Transcript

Presenter:
Quentin Peel, for several years was the Financial Times chief correspondent in Berlin. What can British small and medium-sized businesses learn really from the German experience?
Quentin Peel:
That it's actually rather complicated, that it isn't something that you could just get a nice blueprint and say we'll copy it, you know, it's to do with apprentices, it's to do with your banks, it's to do with being export-oriented and, even if you've only got sixty people, ten of them are out there trying to sell to China.
Presenter:
So is it so different and are there so many different factors that trying to import it piecemeal, trying to import elements of that is pointless?
Quentin Peel:
I don't think it's pointless, no, because there are a lot of good lessons to be learnt but, the trouble is, we've lost a hell of a lot of what we once had. I mean we used to train a lot of apprentices in this country too, but back in the ’80s Margaret Thatcher deregulated the whole sector and it's never really recovered. I think one of the reasons why it works in Germany is that these small companies trust the system so something like 85 per cent of all German apprentices are trained in small companies, and most of them work the rest of their lives in the same company. It's a sort of, you know, I look after you and you look after me system where people don't turn over their jobs every five years.
Presenter:
What about the idea that so many of the companies are family-based and can go back generations, I mean there's some of that here but is it much more prevalent there?
Quentin Peel
Yes, I think it is. They've survived. There are new ones, too, I mean I was looking, East Germany is a big problem because all the family companies were destroyed by communism so one of the big challenges they face is can they recreate this now in East Germany? I went to a company there in former Karl Marx Stadt, founded by three chemical engineers. They've now, twenty years later, they've got a thousand people and 50 per cent of the world market in the machines that coat solar panels, and that's the sort of thing they're so good at. They make the machines that do things and people want to buy them.
Presenter:
What's different about the banking system in this context?
Quentin Peel
Well, very localised. You've got all these Sparkassen, savings banks, very local level, only one town at a time, they know their customers, and it's a long-term relationship. The customers save with them, and they borrow from them and they don't get it called in in short notice so, again, it's the long-term planning that's involved. And you also get, these are very provincial companies, it's not as if they're all rushing to the big cities. You've got these mittelstand companies all over Germany in places we've never heard of.
Presenter:
What about, we've talked about banking, we've talked about apprenticeships, what about the university system and the sort of degrees people take?
Quentin Peel
Well, I mean what worries me about Britain is that we've actually probably got too many people going to universities, doing superficial degrees that don't really qualify them to do jobs.
Presenter:
So what are they doing in Germany?
Quentin Peel
Sixty per cent of German school-leavers do apprenticeships and very practical work. I mean I've got lots of kids coming out of school here in this country at the moment and they face a situation where far from doing apprenticeships, they're expected to be interns, paid absolutely no money, in order to get a foothold in the jobs market, whereas in Germany they'd have gone and become apprentices and have a much more formalised system.
Presenter:
Is Britain good at the sort of long-term planning they seem to be good at in Germany?
Quentin Peel
No, it's not good at the long-term planning, it's much more short term. Again, the German companies, and I think the figure's something like 7 per cent go to venture capital for their money. Now venture capital on the whole is looking for quite a quick return, or the banks are looking for a quick return. The German system isn't. Far more of these companies are family equity-financed. They just plough the profits back in because you're looking after, you know, little Johannes, your grandson, who actually you want the company still to go for. It's not perfect because, you know, the third generation often blows it but, having said that, it's amazing how many companies do survive.