Why Germany is the Export-Weltmeister?
Germany is called the 'Export-weltmeister' which is translated as the world champion in exporting. And it does make a lot of sense. Germany is, after all, one of the few developed nations that enjoys a massive trade surplus.
Between 2000 and 2013, Germany’s exports increased by a massive 154 percent, handily beating competitors such as the UK, where exports grew by 98 percent and France where they grew by just 72 percent. Not many remember that back in 2000, Germany was referred to as the “Sick man of Europe”.
Today, Germany is without doubt the powerhouse of Europe, by far the most significant European nation. In fact, it is Germany that has kept the Euro afloat when much of Europe has fallen into a crisis – Spain Portugal and in particular, Greece.
So what’s the secret of Germany’s incredible success as an exporter? Why is Germany the Export Superpower of the World? And what can the rest of the world learn from Germany? Let’s find out!
The Power of the Euro
Paradoxically, it is the weakness of the Euro that powers Germany. Why is that? Since the Euro has been considerably weakened because of the sluggish economic performance of countries in southern Europe, German exports are cheaper than they would have been, had Germany had a currency of its own, such as the old Deutschmark. So, Germany runs a huge trade surplus at the expense of the rest of Europe. Clever!
Low Levels of Debt
Germans hate taking debt. Perhaps there are historical reasons for this. Following the end of the World War 1, Germany was saddled by an insurmountable national debt, which was one of the principle reasons that led to the rise of Adolf Hitler and the Nazi rule.
As one German expert says, "In German, borrowing is 'schulden', [the same word for] guilt. There is an attitude that if you have to borrow, there is something wrong with you." That’s why Germans, as a people are averse to debt and avoid it when they can. In this, Germany is so unlike the rest of Europe, where debt is a part of life. No wonder then that Germany is in such a better financial position relative to its neighbors in Europe.
Aggressive Labor reforms
Everybody knows that German workers are the most productive in the developed world. What one may not know is that German workers also work the least hours in the developed world, after France! This should come as a shock to many, but it shouldn’t. German workers do more work in less time.
There are no labor problems in Germany as the unions and corporations speak the same language. The labor market in Germany is stable and flexible and unaffected by global economic downturns. Germany has one of the highest employment figures in the world. German workers are loyal to employers and in return, employers acknowledge and reward the efforts of the workers at every opportunity. If there is one country where capitalism can be said to have a soul, it is in Germany.
An Education System that Works
The great thing about German education is the stress laid on vocational training. As an education expert based in Germany Mr. Woergoetter says, "Half of all youngsters in upper secondary school are in vocational training, and half of these are in apprenticeships."
Students in Germany spend more time on vocational training than in any other country, usually spending 3 to 4 years on on-the-job training and when they come out of it, they are almost guaranteed a job. There is no stigma whatsoever attached to vocational training or technical colleges in Germany, unlike in many countries such as India or the UK.
As Mr Woergoetter says, technical jobs in Germany are “not considered a dead end. In some countries, company management come from those who attended business school, but in Germany, if you're ambitious and talented, you can make it to the top of even the very biggest companies."
The German education system creates a highly skilled workforce, with superior problem solving skills, capable of handling any situation that may emerge in the workplace. Surely, there is so much that other nations can learn from Germany.