Mittelstand

The term Mittelstand is a broad collective term for the small and medium-sized firms in the economies of Germany and  the German-speaking countries.  The Mittelstand is much studied, admired and discussed, as it is thought to be  a  major factor in Germany’s current economic and technological success, and also because Mittelstand companies are generally quite different in composition, behaviour and strategy from the companies of corresponding size in the Anglosphere economies. Numerically the Mittelstand is typically defined as comprising firms having 50 to 500 employees, though some larger firms may be referred to as Mittelstand firms for qualitative reasons.  Mittelstand firms account for nearly 70% of Germany’s exports and employ the largest number of workers in the German economy.

The qualities seen as typical of successful Mittelstand firms are long-established family ownership and long-term strategies, social responsibility and investment in the workforce and technology, low staff turnover, and often strong regional roots and connections to other companies.  Such firms are often major exporters and market leaders in a niche or technology, and take a long term approach to investment and the development of new products, though there is now uncertainty about how they will deal with the challenges of Industry 4.0, also called the Fourth Industrial Revolution, or 4IR, or in German called Industrie 4.0.

The term Mittelstand may also be applied at times to what in other countries is called the SME or Small and Medium Enterprise sector, often in discussions of  the lesser  presence and significance of such firms in the corporate-dominated and short-term shareholder profit paying economies of the Anglosphere.