Why is Germany so Good at Manufacturing? (2024)

FAQs

Why is Germany so Good at Manufacturing? ›

Over 22% of Germans work in the manufacturing sector, and the government also has a very successful system in place that keeps wages high (to attract talented individuals) and steady (to keep them.) Germany's focus on testing, innovation, and quality gave rise to its world-renowned machining industry decades ago.

The central growth engine for industrialization in Germany was railroad construction. The demand generated by the railroad boosted developments in the three closely interrelated key industries: mining, metal production and mechanical engineering.

Germany's reputation as a production powerhouse precedes it. A highly skilled workforce, stable labor costs and advanced industrial processes make it the preferred European site for foreign direct investments.

Germany's intense research and development culture supports the development of new technologies and products. The country's universities and research institutions are among the best in the world, and they collaborate closely with industry to develop new technologies.

German economic policy promotes a broad and competitive industrial environment with a strong focus on innovative future technologies. No wonder that German products are global export hits! Additionally, Germany is well integrated into the global economy.

Over 22% of Germans work in the manufacturing sector, and the government also has a very successful system in place that keeps wages high (to attract talented individuals) and steady (to keep them.) Germany's focus on testing, innovation, and quality gave rise to its world-renowned machining industry decades ago.

In particular, the export of motor vehicles and parts as well as chemical products make Germany the third-largest exporting nation in the world. The service sector contributes the largest share to the country's GDP, accounting for 70%.

What are the largest sectors in Germany? Four sectors dominate German industry: the automotive, mechanical engineering, chemical and electrical industry. Global players are Volkswagen, Daimler, BMW (all automotive), BASF, the world's largest chemical company with around 118,000 employees, and Siemens (electrical).

As a result, Germans tend to produce more while working fewer hours than their international counterparts. According to the OECD, Germans work roughly 20 percent fewer hours than American workers. Annual leave of at least 20-25 days (excluding public holidays) is a given in your average German company.

Whereas an American would say, “It would be great if you could get this to me by 3pm,” a German would say, “I need this by 3pm”. When a German is at work, they are focused and diligent, which in turn leads to higher productivity in a shorter period of time.

Why is Germany so advanced in engineering? ›

Germany has a highly skilled workforce with a great focus on engineering and technical skills. The country has a well-established vocational education system which emphasises practical training and hands-on experience. As a result, German workers are highly skilled and sought after by companies in the tech industry.

List of Most Technologically Advanced Countries. According to the list of the top 10 most technologically advanced countries, Japan is in first place, followed by South Korea and the United States in Second and third place.

Science and technology in Germany has a long and illustrious history, and research and development efforts form an integral part of the country's economy. Germany has been the home of some of the most prominent researchers in various scientific disciplines, notably physics, mathematics, chemistry and engineering.

German work ethics mean employees always turn up on time and do a full day's work, they are in turn rewarded with fair pay and good working conditions. Everyone in Germany wants every task, big or small, to be completed to its best, on time, and with high satisfaction for the end consumer.

Confronted by a toxic co*cktail of high energy costs, worker shortages and reams of red tape, many of Germany's biggest companies — from giants like Volkswagen and Siemens to a host of lesser-known, smaller ones — are experiencing a rude awakening and scrambling for greener pastures in North America and Asia.

The driving force behind Germany's economic progress is the thriving culture of innovation in German businesses. In order to secure and boost this success, Germany invests over 3% of GDP in research and development. This investment is worth over 100 billion euros a year, with over two-thirds going to businesses.

The Marshall Plan made it possible for West Germany to return quickly to its traditional pattern of industrial production with a strong export sector. Without the plan, agriculture would have played a larger role in the recovery period, which itself would have been longer.

Particularly hard hit are its mighty chemical and heavy industry sectors, which are now in rapid decline. One of the main drivers is policies that have made energy costs skyrocket, and there Germany serves as a canary in the coal mine for other leading industrial nations.

Germany Germany began industrializing fairly late, in part because it consisted of a number of independent states for most of the 1800s. In 1834, however, many of those states joined in creating a free-trade zone. Germany soon established itself as a leader in heavy industry, especially metalwork.