The German Miracle Keeps Running: How Germany's Hidden Champions Stay Ahead in the Global Economy

Abstract

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International Trade, Entrepreneurship, and Monopolistic Competition: German Hidden Champions and Global Markets

“…population). In Germany, there are near 400,000 internationalized SMEs (Mittelstand) and about 100,000 of them have had FDI-operations (Venohr & Meyer, 2007). Among big EU countries, Germany is dominating (Sinn, 2012) and France and Italy have serious difficulties to understand why German MNCs such as Volkswagen or Daimler are so excellent.…”

“…HCs apply their own models of market leadership in which Schumpeter's innovation/entrepreneurship concept and Chamberlin's/Gutenberg's product differentiation concept are combined as Venohr and Meyer (2007), Simon (2009, and Simon and Jonason (2013) have widely reported. With about 90% success rate, HCs are competing away their main competitors in the various market niches.…”

“…Their values are conservative: hard work, high performance, and high employee loyalty. Because HCs are often locating in small towns, their main deficit might be competition of young talents worldwide (Venohr & Meyer, 2007). The main element of success by German HCs is a strong leadership with ambitious goals among the top three in global markets or to the number one on a own home continent.…”

Wanxiang Innovation Energy Fusion City: Recommendations for Developing an Innovation Cluster

“…They include many Hidden Champions, a term used for SMEs that are highly specialized and have attained global market leadership in their respective niches. Their innovativeness is cited as key to securing the state's economic prosperity and in sustaining its technological leadership across a variety of industrial sectors (Venohr and Meyer, 2007). Figure 2.1 shows the gross regional product for Baden-Württemberg, which has grown steadily since the early 1990s, with a brief decline during the 2009 financial crisis, to over 400 billion euros in 2015.…”

“…Simon (1996a) refers to this phenomenon as one of Hidden Champions, pointing to a large number of small, relatively unknown firms all over Germany that manage to sustain market leadership in their respective, often highly technical and knowledge-intensive market segments. While several other economies across Europe are also reliant on small businesses, a notable feature of Germany's Hidden Champions is that they are innovative and are key contributors to the technology leadership of their regions (Simon, 1996b;Simon, 2009;Venohr and Meyer, 2007;Schlepphorst, Schlömer-Laufen, and Holz, 2016).…”