Germany’s SMEs Drive Economic Growth
Germany’s small and medium-sized enterprises (SMEs), aka the Mittelstand companies, are leaders in all financial performance indicators reports Austrian news agency APA, citing a study by insurance provider Hiscox.
As many as 59% of the SMEs in Germany increased their sales in 2013. The share of those who managed to boost their profit was 57%, according to the survey, based on interviews with 3,500 companies in Germany, UK, the US, the Netherlands, France and Spain, employing less than 50 people.
Additionally, 70% of the Mittelstand companies were able to attract new customers, while 23% hired more employees. Order intake was on the rise for 58%.
In terms of self-perception and business optimism, 53% of German SMEs reported they were positive about the development of the economy, reflecting a higher proportion of optimists than in the other countries surveyed.
German entrepreneurs were also found to work the most, devoting 42.3 working hours per week on average.
The leading position of the Mittelstand is linked to their conservative business strategy, the study said. With a share of 22%, German and US SMEs shared bottom ranking in terms of new products and services. This appears unlikely to change over the short term, with German SMEs also representing the smallest portion of those planning to launch new products or services in the coming year.
The strong performance has a downside, however. While 44% of the companies said they are aware of the risks they are exposed to, as many as 95% of the German SMEs had no insurance against cyber crime, while 28% had no backup systems.
Robert Dietrich, chief representative for Hiscox Germany, commented that their success should not make German SMEs complacent and they should realise that good performance depends on adequate risk management.