Tag Archives: Mittelstand

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