Figure 1.1 Map of Germany

Overall, I would say that traffic movement in Germany is quite calm, steady, and organized. Germans do not have the habit of taking U-turns in the middle of a crossroad (or only if nobody is looking), and if asked whether they, at a traffic bottleneck, for example, would prefer alternately merging traffic over red lights, I am sure most Germans would rather vote for the latter, considering the technical signals require less coordinating with other drivers, which also means less swearing and lecturing others on road traffic regulations! When it comes to showing emotions, a thumb rule is that Germans sing in the shower and go hog wild in the car; Have you won your license on the lottery! is a comparably lenient common abuse.

If you do not have to go someplace in the countryside, there is no need to rent a car. Take a train, planning enough of a buffer for delays (100 percent on time arrival is a myth), and ask for help at the Deutsche Bahn Service Centers to find the best possible routes and connections. Otherwise, use www.bahn.de or the DB App to plan your journey and buy your ticket. Not every taxi driver would be able or willing to accept credit cards, so enquire in advance and make sure you carry enough euros (EUR, €). Tariffs vary from city to city and, unless fixed prices for very standard routes (from the airport to the city center or fairground, for example) are advertised, you pay by taxi meter.

If your chauffeur is a native German, chances are that the person who, at the end of the journey, will be happy to issue a hand-written receipt for your cash payment (add a small tip, if you like) has a diploma in psychology, theology, or some other social-scientific discipline. Having lost track on their career path while studying German philology, politics, or some other exotic “Blütenfach” (literal: flower subject) for some 14 or 16 semesters (i.e., seven or eight years), your cabbie might have chosen to keep on driving a car to earn a living, rather than trying to fit into the corporate or academic world. With the “Americanization” of the university system, as some would put it, youngsters these days have fewer opportunities to come true in disciplines that have no concrete value. Nowadays, qualification (fitness for purpose) ranks higher than a holistic education, but that is another story.

Talking to your driver might be a good opportunity for you to get an idea about what is going to expect you when you are meeting your business prospects. Firstly, your taxi ride might give you a foretaste of how blunt Germans can be. Although, in Germany, talking about your own political preferences would be considered a taboo topic—now that I think about it, maybe that has changed slightly in recent years—do not be surprised if your driver is happy to share his or her views on the politics of the day in your country.

The driver might also lecture you about how you have chosen a lousy or overpriced hotel; if it is also slightly difficult to reach the place (because of one-way streets or road works) or the length of the journey (i.e., the fare) does not offset the time the driver had to queue up at the airport or station, you are likely to be educated on the inconvenience caused to him or her. I once took a cab to transport an oriental-style coffee table I had just purchased from an inexpensive antique shop; while helping me to unload the table from his trunk (at least!), the driver’s very matter-of-fact comment was: “Hopefully, you haven’t paid any money for this crappy piece of bulk trash.” And, please note that I only remember the episode because he spoilt the excitement I had felt, not because my taste had been questioned by a total stranger!

When it comes to small talk, the weather is always a safe topic. Germans, being used to complaining a lot, would often tell you that it is too hot, too cold, too rainy, too cloudy, too sunny, but I would say that the weather conditions in Germany overall are quite pleasant and easily bearable, if you are dressed accordingly. Abhilash V R, a principal design engineer from South India who experienced the quite exceptional –16 degrees Celsius (3.2 Fahrenheit) when he first came to Germany for a fair in February 2018, would most certainly agree when I say that you had better buy or bring proper shoes and a warm coat for the winter (northern hemisphere: December–March); and do not be surprised to experience up to 30 degrees Celsius (86 Fahrenheit) in the summer. However, air conditioning is not very commonly used and, unless your meeting is taking place in some very modern and well-equipped building, you might quickly feel tempted to undo your tie. In winters, sitting in overheated offices might make you regret the decision to wear a woolen, long-sleeve shirt and boots with your knee length business outfit! So far, we have not experienced monsoons or hurricanes, and blizzards are not exactly common; however, sometimes there are storms and flooding.

Talking about flooding, you might be wondering what the small badge in the front of the taxi is supposed to be; some cars have a silver token attached to the car’s dashboard, close to the steering wheel (which, by the way, is on the left-hand side of the car). The emblem depicts a man with a long walking stick, who is carrying a child on his shoulders; both are surrounded by rough waters. You might already have guessed that the child is Jesus. The man carrying the Christ Child is St. ­Christopher, the patron saint of travelers, as well as car conductors; rafts men; and truck, bus, and taxi drivers. Your driver is very likely to be a Catholic.

However, religion does not play a major role in Germany. ­According to data published by fowid, only 37 percent say that religion and belief are of high or very high importance to them (Frerk 2017). In the cited survey, which was conducted by Infratest dimap in 2017, 63 percent of the interviewees responded that religion played a minor role or no role at all in their lives. Overall, women are often more religious than men, and the people living in the western parts of Germany are more religious than those living in the eastern parts of the country. According to fowid, 36.2 percent of the Germans do not follow any religion, while Roman Catholics account for 28.5 percent of the population and 26.5 percent are Protestants. There are about 4.9 percent ­Muslims and 3.9 percent who belong to other churches or follow other beliefs. The communities that are growing are Muslims (due to the recent influx of immigrants, especially from Syria and Afghanistan), people who follow no religion at all, and those from other beliefs or churches (Forschungsgruppe ­Weltanschauungen in Deutschland und der Welt (fowid) 2017).

As surveys show, there are many things that are, on an average, more important to Germans than religion. Health, family or children, and friendship rank much higher, as do education, work or occupation, and nature (Frerk 2017). When Germans talk about the importance of family, most often, they are referring to (their) nuclear family, typically consisting of themselves, their partner, and one or two children. They would also consider their parents and siblings as close family, maybe along with their grandparents. Aunts, uncles, and cousins often would not really be considered family, and when it comes to great-aunts, co-brothers-in-law, or second cousins, many would not even know the terms! It would also never occur to autochthonous (indigenous) Germans to call their parents’ friends “uncle” and “aunt,” or address the vegetable vendor as “brother” or “sister.” The only person who is not blood-related to me and whom I address as “uncle” is my godfather (Patenonkel), Peter; and I call my late father’s sister’s late husband’s second cousin’s son Amit and his first cousin Arjun “cousins,” but that’s another story, because that is India!

As you can see in Table 1.2 (Federal Statistical Office n.d.), in 2017, about 42 percent of the 41.3 million households in Germany were one-person households; 59 percent of all Germans were either married or living together (Statista GmbH, Hamburg 2018b). Living together without being married is socially accepted, and most couples, when they tie the knot, have already lived together for some time. The current divorce rate is roughly 40 percent, meaning that, for each marriage, there are 0.4 divorces. Or, if I am getting the numbers right, one could also say that two out of five couples get divorced. Many of my friends live in patchwork families, and common questions are whether or not to invite the ex-wife to their daughter’s graduation party, and what weekends the new boyfriend is in charge of taking the kids.

Table 1.2 Key figures on households and families, 2017

Households	41.3 mn
One-person households	41.8%
Families with minor children	8.2 mn
Married couples	69.7%
Lone parents	18.9%
Cohabiting couples	11.4%
Couples	20.8 mn
Married couples	84.4%
Opposite-sex cohabiting couples	15.0%
Same-sex cohabiting couples	0.5%

By the way, it is better not to ask your German business contacts about their marital status or whether they have children. Most ­Germans, at least at an early stage of getting to know each other, would perceive these questions as being far too personal; for an unmarried person or somebody without children, the question might even sound like an insult. If people mention their children by themselves, then it is a very good idea to inquire how the offspring are doing, what their hobbies are, and whether they already know what profession they would like to follow.

(Industry) Clusters and the Relevance of the Mittelstand

Would you be able to name five to 10 German brands or companies? Most probably, you know or would have at least heard of Adidas, ­Allianz, Deutsche Lufthansa, BMW, Volkswagen (VW), SAP, and Siemens. The Nivea logo on the little blue tin in your cosmetics cabinet represents a world-famous body-care brand owned by Hamburg-based Beiersdorf. Audi as well as Porsche belong to the Volkswagen Group. According to Interbrand, a global brand consulting agency, in 2017, Mercedes-Benz (The Daimler Group) ranked the highest when it came to the most valuable German brands (ninth worldwide) (Interbrand n.d.).

The aforementioned companies are all (currently) listed on the ­German stock index DAX (Deutscher Aktienindex), which consists of the 30 major German companies trading on the Frankfurt Stock Exchange. However, the backbone of the German economy is the so-called ­Mittelstand. ­Mittelstand, in German-speaking countries ­(Germany, Austria, and parts of Switzerland), commonly refers to small- and ­medium-sized enterprises (SMEs) with annual revenues of up to 50 million euros and a ­maximum of 499 employees (Institut für Mittelstandsforschung Bonn n.d.). Depending on its specific definition, ­“Mittelstand” can range all the way from small craft workshops to hidden champions worth up to a billion euros.1

According to the online portal Die Deutsche Wirtschaft, the Mittelstand not only accounts for the majority of businesses in Germany (more than three million), but also provides some 60 percent of all jobs and over 80 percent of all apprenticeships. A study conducted by the portal has analyzed Germany’s most important medium-sized companies (Die Deutsche Wirtschaft 2016):

The results provide an interesting insight into the structure, ­distribution and relevance of the most important medium-sized companies in ­Germany. In this respect, turnover at the top 10,000 firms ranges from approximately 25 million to the ranking limit of 1 billion euros. The average turnover is 156 million euros. All in all, the top 10,000 companies account for roughly 1.05 billion euros in turnover and provide approximately 5.3 million jobs.

Die Deutsche Wirtschaft also found that most of the top companies are from the automotive trade, followed by mechanical engineering and construction. According to their research, 56 percent are to be classified as industry, 27 percent as service providers, and 17 percent as retailers (ibid). When ranked according to federal state, the largest number of the medium-sized enterprises (as described above) is currently based in North Rhine-Westphalia (2,300), followed by Bavaria (1,997) and Baden-Wuerttemberg (1,812) (Die Deutsche Wirtschaft 2018).

The portal regularly publishes their ranking of the most important SMEs (Table 1.3); in addition to the turnover and number of employees, they attach weight to research collaborations, partnerships with schools or universities, and association memberships (Die Deutsche Wirtschaft 2016).

Table 1.3 The top 25 of the 10,000 most important medium-sized companies as per Die Deutsche Wirtschaft

Rank	Company name	City or location	Industry	Turnover in mn EUR
1	ifm stiftung & Co KG	Essen	Automation ­engineering	815
2	Maschinenfabrik Reinhausen GmbH	Regensburg	Electrical ­engineering	700
3	Borgers SE & Co. KGaA	Bocholt	Automotive supplier	823
4	C. D. Wälzholz KG	Hagen	Steel processing	850
5	Windmöller & Hölscher Gruppe	Lengerich	Machine ­engineering	785
6	apetito AG	Rheine	Foodstuff	829
7	WIKA Alexander Wiegand SE & Co. KG	Klingenberg	Control technology	834
8	Kathrein-Gruppe	Rosenheim	Communication technology	794
9	Schnellecke Group AG & Co. KG	Wolfsburg	Automobile logistics	936
10	Rosenberger ­Hochfrequenztechnik GmbH & Co KG	Fridolfing	Electrical ­engineering	940
11	MEWA Textil-­Service AG & Co. ­Management OHG	Wiesbaden	Textile or textile services	638
12	Dehner Holding GmbH & Co. KG	Rain am Lech	Garden market	781
13	Unternehmensgruppe Lürssen	Bremen	Dockyards	985
14	dennree Gruppe	Töpen	Wholesale organic food	920
15	Beumer Group GmbH & Co. KG	Beckum	Machinery and plant engineering	750
16	Gegenbauer Holding SE & Co. KG	Berlin	Facility ­management	685
17	Lindner Group KG	Arnstorf	Building or building materials	950
18	Schön Klinik SE	Prien a. Chiemsee	Health	797
19	WAGO ­Kontakttechnik GmbH & Co. KG	Minden	Connection technologies and automation	766
20	Max Weishaupt GmbH	Schwendi	Building ­technology	560
21	Handtmann Unternehmensgruppe	Biberach	Machine ­engineering	835
22	Harting AG & Co. KG	Espelkamp	Industrial ­connectors	586
23	Bitburger Braugruppe GmbH	Bitburg	Breweries	785
24	WITTE Automotive	Velbert	Automotive supplier	595
25	HiPP Gruppe	Pfaffenhofen	Foodstuff	950

Looking at where the below top 25 companies are located, you might notice that there is only one big city listed—Berlin. Maybe you have heard of Bremen (about 550,000 inhabitants) or Wiesbaden (275,000). Fridolfing, for example, where Rosenberger Hochfrequenztechnik is located, is home to about 4,200 people; Klingenberg am Main, where we find WIKA, is not much bigger. I am telling you this because, in my experience and due to a common misconception, some people conduct their Internet search for potential business partners or buyers only by city: Berlin, Hamburg, Munich, and so on. Sometimes, maybe because of how they experience centralism or the infrastructure in their home countries, foreigners imagine that businesses would only flourish within major cities or their exurbs. That is not the case with Germany!

However, it is very important to grasp the regional differences when starting to do business or working on business development in Germany. A business consultant in my network would often encourage companies to focus on just one region when entering the German market, ­depending on the product in question, the industrial competence of the region itself, and other factors. There are regions where specific ­competences are aggregated and certain skills or industries have been flourishing for centuries, whereas there are (newer) cluster networks that are often funded by the federal government and federal states to promote certain technologies.

In his book, Hidden Champions – Aufbruch nach Globalia, management consultant and Emeritus Professor of Economics Hermann Simon distinguishes three kinds of industry clusters. Traditional clusters, among others, subsume the retail sector. In the region of Mühlheim / Essen, for example, you would find many retail companies. Solingen is famous for cutlery; roller bearings are produced in and around ­Schweinfurt; and Nuremberg is the place where you would find the most important pencil manufacturers. Clusters of companies that are specializing in what Simon calls “ripe” products or technologies are, for example, manufacturers of surgical instruments (Tuttlingen), ventilation (Hohenlohe), or metal bending (Siegen / Haiger). The registered society Measurement Valley (Göttingen) currently comprises about 40 companies and organizations from their respective industries and, while Simon uses the term “Chicken Valley” for the city of Vechta, the local people, according to my cursory research, seem to more often refer to the region as the “Silicon Valley of Agricultural Technology.” Looking at the clusters for early stage technologies, Simon (2012, pp. 60–62) mentions recycling ­(Karlsruhe / Essingen) and carbon fiber (Munich / Augsburg / Ingolstadt). The author has also observed that there are small towns like Neutraubling and Künzelsau that seem to provide a breeding ground for a viral entrepreneurial spirit and an infectious inventive mind.

To identify those regions or clusters that are especially relevant for your purposes, you could peruse the online platform https://clusterplattform.de that is operated by the Federal Ministry for Economic Affairs and Energy. You could also double-check how Germany Trade and Invest’s (GTAI’s) website http://gtai.de can be helpful for your research. GTAI offers in-depth information on the economic structure of Germany for each federal state. Another website that I can recommend in this context: https://make-it-in-germany.com.

If you are an investor, I suggest that you, at some stage in the process, also get in touch with the business promotion agencies of the various states, such as Invest in Bavaria or IMG – Investment and ­Marketing Corporation Saxony-Anhalt. Some of the things you can ask them to help you include finding office space or connecting you to ­lawyers and tax consultants. Many (if not all) of their services are free of charge.

You would still find the highest concentration of (successful) SMEs in the West of Germany; after almost 30 years of German unification, there continue to be major structural differences. Table 1.4 shows the distribution of the top 10,000 SMEs by federal state, as researched by Die Deutsche Wirtschaft (2018). I have added the English language names of the federal states and the names of the state capitals for your convenience. I have also embedded information on whether the states belonged to East or West Germany between 1949 and 1990.

Table 1.4 Federal states ranking of the top 10,000 SMEs as per Die Deutsche Wirtschaft

Rank	Federal state (German / English)	(Former) East or West?	Capital (German / English)	Number of top 10,000 medium-sized companies
1	Nordrhein-Westfalen / North Rhine-Westphalia	West	Düsseldorf / Dusseldorf	2,288
2	(Freistaat) Bayern / (The Free State of) Bavaria	West	München / Munich	1,970
3	Baden-Württemberg / Baden-Wuerttemberg	West	Stuttgart / Stuttgart	1,819
4	Niedersachsen / Lower Saxony	West	Hannover / Hanover	988
5	Hessen / Hesse	West	Wiesbaden / Wiesbaden	554
6	Rheinland-Pfalz / Rhineland-Palatinate	West	Mainz / Mainz	397
7	Hamburg / Hamburg	West	Hamburg / Hamburg	356
8	Schleswig-Holstein / Schleswig-Holstein	West	Kiel / Kiel	348
9	(Freistaat) Sachsen / (The Free State of) Saxony	East	Dresden / Dresden	329
10	Berlin / Berlin	Formerly divided city (East and West)	Berlin / Berlin	263
11	(Freistaat) Thüringen / (The Free State of) Thuringia	East	Erfurt / Erfurt	159
12	Sachsen-Anhalt / Saxony-Anhalt	East	Magdeburg / Magdeburg	133
13	Bremen / Bremen	West	Bremen / Bremen	119
14	Brandenburg / Brandenburg	East	Potsdam / Potsdam	115
15	Saarland / Saarland	West	Saarbrücken / Saarbrücken	90
16	Mecklenburg-Vorpommern / Mecklenburg-Western Pomerania	East	Schwerin / Schwerin	72

According to the Federal Ministry of Education and Research, the new German Länder2 Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt, and Thuringia primarily lack large research-based companies and mid-sized companies that are experienced in the global marketplace. An entrepreneurial funding policy has, therefore, been established. Investors are often attracted by reduced local business taxes; the municipal tax factor can play a major role when making your FDI decision, especially when choosing a location to set up shop!

Regional Peculiarities

Stewart Siegel, an international technical director from the United States living in Germany, finds the regional differences “pretty drastic.” However, he is “not sure even all Germans understand the differences themselves.” Apart from the landscape, industries, infrastructure, and the tax factor, would you be able to observe any (other) disparities?

Baden-Wurttemberg’s slogan “Wir können alles. Außer Hochdeutsch” (We can do everything, except speak proper High German) in a self-­deprecating manner sums up how the people of the state (or their ad agency) like to see themselves:

Poor in natural resources, the population is overflowing with ingenuity, inventive spirit and an appetite for hard work. The creativity and ingenuity of its people, their skill and expertise, their commitment to industry, science, education, culture and society have made Germany’s Southwest one of the world‘s most successful regions.

We can read this in the state’s online presence (Staatsministerium Baden-Württemberg n.d.). The Swabian dialect is indeed somewhat extraordinary, but dialects themselves are omnipresent. Language is something that greatly varies within Germany, although all native ­Germans should be able to speak proper High German at some advanced level. Apart from the dialect (certain terms we use), the tonality or ductus greatly varies. The background noise in public transportation, for example, sounds very different depending on which place you are in. People in Hamburg are comparably soft-spoken and, to me, sound more sophisticated and distinguished than people in many other parts of Germany. In Berlin (the “poor, but sexy” city, quoting former mayor Klaus Wowereit), you do not need to be able to follow the accent to get the message(s). Snippy or detached comments hit your face like hailstorms; when you check in to your hotel, for example. I had never noticed how rude my Bavarian dialect possibly sounds (especially for a foreigner), until I sensed how one of my international clients froze in shock when I spoke to (or barked at) a local trade show visitor during a major building and construction fair in Munich.

A lot of things are in the responsibility of the 16 states and influence peoples’ lives from the womb to the tomb; although, at that last stage, you might not exactly care about the local regulations on the obligatory inspection of the (your) corpse any more. For example, the timings of school holidays can vary from state to state, and you might want to take this into account when planning your business trip to Germany, especially during the summer. Police is also of federal concern. Very recently, the Bavarian police ventured out to Munich airport to track down families who wanted to go on holiday even though the school break had not yet officially started; 10 parents were fined. You may also take this as an example of Germans’ appreciation for rules, regulations, and structures—even if people do not always go by the rulebook.

Shop opening hours can greatly vary, although, so far, shops across Germany are not allowed to open on Sunday or on (regional) bank holidays. In the more conservative southern state of Bavaria, shops are allowed to be open between 6 a.m. and 8 p.m., while in Saxony, people can (theoretically) grocery shop until 10 p.m.; that shopkeepers can keep their stores open around the clock in many other German states feels alien to me! If I want to buy toiletries or something to eat after 8 p.m., I need to head for the Munich central terminal or the nearest gas station. On the other hand, in some rural and neglected areas, especially in the east, people do not have any shops to go to any more, let alone train stations, post offices, or hospitals! For the size and number of inhabitants of the various states, refer to Table 1.5 (Statistisches Bundesamt 2018b). I have sorted the federal states by the size of the territory.

Table 1.5 Federal states size and number of inhabitants as of December 31, 20163

Federal state	Size of the territory (sq km)	Population
		Altogether	Per sq km
Bayern	70,542	12,930,751	183
Niedersachsen	47,710	7,945,685	167
Baden-Württemberg	35,749	10,951,893	306
Nordrhein-Westfalen	34,113	17,890,100	524
Brandenburg	29,654	2,494,648	84
Mecklenburg-Vorpommern	23,294	1,610,674	69
Hessen	21,115	6,213,088	294
Sachsen-Anhalt	20,452	2,236,252	109
Rheinland-Pfalz	19,858	4,066,053	205
Sachsen	18,450	4,081,783	221
Thüringen	16,202	2,158,128	133
Schleswig-Holstein	15,802	2,881,926	182
Saarland	2,571	996,651	388
Berlin	891	3,574,830	4,012
Hamburg	755	1,810,438	2,397
Bremen	419	678,753	1,617
Germany	357,578	82,521,653	231

Food is also something that varies from region to region. What I have noticed, apart from culinary specialties, is that, when I am in a restaurant in Cologne (Köln), the choice of vegetarian dishes is smaller than that in where I live. And, the beer comes in smaller glasses! I have also observed that people in Cologne like to talk a lot. While the natives of Munich are happy to mutter into their one-liter jugs, people from Cologne would rather order and share one so-called Kranz (wreath) of 0.2 liter glasses after another.

If you are traveling to Germany for business, do not neglect regional holidays and the so-called “fifth(s) season(s) of the year.” During the “crazy days” of the Cologne Carnival, you might not be able to arrange for a single business meeting, and when you try to book a hotel room during Munich Oktoberfest, be ready to be charged a fat premium.

Much-traveled consultant Alexander Wurz points out that the regional differences in Germany “are stronger than in many other countries due to our history.” One should remember “that we had, in 1648, over 350 more or less autonomous states, kingdoms, and independent duchies, and that Germany has been a nation only since 1871.” Maybe that is also a reason why Germans are sometimes so biased about their neighbors. I once mentioned to a client in Bremen that I was especially looking forward to visiting Hamburg (about 125 km to go). Big mistake! I soon learned that, for a long time, people in Bremen have been suffering from some inferiority complex toward Hamburg (HH). For intercultural coach Andrew MacKichan, who has grown up in the UK, it “was quite a shock to discover that the HH people can’t stand the Bavarians.” And my friend Tina Oreskovich, a service delivery manager from Würzburg, a region that has not exactly voluntarily joined the Free State of Bavaria (short: Bavaria), adds: “Franconians are not Bavarians!”

This reminds me of how I, as a child, once overheard a conversation in which a major scandal was being discussed: a girl from Catholic Lower Bavaria had wed a Protestant from Franconia (a Lutheran, God forbid!). But that must have been some 35 years ago, and things are changing in Germany—like everywhere else. Most probably, these specific regional differences and animosities are not so crucial for foreigners and become secondary when dealing with Germany’s international top companies anyway. If you want to move to Germany, or an expat position is offered to you, you might want to double-check, however.

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