Would you be able to name five to 10 German brands or companies? Most probably, you know or would have at least heard of Adidas, Allianz, BMW, Volkswagen (VW), SAP, and Siemens. The Nivea logo on the little blue tin in your cosmetics cabinet represents a world-famous body-care brand owned by Hamburg-based Beiersdorf. Audi as well as Porsche are part the Volkswagen Group. According to Interbrand, a global brand consulting agency, in 2022, Mercedes-Benz (The Daimler Group) ranked the highest when it came to the most valuable German brands (eighth worldwide).
The aforementioned companies are all (currently) listed on the German stock index DAX (Deutscher Aktienindex), which consists of the 40 major German companies trading on the Frankfurt Stock Exchange. However, the backbone of the German economy is the so-called Mittelstand.
There is not one definition of Mittelstand
Mittelstand, in German-speaking countries (Germany, Austria, and parts of Switzerland), commonly refers to small- and medium-sized enterprises (SMEs) with annual revenues of up to 50 million euros and a maximum of 499 employees (Institut für Mittelstandsforschung Bonn). Depending on its specific definition, “Mittelstand” can range all the way from small craft workshops to hidden champions worth up to a billion euros.
According to the online portal Die Deutsche Wirtschaft, the Mittelstand not only accounts for the majority of businesses in Germany (more than three million), but also provides some 60 percent of all jobs and over 80 percent of all apprenticeships. A study conducted by the portal has analyzed Germany’s most important medium-sized companies:
The results provide an interesting insight into the structure, distribution and relevance of the most important medium-sized companies in Germany. In this respect, turnover at the top 10,000 firms ranges from approximately 25 million to the ranking limit of 1 billion euros. The average turnover is 156 million euros. All in all, the top 10,000 companies account for roughly 1.05 billion euros in turnover and provide approximately 5.3 million jobs.
Where to find the Mittelstand?
Sometimes, maybe because of how they experience centralism or the infrastructure in their home countries, foreigners imagine that businesses would only flourish within major cities or their exurbs. That is not the case with Germany, and the Mittelstand is very often to be found in smaller towns or even “rural” areas. So, do not underestimate a company, “only” because it is located in small places you’ve never heard of called Dülmen, Glatten, Schwanau, or Kreuztal. When ranked according to federal state, the largest number of the medium-sized enterprises (as described above) is currently based in North Rhine-Westphalia (2,321), followed by Bavaria (1,968) and Baden-Wuerttemberg (1,818).
And what are the top industries to be found? According to Deutsche Wirtschaft most of the top companies are from the mechanical engineering, followed by automotive trade, automotive suppliers and building and construction. According to their research, 51 percent are to be classified as industry (in 2016 still 56), 33 percent as service providers (2016: 27), and 16 percent as retailers. If you are interested in the involvement of the German Mittelstand in foreign trade activities, please refer to the study The German Mittelstand in the Age of Globalisation (2016) compiled by Dr. René Söllner and published by the Federal Statistical Office of Germany (Destatis).
To find SMEs in certain regions or dedicated industries, you can peruse the platform kompetenznetz mittelstand. Here, you can, e.g., browse German Mittelstand companies by federal state (e.g. Bavaria) or industries such as Engineering, Textile, or Tourism.
Working for a German SME
If you consider applying for a job with a German Mittelstand company, you might be interested in what Manoj Barve, India Head of the German Federal Association of SMEs (BVMW – Bundesverband mittelständische Wirtschaft e.V.), advises in his article Connecting the Mittelstand (German SMEs) and Indian professionals.
According to Manoj one should consider that working and living in a smaller town is not necessarily bad for living: “Often, it comes with benefits such as lower cost of living, less commute and more opportunities to connect to Germans. If the small town-lifestyle isn’t for you: Cities are well-connected by public transport or highways.” Looking at career opportunities, he says: “Even if the German Mittelstand is still in the process of opening up to international management talent, leadership opportunities are available already today. Many SMEs with global operations provide the possibility of getting international positions such as Country Manager at an early career stage.”
List of potential employers in the German Mittelstand
If you like to have a closer look at career opportunities in the smaller SMEs, you can, e.g., check out the platform Great Place to Work® and browse the list Beste Arbeitgeber im kleinen Mittelstand 2022 to find potential employers like Allgäu Batterie GmbH & Co. KG in Haldenwang (41 people), secuvera GmbH in Gäufelden (28), or Weissman & Cie. GmbH & Co. KG in Nuremberg (20). What you can also do, is check out so-called Student-Days or Career-Days during trade shows. For example, embedded world 2023 is organizing the Student Day — next generation @ew23, where you can learn about career-opportunities in the electronics industry and meet companies like the display expert DATA MODUL (Munich), dSPACE, a world leading provider of tools for developing electronic control units from Paderborn, or Rutronik, a big name in the electronics distribution market located in the small town of Ispringen.
As always, if you need help with identifying specific accounts or would like to get connected with potential buyers, I am happy to help!