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Manufacturing Policy Portal [beta]

Hosted by the Centre for Science, Technology & Innovation Policy (CSTI)

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Germany Overview



Advanced manufacturing has long been a strength of the German economy, and it remains an important priority for the German government to maintain its standing as a world leader in high-technology manufacturing industries and exports.  Maintaining a manufacturing base is critical to maintaining a capacity to innovate.  According to the Manufacturers Alliance for Productivity and Innovation, manufacturing accounts for nearly 21% of the German economy (and 7.7 million jobs), compared with 13% for the United States and 12% for the United Kingdom.  German firms are responsible for generating over a quarter of EU manufacturing turnover and for over a tenth of global exports of manufacturing products.  Strong overseas demand has in recent years more than counterbalanced weaker demand from within the Eurozone.

German manufacturing encompasses a broad range of industries, notably automotive, machinery, electrical equipment, and chemicals, with a wide variety of company sizes and structures.  Germany is prominent in consumer goods, and also has strengths in capital goods, and industrial durables, which further underpins the nation’s manufacturing capabilities and features a wide variety of company sizes and structures.  While Germany boasts some of the most prominent large multinational corporations engaged in manufacturing worldwide, most noteworthy are the small and medium sized enterprises (SMEs) usually collectively known as the Mittelstand (though not completely synonymous – the Mittelstand is a subset of German SMEs, typically family businesses generally focusing on niche products and markets, with roots stretching back for many decades or even generations), which account for around 70% of all manufacturing exports and almost 80% of employment.  The Mittelstand possesses a reputation for quality, with over a thousand German SMEs holding the number one or two position in the world in their respective niche businesses.  This has helped German firms to better resist Asian competition during the Great Recession, in contrast to other countries.

Germany has long had an institutional infrastructure in place that supports and promotes advanced manufacturing.  German manufacturing firms are well supported at national and regional level, by education and training, the research infrastructure of the nation, and by other institutions such as employer associations and unions.

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