Germany is a powerhouse of medium-sized companies supplying precision engineering to a bunch of other industries. Those companies are mostly invisible to the consumer market but provide the machines which make machines, the German M&E (machinery and equipment) sector is massive, just not as flashy as tech unicorns creating yet-another ad-filled consumer product...
Look at southern Germany on Google Maps Satellite View. It's all small towns with immense commercial/production area around it. It's not some row of Motels/McDonalds/Walmart like in many areas of the US, but tons of specialised companies. Not many unicorns, but tons of innovative, profitable enterprises.
>Germany is a powerhouse of medium-sized companies supplying precision engineering to a bunch of other industries.
Sure, but looking at valuation of the likes of Apple versus German "hidden champions", the big money is in products targeting the general consumer and not niche machinery widgets. This is also reflected in things like work culture, treatment of workers and pay.
This missing out on the wave of consumer tech and software, and sticking to pushing dying tech like diesel engines all the way till the 2010's, is probably one of the reason the purchasing power of the average German has stagnated since the 90's when it peaked.
Source: have worked at a couple of Germany's hidden champions making some high end machinery widgets and wouldn't do it again unless I was facing homelessness. US companies for me all the way baby (operating on EU soil).
> Sure, but looking at valuation of the likes of Apple versus German "hidden champions", the big money is in products targeting the general consumer and not niche machinery widgets.
This isn't a particularly good comparison. Comparing the largest B2C company in the world to some SMB isn't particularly fitting. When comparing "valuations" it is also important to consider the fact that some of Germany's biggest companies are entirely privately owned and not exchange listed - and also popular in the US to an extent at least (Lidl, Bosch).
> is probably one of the reason the purchasing power of the average German has stagnated since the 90's when it peaked.
This is a pretty widespread trend and just as prevalent in the US. Salary increases desperately lacking behind the countries' productivity. Some interesting reads [1] [2]
> Source: have worked at a couple of Germany's hidden champions making some high end machinery widgets and wouldn't do it again unless I was facing homelessness. US companies for me all the way baby (operating on EU soil).
That's a pretty personal and individul experience which comes down to personal preference. Certainly, both vastly different ways of working have their benefits and drawbacks. Having a few colleagues who switched from US based companies to a somewhat large German hidden champion, they seem to be pretty happy here for the most part. I'm under the impression that the focus on US companies is especially prevalent in software related jobs, which is not surprising given the $$$ and the interesting technical challenges (at least for FAANGish companies). I don't think such strong preference exists for other industries to be honest.
If they're large, then they're not really hidden anymore. Hidden champions are usually those sub-200 employee companies usually located in the county side. SAP, Porsche or Zeiss are not hidden champions.
I don't work for SAP, Porsche or Zeiss. I work for a company that is rather large but rather unknown outside the geographic region it operates locations and outside the industry it operates in, thus it perfectly fits the definition of a hidden champion, but not of a SMB (Mittelstand).
Whenever I tell someone where I work, there is a 80% chance they've never heard of the company, despite there being a high chance they use one or multiple of our products.
Amusingly I've found the experience of working at a German company in the US to be a huge upgrade. Maybe the real secret is just a foreign company to temper the culture of your own country's.
I would rather have a smaller GDP backed by real underlying industrial capacity rather than frothy valuations on photo sharing apps and exotic financial instruments.
We're not talking about GDP here. The local purchasing power of the average German worker has plummeted since the 90's, especially when you factor in housing costs.
GPD is relatively irelevant to the welfare average person as the GDP is a number that can be artificially inflated by a number of factors respectful of the average worker. Higher GDP doesn't automatically translate to higher wages and better standard of living for everyone.
You can be a tax heaven and if FAANG and big-tech corps simply use your country as a base station to funnel the sales and profits of an entire continent/economic area becasue they pay no taxes there, then your GDP will be insane but that might not mean much to your average worker who isn't getting a piece of that pie.
Germany is Europe's richest country, but that doesn't make the Germans as individuals automatically the wealthiest citizens in Europe. Think about hat for a second. In fact, when it comes to wealth, the avenge Germans net worth is significantly lower than most wealthy EU states, sometimes even on par with those form former Eastern block EU states.
Germans lag everyone in terms of home ownership, we are a nation of people renting appartments. Which explains the gap, the same way it did decades ago, the first time I remember people being confused by that statistic...
