Germany - the World's Most Experienced Market Economies

Germany as an economic hub
Germany is one of the most highly developed industrial nations in the world and, after the USA and Japan has the world’s third largest national economy. With a population of 82.3 million Germany is also the largest and most important market in the European Union (EU). In 2007, Germany’s gross domestic product (GDP) totaled EUR 2.42 trillion, which translates into per-capita GDP of EUR 29,455. With an Export volume of EUR 969 billion or one third of GDP in 2007, Germany is the biggest exporter of goods worldwide, and as such is considered to be the “export world champion”, more of a global player than almost any other country and more strongly linked to the global economy than many other countries.

Most recently, the German economy has seen a robust upturn, growing 2.5 percent in 2007. The increase in corporate investments was especially pronounced at 8.4 percent. The economic growth, stimulated by factors both inside and outside Germany, sparked a reduction in the number of registered unemployed. Economic policy has improved the overall conditions and companies have sharpened their competitive edge. Thus, ancillary wage costs have been reduced, the labor market made more flexible and red tape slashed.

An attractive location for foreign investments
Germany is one of the most attractive countries world-wide for International investors. On an international country comparison, Germany does especially well as regards R&D, skill levels and logistics. Moreover, it enjoys a central geographical position, offers strong infrastructure, legal certainty, and the right workforce. The labor force’s high level of qualifications is seen as an important plus point. Around 80 percent of employees have undergone formal training and only 20 percent hold the degree from a higher education institutes or university. The “dual system” for vocational training provides the bedrock here, combining on-the-job and college training, a policy which results in the well-known high standard of education.

Technology leader in many sectors
Germany is one of the leading nations regarding numerous technologies of the future that have exceptional growth rates. These include bio-technology, nano-technology, IT and the numerous high-tech divisions in individual sectors (aviation and aerospace, electrical engineering, logistics). Companies specializing in environmental technology (wind energy, photovoltaic power and biomass generation) have emerged as front runners. Today, Information and communications technology follows car-making and electronics engineering as the third largest economy’s sector. As per to genetic engineering, Germany is second to the United States worldwide and already has cutting edge in numerous fields of nanotechnology.

The key industrial sectors
The key industrial sectors are car-making, electronics, mechanical engineering and chemicals. As is the case in all western industrial nations, for several years now German industry has been in the midst of structural transformation. Some traditional industries (steel, textiles) have in partly shrunk considerably in recent years, with target markets now elsewhere and strong pressure from lowwage countries, or, as in the case of the pharmaceuticals industry, through M&As have come under foreign ownership.

Successful: Germany in the global economy
Given its high level of exports, Germany is interested in open markets. The most important trading partners are France, the USA and Great Britain. In 2006, goods and services worth EUR 85 billion were exported to France, EUR 78 billion to the USA and EUR 65 billion to Great Britain. In addition to trade with the original European Union member states, since the EU’s expansion eastwards (2004 and 2007) there has been a pronounced increase in trade with the east European EU member states. In total, a good ten percent of all exports go to these countries. The importance of trade and economic relations with emerging nations in Asia such as China and India is growing continually.

Economic system: Performance and social balance
Germany is a Social market economy. This is other strong reason why Germany enjoys a high degree of social harmony, something reflected in the fact that labor disputes are so rare here. On average between 1996 and 2005 the work force went on strike for on just 2.4 days per 1,000 employees and thus less than even Switzerland, which saw 3.1 days of strikes. The social partnership of trade unions and employer associations is enshrined in the institutionalized settlement of conflicts as outlined in the collective labor law. The Basic Law guarantees the social partners independence in negotiating wages, and they accordingly have the right themselves to select the working conditions.

All the latest information about Germany economy is available at German Information Centre. So if you are interested in knowing about Germany economy please visit at German Information Centre.