Where Germany's economy still excels

For years, doubts have grown about the international competitiveness of German industry. Take the photovoltaic sector, for example, where Germany had a lead but the real action has long since shifted to East Asia. Similarly, its famed automotive industry is fast losing ground, particularly compared to China. Yet some German giants remain global leaders, including SAP, Europe's largest software provider, Deutsche Telekom, a leader in telecommunications, and DHL Group, the world's top logistics and international express shipping firm. Germany still ranks among the top five largest economies in the world, even as growth forecasts are slashed. It may have fallen behind the United States and China, but it remains 'the best of the rest.' This fact isn't just thanks to a few big names, but rather owes a lot to small and midsize businesses. Over 99% of companies in Germany are small and medium-sized enterprises (SMEs), and 50% of net value added comes from the SME sector. The example of Zeiss, a technology company specialized in optics and optoelectronics, shows that a company doesn't necessarily have to be a global corporation to play a key role in the value supply chain. German midsize firms combine globally unique strengths: a dual education system, high technical expertise, reliability, and adaptability. Their central competitive advantage lies in long-term thinking, responsible action, and close ties to markets and employees. Companies like Herrenknecht AG, which manufactures tunnel-boring machines, highlight advantages such as high innovation, strong industrial expertise, quality, and reliability. Customers are central to their operations, with direct engagement even in challenging situations. Ottobock, a global leader in prosthetics, emphasizes innovation, quality, and adaptability to international markets and regulatory frameworks. While German innovations like MP3 and magnetic levitation trains have been successful, company strategies have often led to capital flowing abroad. Experts like Bastian Pophal and Maximilian Flaig express confidence in the Mittelstand's ability to withstand international competition. However, structural reforms are needed, including investments in infrastructure, competitive energy prices, stable supply chains, and investment security. Without these, the Mittelstand's long-term success on the international market may be at risk.