Transcript

Presenter
Vorsprung durch Technik, you know what I mean by that, and the British Government wants businesses here to get some. It's invited German middle-sized businesses, mittelstand, to meet their UK counterparts. Why are these German firms so successful? Our reporter Bob Walker went to the meeting of European Minds in Staffordshire.
Bob Walker
This conference is taking place at the headquarters of JCB, a company which continues to expand and take on more workers, but today's delegates are trying to learn lessons from Germany. There are more than three-and-a-half million mittelstand companies in Germany, each employing fewer than 500 people, and they account for around a half of German national income. I am joined by one of today's speakers, Joachim Secker, who is from GE Capital, a lending company. What would you say is the secret of the success of mittelstand in Germany?
Joachim Secker
The ownership structure, which is family-based, usually company goes from generation to generation. A lot of these companies are champions in niches, which they decided to go to. They take a lot of care for two things. One is R&D, where they invest on average about 5% of their revenues, and the other one is education, the apprenticeship model, which the mittelstand supplies four out of five in Germany.
Bob Walker
And why is the system of family-owned companies so important?
Joachim Secker
It gives the whole thing a long-term spin. There is no shareholder-driven quarter result focus. You can see in a lot of companies that they really plan over decades and that clearly shows that this is a long-term oriented thinking.
Bob Walker
And the differences in the banking system here, in Germany?
Joachim Secker
The mittelstand companies really profit from the three pillar system, as we call it. Eighty per cent of the lending market for medium-sized enterprises is in the hand of cooperative banks and government-owned saving banks, only 20 per cent by private banks, and these two institution groups are there to support mittelstand companies.
Bob Walker
And the system of apprenticeships, I just heard you, during your speech, talk about how respected apprentices are.
Joachim Secker
Oh, absolutely, it is certainly no different if you sit down with people in Germany around a desk and you have people telling that they have an education based on an apprenticeship. They are as socially high respected as somebody with a college study would be.
Bob Walker
And you say ‘treat your employees well’?
Joachim Secker
Yes, that is certainly something that German companies have in mind, you know. If you look at the cooperation between the unions and the employers, that is very cooperative, it is not based on confrontation, and also things like holidays, subsidies in terms of benefits which employees can get, that is things that medium-sized companies in Germany hold very high, and that works to the advantage, and I see quite some differences there compared to other European countries.
Bob Walker
And finally, if there were one lesson for companies here in the UK, what would it be, a one tip?
Joachim Secker
Be patient, be there for the long-term, but don't stop investing into it.