A layer of small- and medium-sized private exporters forms the backbone of Europe's largest economy. Typically family-owned, focused specialists, many "Mittelstand'' members, such as Sixt, have outgrown their roots but retain the image of belonging to the "middle.''
Würth, a typical example for the German Mittelstand.
In Germany, a big European social democracy, "big business'' can be a loaded term. The more sought-after corporate moniker is being in the "middle,'' or more specifically, one of the nation's collection of "Mittlestand'' firms.
In fact, the power of membership in this family-owned layer of quiet but profitable exporters is so strong that in Germany, even businesses normally considered "big'' in any other countries are still "middling'' in Germany, usually by mutal request.
Unsurprisingly, what constitutes the Mittelstand is a matter of debate in Germany. The concept is applied liberally to group together mom-and-pop businesses with huge, mulinational firms, often global market leaders in a special product or unique process. Firms with thousands of employees and millions of euros in revenue can stay under the Mittelstand umbrella.
The marketing cachet of being in the "Mittelstand'' is so strong, that Germany makes it easy to be big but middling.
The official definition of small- and mid-sized enterprises used by the European Commission includes companies with less than 250 employees and sales of less than €50 million a year.
But in Germany, the middle is bigger.
The German Institute for Mittelstand Research, or IfM, defines the term to apply to firms with of up to 500 employees, because “Mittelstand in Germany has always been bigger than SMEs in other countries,” said Eva May-Strobl, a senior researcher at the IfM in Bonn.
Under the IfM's definition, 95 percent of German firms belong to the Mittelstand. Industry associations even speak of up to 99 percent, or 3.7 million businesses. Almost 60 percent of all employees work at one of these companies, according to the BDI.
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