GlobalAutoTV
Click to watch Dr. Juergen Weber -
Click to watch Dr. Juergen Weber -
euro resources


Need an office in Europe or Eastern Europe? Office suites, meeting rooms, virtual offices, network access




free downloads
EUROPE: "Investment in the Czech Republic (2016 Guide)"

EUROPE: "Investment in the Czech Republic (2016 Guide)". 100-page Guide by KPMG Czech Republic.

proceed to download
eJournals





back to index backEUROtalk June,  2017


Key to Germany's Continued Manufacturing Success is Low Profile, Mid-Sized "Hidden Champions"

Amazingly, 48% of Global Mid-Sized Manufacturing Call Germany Home; What are the Key Factors?

In an era in which the US, the UK and other countries are trying to find ways to revitalize their manufacturing industries, German manufacturers keep rolling along.

Germany came in third place in terms of top exporting countries in 2015, the last year for which accurate data is available, with over $1.3 trillion in exports, behind number 1 China ($2.3 trillion) and just below number 2 to the US ($1.5 trillion), despite the fact that the US economy is more than five times the size of Germany's.

It shouldn't be surprising then that manufacturing still represents about a quarter of German GDP, roughly double the share in the US or the UK.

When most think of German manufacturing, thoughts likely first turn to global auto giants such as Volkswagen, Daimler, and BMW. Or giant industrial companies such as Siemens and BASF.

Germany's Industry 4.0 initiative, an initiative from the government and industry there to digitize the factory floor, might also leap to mind.

All these aspects of German manufacturing prowess are well and good. But just as if not as important are more than 1300 mid-size companies that quietly excel at global competition, a group that well-known German businessman and author Hermann Simon calls "Hidden Champions" - a category he has been researching and writing about for more than two decades.

What is a Hidden Champion? Writing recently on the Harvard Business Review web site, Simon says they have three core characteristics:

• Company has to be among the top three in the world in its industry, and first on its continent

• Its revenue must be below €5 billion

• It should be little known to the general public

And by Simon's calculation, German has more than 1300 of these companies, or an astounding 48% of the global total of such firms, even though Germany has only about 1.1% of the world population.

Some in the US and elsewhere in Europe discount the importance of manufacturing strength in the health of the economy these days, but consider these facts: Simon says German Hidden Champions have created 1.5 million new jobs, have grown by 10% per year on average, and register five times as many patents per employee as large corporations.

They are also resilient. Simon says that in his estimate "in the last 25 years no more than 10% of them disappeared or were taken over, a distinctly lower percentage than for large corporations. Nearly all of them survived the great recession of 2008-2009."

What's more, manufacturing allows companies, through exports, to participate in the growth of emerging countries. About 25% of Germany's exports come from these Hidden Champions, according to Simon.

Why are these German manufacturers so successful, decade after decade? Simon cites a number of factors.

Leadership continuity plays a key role, Simon believes. The leaders of the Hidden Champions stay at the helm for an average of 20 years. That compares to an average CEO tenure of only seven years at the world's largest 2,500 companies from 2012-2016, and the median tenure was even shorter, at five and a half years.

Source: SupplyChainDigest - GAI





previous page

go top
search our site


Loading

EUROtalk

Other articles from the same issue (June,  2017).

New EU car emissions tests slammed as 'paper tiger'
play read on

The digitalisation of the UK automotive industry
play read on

Europe: Automobile Industry Pocket Guide 2017 - 2018
play read on

Autos: Europe Demand Falls on Selling Day Shift; Underlying Demand Stable (May 2017)
play read on

Automobile industry reacts to EU mobility package
play read on

Europe (Germany) is a Major Global Factor in AutoTech
play read on

Turkey: Automotive Industry Monthly Report (1st 4 months of 2017)
play read on

France to Corrupt Multinationals: You Can Run, But You Can’t Hide
play read on

The Deloitte Global Chief Procurement Officer Survey 2017
play read on

EY's Attractiveness Survey report (Europe: May 2017)
play read on

The Future is Now at the Port of Rotterdam: 3-D Printing Case Study
play read on

Central and Eastern Europe trapped in low wage spiral
play read on

Why should European industry embrace the rise of IoT?
play read on

UK, European suppliers consider cutting ties due to Brexit
play read on

Boardrooom Brexit
play read on

Brexit opens Pandora’s box of legal issues for international companies
play read on

Brexit: the supply chain perspective
play read on

Key to Germany's Continued Manufacturing Success is Low Profile, Mid-Sized "Hidden Champions"
play read on

Netherlands to redefine scope of dividend withholding tax act
play read on

Economic Snapshot for Central & Eastern Europe
play read on

Poland: A new amount of relief for R&D works from 1 January 2017
play read on

German Tax Monthly June 2017
play read on

The largest European research initiative in the field of Industry 4.0
play read on

Top 10 EMS Providers in Europe – 2016
play read on

Consumer confidence improves
play read on

Overview of European supply chain events 2017
play read on

What the world can learn from Switzerland
play read on

Doing business in Russia (2017 Guide)
play read on

Europe's manufacturing growth hits 6-year high
play read on

UK economic outlook update
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120