Newspaper article THE JOURNAL RECORD

West Germany's Unsung Economic Miracle

Newspaper article THE JOURNAL RECORD

West Germany's Unsung Economic Miracle

Article excerpt

What country's workers toil 12 fewer weeks (450 hours) per year than Japan's, yet export 2.5 times more per capita and run an overall positive trade balance that exceeds Japan's? The answer is easy: West Germany. What nation's export base is broader than Japan's and not dependent on a single ``customer'' (as Japan is upon the United States)? Easy again: West Germany. Why does the average bookstore sport a dozen volumes on Japanese management, but none on West German management? The answer to that is not easy.

While I can't explain the eerie silence surrounding West German management, I am examining the economic miracle itself. The results of several visits, seminars and deep digging for written sources can be summarized by eight factors:

- Training. The Germans are training fanatics. Some cite Germany's 150-year-old apprenticeship program (with 500-year-old roots) as its chief competitive economic advantage. About 1 million young folks join yearly, banker and baker alike. The typical apprentice (Azubi) spends two or so days at work, two or so in an academically sophisticated vocational school. Firms and regions vie to offer the best apprenticeship programs.

- Labor harmony. Consultation, involvement and partnership are watchwords of West German labor relations. In firms of five or more employees, workers can demand a Works Council (an idea started by Bismark a century ago); the council has limited formal authority, but symbolizes a no-baloney commitment to sharing responsibility with workers.

- Quality/constant improvement. The Germans fare poorly in high-profile science prizes, but excel at what one observer calls ``technical flair.'' The German obsession with quality and ease of manufacture has never been of greater importance than in today's world markets.

- Niche markets. The Germans never fully bought into the so-called ``Fordist paradigm'' - traditional U.S./British mass production schemes. From autos to chemicals to textiles, the Germans are relentless creators of smallish, very high-value-added niche markets. For instance, they successfully matched new-found Japanese strength in machine tools (a West German preserve) by moving further up the customization chain; fully two-thirds of the German machine tool industry's output is now ``one-of-a-kind'' products. That's specialization!

- The Mittelstand. Business Week's list of the world's 1,000 biggest firms includes 345 Japanese companies, 353 U.S. - and just 30 West German outfits. The peerless West German economy is not dependent upon its giant firms. The Mittelstand, or mid-sized company, domination of Germany's economy stretches back centuries. …

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