Mittelstand
Encyclopedia
Mittelstand refers to small and medium-sized enterprises in German-speaking countries, especially in Germany
, Austria
and Switzerland
. Economic and business historians have been increasingly giving Mittelstand companies more and more credit for Germany's economic
growth in the beginning of the 20th century.
of the cities and the lower one the peasants.
Today, the term is used with two meanings. The first meaning refers to small and medium sized enterprises, SME ('kleine und mittlere Unternehmen', KMU), defined by number of employees and turnover.
The second meaning refers to any family run or owned business (which doesn't have to be a SME).
The correct term to describe households with medium or higher income would be 'Mittelschicht' with the English translation middle class
.
However, the German word 'Mittelklasse' refers to medium-sized cars.
segments. They are typically privately owned and based in small rural communities. Many of the successful Mittelstand companies combine a cautious and long-term oriented approach to business with the adoption of modern management practices, like employing outside professional management and the implementation of lean manufacturing practices and total quality management.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
and Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
. Economic and business historians have been increasingly giving Mittelstand companies more and more credit for Germany's economic
Economy of Germany
Germany is the largest national economy in Europe, the fourth-largest by nominal GDP in the world, and fifth by GDP in 2008. Since the age of industrialisation, the country has been a driver, innovator, and beneficiary of an ever more globalised economy...
growth in the beginning of the 20th century.
Definition
The term is not officially defined or self-explanatory. The German word 'Stand' refers to a medieval model of society where the position of an individual was defined either by birth or profession. Basically there was three levels, the upper one being the aristocracy, the middle one being the free bourgeoisieBourgeoisie
In sociology and political science, bourgeoisie describes a range of groups across history. In the Western world, between the late 18th century and the present day, the bourgeoisie is a social class "characterized by their ownership of capital and their related culture." A member of the...
of the cities and the lower one the peasants.
Today, the term is used with two meanings. The first meaning refers to small and medium sized enterprises, SME ('kleine und mittlere Unternehmen', KMU), defined by number of employees and turnover.
The second meaning refers to any family run or owned business (which doesn't have to be a SME).
The correct term to describe households with medium or higher income would be 'Mittelschicht' with the English translation middle class
Middle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
.
However, the German word 'Mittelklasse' refers to medium-sized cars.
In modern Germany
Germany's Mittelstand companies (SME) are a very important part of the country's economy. In 2003, these companies employed 70.2% of all employees in private business, according to the Institut für Mittelstandsforschung. Many Mittelstand companies are export-oriented. They focus on innovative and high value manufactured products and occupy worldwide niche market leadership positions in numerous B2BBusiness-to-business
Business-to-business describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer...
segments. They are typically privately owned and based in small rural communities. Many of the successful Mittelstand companies combine a cautious and long-term oriented approach to business with the adoption of modern management practices, like employing outside professional management and the implementation of lean manufacturing practices and total quality management.