In Germany, the Mittelstand represents countless small and medium-sized enterprises (SMEs), usually still owned by the founders, that are a key part of the country's economy. They account for around 27 per cent of total company turnover and employ about 57 per cent of the workforce. In contrast to its sluggish large corporate sector – large German companies are notoriously locked into the national political system via golden shares and the regional banking system, with VW being the most egregious example – the Mittelstand has traditionally had a nimble and research-led approach to dominating niches in key markets.
While many of Germany’s larger companies have suffered badly from high energy costs and disruption to China trade, plus the threat of tariffs in the US, the Mittelstand has responded by moving further up the value chain into ever-harder-to-copy areas.