The German Model

Germany is certainly an advanced economy that has strong high-tech export. And that's one of the reasons why it survived the global financial crisis while many other European countries didn't. Economist recently has a piece showing some of the traits shared by many mid-sized but successful German firms.

While we are all familiar with names like Adidas, Simens, BMW and etc., the corner stone of Germany's economy is a strong and healthy body of midsized companies, or mittelstand in German. 90% of these mittelstands operate in the business-to-business market, rather than selling directly to end customers. Most of them are also located in countryside, lowering the operation cost significantly. Their products mostly focus on market niches, where German's excellence in engineering, especially in mechanical engineering, could be well capitalized. Dorma makes doors and all things door-related. Tente specialises in castors for hospital beds. Rational makes ovens for professional kitchens. This strategy helps them avoid head-to-head competition with global giants (“Don’t dance where the elephants play” is a favourite Mittelstand slogan). It has also helped them excel at what they do.

I myself also happen to work for a German company in U.S., so I've learned a bit or two Germany's corporate culture as well. What strike me the most in German companies are three things:

1. German workers are incredibly focused on the jobs that they are given, and patiently become highly specialized at them. I've known some PhD-level colleagues in Germany do only one or two things in their field for years. This kind of stubborn persistence is hardly tolerable in U.S., but finds itself respectable in Germany.

2. German companies are among the top of the world in terms of respecting knowledge and experience at work. Technological expertise takes a long time to accumulate, just as a good engineer is hard to come by. Germany knows it well, so they treat knowledge-workers in a very respectful way. Science and technology are among the most secure, and respected jobs in German society. Doctors are proud to put their PhD titles even on their home doors.

3. Germany has a highly efficient and pragmatic apprenticeship system. Not everybody needs to go the universities for a successful career. In fact, if you have decided that solving abstract problems is not as interesting as building a beautiful automobile, you could opt for vocational schools in the earlier stage of the secondary education, and still find yourself very demanded in the job market. What's more striking is, students from those vocational schools see as broad a career avenue as those who graduate from a university, if not broader. Companies recruit them as apprentices. They learn from senior workers a certain technique until they perfect at it and become masters themselves. That's how a Zeiss lense is made, as I know.