By Pierre COUVEINHES
By Jean-Louis BEFFA
Président d’honneur de la compagnie de Saint-Gobain
Although Germany’s economic situation is better than that in many other EU lands, this prosperity can mainly be set down to the country’s successful integration in the globalized economy. This success stems from four principal assets. First of all, the country’s territorial organization with sixteen länder s endowed with broad economic powers has set the conditions for several major metropolitan areas to emerge built upon flourishing industries. Secondly, the quality of labor relations, grounded on a sense of compromise and of national solidarity. Thirdly, a “comanagement” that, involving both corporate executives and representatives of the personnel, is characterized by the quality of negotiations and a well thought-out wage policy. Finally, an effective system of innovation with ongoing efforts to find industrial applications for the advances made by science. Nevertheless, Germany also has shortcomings and impediments that might jeopardize this success.
By Guy MAUGIS
Président de Bosch France
Created 125 years ago, Bosch, now one of the biggest groups in Europe, has 306.000 employees and sales amounting to €52,5 billion. Enthusiasm for innovation, the quest to continually improve quality, a strong international development and a concern for people, Robert Bosch’s legacy has served as the underpinnings for the company’s success since its creation. We also come across these characteristics in most medium-sized German firms.
By Sebastian SICK
Avocat, docteur en Droit, LL.M.Eur., chef du service Droit des sociétés, Fondation Hans Böckler
This description of the German system of “codetermination” (or “comanagement”) draws attention to the cooperative nature of this model of worker participation, which produces a balance between the interests of the parties involved in production. Business and political leaders have often showered praise on this system for its success during the current economic and financial recession. The levels for applying codetermination are explained from the company level (council of supervision) to the plant level (work councils). Interactions with labor unions are described; and the challenges, pointed out with which German codetermination must cope in the future.
By Gerald LANG
Professeur à Kedge Business School, chercheur associé à l’École Polytechnique
et Nicolas MOTTIS
Professeur à l’ESSEC
In the heated debate over the past few years about divergence between the French and German economies, Germany’s is often said to be more efficient than France’s. Most of these discussions have focused on each land’s structural, macroeconomic characteristics. In France, emphasis tends to be placed on the backing that public authorities provide to firms (through the fiscal or welfare systems, labor costs, subsidies to certain industries, etc.), whereas this aspect is secondary on the other bank of the Rhine. Oddly enough, one aspect is often overlooked, even ignored: management. The “German model” operates in everyday activities at the workplace, in both small and big firms, and its success very much depends on the management of projects and work teams. This focus on the characteristics of German-style management and its differences with French management seeks to provide an understanding of the German model from a microeconomic perspective, a fuller analysis that refers more to concrete practices in companies than to macroeconomic arguments.
By Isabelle BOURGEOIS
Chargée de recherche au Centre d’information et de recherche sur l’Allemagne contemporaine (CIRAC), rédactrice en chef de Regards sur l’économie allemande
In Germany, apprenticeship is not at all a road to nowhere. Instead, it is the major way to acquire occupational skills and qualifications. Nearly two-thirds of Germans in the labor force – in all, 23 million persons – have an apprenticeship diploma obtained following vocational training at the secondary school level. Underlying apprenticeship is the strong participation by companies: 80% of training time takes place inside firms, and is funded by them. Both employer organizations and labor unions support this system. Apprenticeship allows for a close match between supply and demand, whence a lower jobless rate among young people under the age of 25. It also strongly contributes to social cohesion. By dispensing technical knowledge and know-how, this “dual” training system provides a powerful lever for making German companies more innovative.
By Wolfgang KNAPP
Directeur de la coopération laser franco-allemande Fraunhofer ILT
Founded in 1949, the Fraunhofer Gesellschaft (FhG) has become the largest establishment for contract-based research in Europe. This research accounts for more than 70% of its income: €1,6 billion out of a total annual research budget of €1,9 billion. The FhG has 66 institutes and research centers throughout Germany. Its major objective is the practical application of scientific know-how as a way to develop new technology. Its activities, which entail a moving equilibrium between innovation and applied research, lie in between industry and basic research (the domain of universities and organizations such as the Max-Plank-Gesellschaft). The FhG is the major but not the single player in German innovation. Research under contract is a marketplace; and as on any market, several players might enter the competition.
By François HELLIO
Avocat associé, CMS Bureau Francis Lefebvre
et Christophe JOLK
Avocat, CMS Bureau Francis Lefebvre
Since 2000, Germany has reduced withholding taxes on wages, which have remained stable in France. In 2008, these taxes amounted to 22,6% of the French – but 21,8% of the German – GDP. This difference, now of 0,8% in Germany’s favor, used to be, in 2000, 1,5% in favor of France. Other issues, such as the minimum wage, the time spent working or vocational training, shed a stark light on differences between German and French social policies. However French firms suffer from the tax system’s chronic instability. Taking all aspects into account, corporate taxes in France might turn out to be more advantageous than in Germany, even though this does not show up in international comparisons, because French fiscal regulations are complicated and obscure.
By Frank ELOY
Membre du directoire de la Landesbank Saar (SaarLB), en charge du marché français, Sarrebruck
Comparisons of the performance of German and French industry often draw attention to regional banks. The hausbanken in the service of the mittelstand are said to have a role that, different from the one played by comparable organizations in other European lands, creates the conditions for steadier growth in firms. What does the idea of a regional bank denote in Germany? After answering this question, an overview of the German banking industry is presented; and the nature of relations between the heads of firms and their partners in regional banks is brought under discussion. In conclusion, the SaarLB is briefly presented along with its understanding of its role as a regional bank.
By Rolf LINKOHR
Physicien, ancien membre (SPD) du Parlement européen, ancien président du Center for European Energy Strategy
Shortly after the catastrophe at Fukushima, the German chancellor, Angela Merkel, announced a new course for the country’s energy policy: nuclear power is to be fully abandoned by 2022 owing to a massive recourse to renewable sources of energy. The proclaimed goal is for renewable energy to make up 35% of the country’s energy mix by 2035 and even 80% by 2050. This “energy transition”, though benefitting from a consensus, has run up against several difficulties: an unadapted electric power grid, the excessively high cost of investments and exorbitant electricity rates for consumers… Till now, this energy policy’s basic principles have not come under question, but questions are arising about the pace and cost of this transformation.
By Christoph MINHOFF
Directeur général de l’Association fédérale de l’industrie agroalimentaire allemande (Bundesvereinigung der Deutschen Ernährungsindustrie e.V.BVE)
Food is a necessity for everyone everywhere. As the third largest exporter and importer of food products worldwide, Germany is a major player on this global market. Thanks to its industry for processing quality foodstuffs efficiently while complying with the principles of sustainable development, German agribusiness is highly implicated in an international division of labor. As a solid, innovative partner in a globalized food industry, it reacts, day after day, to: changes in supply and demand, the growing number of players on this market and the increasing integration of international chains for creating added value.
By Gerald LANG
Professeur à KEDGE Business School, chercheur associé à l’École Polytechnique
Said to be the German economy’s backbone, the mittelstand refers to a heterogeneous set of small and medium-sized companies, big family concerns and “hidden champions” – a phrase referring to the middle-tier companies that, though not very well-known by the public, hold a major position in highly specialized sectors on the world market. The factors underlying the mittelstand are explained in relation to three dimensions: the firm itself (its strategy, operations and management); its relations with its “territory” and, more broadly, with society; and the fiscal, financial and political setting of the firm’s activities.
