Germany’s middle-class manufacturing sector remains robust, thanks to the Mittelstand – a network of small and medium-sized enterprises (SMEs) that specialise in niche markets. Unlike the US, where manufacturing jobs have been largely replaced by low-wage service jobs, Germany’s Mittelstand focuses on high-value, precision manufacturing, often for export. Germany’s vocational education system is a key factor in this success, ensuring a steady supply of highly skilled workers.
Furthermore, German manufacturing firms are often family-owned, with a long-term perspective and a commitment to their local communities. This contrasts with the short-term, profit-driven approach of many American corporations. German firms also benefit from strong relationships with banks, which provide patient capital for investment and growth.
However, challenges do lie ahead. The Mittelstand’s focus on specialised, high-value products makes it vulnerable to economic downturns. The ageing population could also lead to a shortage of skilled workers. Despite these issues, Germany’s middle-class manufacturing sector remains a model of resilience and innovation.
Go to source article: https://hbr.org/2017/05/why-germany-still-has-so-many-middle-class-manufacturing-jobs