, focus on long term goals, and strategy of scaling back hours not firing workers allow them to hit the ground running before other companies following a recession.

In the afternoon after our visit to the market we visited a Mittelstand company called IKA. It was originally a drug store when it started in 1910 before developing and reinventing into the laboratory equipment and technology manufacturer it is today. It is now owned by the fourth generation of the family that founded IKA. The company employs 800 people on four continents and leads the world market for most of its product groups.

IKA was the Middelstadt company we toured today. They showed us many of their laboratory equipment and we learned some of the company’s history.

IKA officials gave us a tour of their different products in their experimentation room. Unfortunately, they did not allow us to take pictures inside their facility. They walked us through their many product groups including shakers, centrifuges, grinders, magnetic spinners, heating baths, photo bioreactors, calorimeters, and many other instruments. It displayed their innovation and impressive product field that keeps IKA at the top of its field. Like many Mittelstand companies IKA enjoys incredible notoriety in its chosen niche but is not well known to the general public.

Our visit lasted for a few hours and ended with banana milkshakes made using IKA equipment. The German Mittelstand is a model for economic sustainability and will hopefully inspire other US companies to adopt similar values and goals.

-Duncan Richey

The German Mittelstand

Germany is an “export champion,” and many of these exports come from Mittelstand companies.

IKA is a Mittelstand company located in Staufen. They build laboratory equipment. (Photos were not allowed inside the facility).

Companies that identify as a part of the German Mittelstand are often considered “hidden champions.” These businesses are frequently smaller and family-owned with a low level of publicity. They have a turnover of approximately five billion Euro and are considered either a Top 3 enterprise on the world market or they are ranked number one on a single continent.

Germany has 1307 hidden champions (16 per million inhabitants), placing it at the top of the chart. There are fewer in eastern Germany than in western Germany. This is likely due to the fact that eastern Germany was occupied by the Soviet government post-WWII when it split into four. It later became the Deutsche Demokratische Republik (DDR) before Germany was reunited in October 1990. Still, 1307 is a large number. The historical system of mini states may have influenced the number of hidden champions present today. At that time, there was an openness to internationalization and a competence of international business. Today, these businesses create nearly 98,000 jobs each year.

But Mittelstand companies are not enormous organizations themselves. They can range from fifty to several hundred employees. Their media presence is also small. A hidden champion’s share of media presence with a big corporation is roughly 16%, while the big corporation is the other 84%. But hidden champions employ 80% of people, while big businesses employ a mere 20%. Hidden champions hold a social responsibility and view the working world as a social place. Employees and customers are very significant, even in decision-making processes. The top five qualities of a hidden champion (rated by a customer) are the product quality, delivery schedule adherence, economy, consulting before a sale, and customer proximity.

The strength of hidden champions comes from within. The employees are loyal, motivated, qualified, and flexible. The work atmosphere is positive and productive. Many hidden champions focus on the long term and invest in sustainability measures. It is no surprise that Mittelstand companies become so successful over time.

-Kaitlyn Ave’Lallemant