Middle class

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Presentation of the main role of the middle class in Walter Wilhelm's "Mission of the Middle Classes" (1925)

The term Mittelstand is used in Germany and Austria

  • according to quantitative criteria for small and medium-sized enterprises (KMU, compare SME for English small and medium [-sized] enterprises ) and
  • according to qualitative criteria for companies in which up to two natural persons or their family members hold at least 50% of the shares in a company and these natural persons belong to the management. The terms medium-sized businesses, family businesses , owner-owned businesses and family-run businesses are therefore to be regarded as synonyms.

The expression from the class society only got this main meaning in younger years. In 2001 it still stands for the middle class in the Duden . It is still used that way, especially in Switzerland.

In the absence of equivalent translations, the word Mittelstand has found its way into the English and Spanish languages as a loan word .

Quantitative definitions

In quantitative terms, the term “Mittelstand” refers to companies in all sectors, including the skilled trades and the liberal professions , which do not exceed a certain size. Alternatively, the annual turnover , the number of jobs and / or the balance sheet total are used to determine the size .

Since the defining qualitative characteristics of medium-sized businesses (management, ownership structure, economic independence) cannot be adequately read from official statistics, their numerical and economic importance is often estimated using the SME definition of the Institute for SME Research (IfM) in Bonn.

In fact, the majority of small and medium-sized enterprises (SMEs) also meet the qualitative criteria of the definition of medium-sized companies. At the same time, family businesses with more than 500 employees or an annual turnover of more than 50 million euros also count as medium-sized businesses if they meet the above criteria. Small and medium-sized companies that are dependent on another company, on the other hand, do not meet the definition.

The KfW banking group defines medium -sized businesses as having a maximum annual turnover of 50 million euros. Companies with a turnover above this cannot apply for certain state subsidies from the KfW banking group. In an international comparison, the small business or the medium-sized company is defined using an upper limit that varies between 100 and 500 employees depending on the state.

For comparison: According to a recommendation by the European Commission on company size classes, small and medium-sized companies are companies with fewer than 250 employees and an annual turnover of less than 50 million euros.

Qualitative definition

The middle class is characterized by the unity of property , management , liability and risk , i. H. through the unity of economic existence and management as well as the responsible participation of the company management in all decisions relevant to corporate policy.

Economic importance

The economic importance of commercial medium- sized companies is usually calculated on the basis of the IfM Bonn 's definition of SMEs , since the majority of small and medium-sized companies belong to medium-sized companies. In addition, the defining qualitative characteristics of medium-sized companies (management, ownership structure, economic independence) cannot be adequately read from official statistics.

Accordingly, the middle class in the Federal Republic of Germany included in 2015

If, on the other hand, only the family businesses are considered, the economic importance is shown by the following figures:

  • Around 95% of the businesses and companies based in Germany are run as family businesses.
  • They contribute around 41.5% to the turnover of all companies.
  • They provide 57% of the jobs.

The middle class is not a rigid economic unit - on the contrary: The market economy system, which is also subject to international competition, constantly leads to structural changes, which in turn influence the composition and characteristics of the corporate landscape. For some years now, we have seen an increase in very small units - so-called “solo self-employed”. These are start- ups that are not designed to grow into a small or larger company over time. Instead, these entrepreneurs act as individuals on a permanent basis. In the recent past, new forms of cooperation (“changing networks”) have also emerged: Depending on the project requirements, teams of independent actors are formed who each contribute their specific skills and competencies - and thus work efficiently together. However, these entrepreneurs usually do not feel that they are “medium-sized”. The same applies to start-ups that have not been in the market for three years.

On the other hand, the affinity to medium-sized companies grows with company size and age: the older and larger the company, the more likely they are to see themselves as medium-sized companies. However, among the companies that consider themselves to be medium-sized, every seventh no longer belongs to the definition of the IfM Bonn because they no longer meet the criterion of “ownership and management in one hand”.

Medium-sized companies in Germany came under increasing competitive pressure in the course of advancing globalization and global corporations . In order to compensate for the resulting disadvantages, in the past decades more and more medium-sized companies have come together to form permanent cooperations, so-called association groups. As an individual member of a group, the respective family company retains entrepreneurial independence, but through joint cross-company activities it can achieve a market position that otherwise only large companies can offer. Association groups now appear regionally, nationally, nationally or even internationally. The cross-company cooperation of the group is usually organized from a legally independent head office and relates to various areas such as purchasing, marketing, logistics, IT solutions, financing services, consulting or training. In Germany there are currently around 250,000 companies from around 45 different branches of trade, craft and the service industry in around 400 associations. 320 of these groups are registered through the Central Association of Commercial Associations . V. (ZGV), based in Berlin, Brussels and Cologne, is organized in terms of interests.

The importance of medium -sized businesses is also evident from the fact that, among other things, over 160,000 small and medium-sized companies with approx. 4.3 million employees have organized themselves in the Federal Association of Medium-Sized Enterprises (BVMW) . The focus of the association's work is the formation of networks, the organization of events and the representation of political interests.

There are few things that have had such a lasting and beneficial effect nationally and internationally over the centuries as entrepreneurial medium-sized companies. It describes an entire form of culture, a form of social self-organization that is passed on from one generation to the next. The term “middle class” has therefore been adopted in many languages ​​as an attitude of mind, as an attitude to life, as a principle of success. It has not been translated. Newsweek, Economist, The Guardian and Financial Times, L'Express, Le Figaro and Le Monde, El Pais, Bloomberg and Harvard Business Review write about “German Mittelstand”. You have all been using the German term “Mittelstand” for many years. It can also be found in the Arabic, Chinese, English, French, Indonesian, Italian, Japanese, Polish, Portuguese, Russian, Spanish and Turkish versions of Wikipedia. Helfried Schmidt and Petra Tröger therefore point out that the "German Mittelstand" - like the cooperative system - should be included in the list of the intangible cultural heritage of mankind.

Geographical distribution

According to an analysis by the magazine Die Deutsche Wirtschaft - according to the absolute figures - with over 22% most medium-sized companies are in North Rhine-Westphalia, followed by Bavaria (21%) and Baden-Württemberg (17%). Bremen, Saarland and Mecklenburg-Western Pomerania are at the bottom, each with a share of around 1%.

In relation to size according to the number of inhabitants, however, the order is different: According to this, the city-states of Hamburg and Bremen lead with 185 and 182 large medium-sized companies per one million inhabitants, respectively, ahead of Bavaria (163) and Baden-Württemberg (159).

Also in the ranking of the cities with the most so-called “top medium-sized companies”, Hamburg is ahead in this medium-sized company analysis (329 companies), ahead of Berlin (227) and Munich (188).

Financing of the middle class

Small and medium-sized enterprises (SMEs) are financially well positioned: According to studies by the IfM Bonn and the University of Siegen in 2016, their equity ratio has been increasing continuously for years. At the same time, the liabilities of SMEs to credit institutions in relation to total assets decrease . For the first time, small and medium-sized companies have a higher equity ratio than large companies. Despite high growth rates, only very small companies still have a lower equity base.

One reason for this development lies in the stricter requirements imposed by Basel II and III : In order to prevent their debt capital conditions from deteriorating, many small and medium-sized companies - just like the larger family businesses - have increased their equity through retained profits. This was also positively supported by the reduction in corporate taxes. At the same time, many small and medium-sized companies are reducing supplier credits and short-term bank liabilities.

Even if SMEs continue to rely primarily on bank loans despite alternative financing instruments , the importance of equity financing is likely to increase. For example, almost all companies will have to face increasing digitalization with additional investments in information technology in order to maintain their future competitiveness. However, due to the company-specific solutions and the generally high loss of value, IT technologies are not very suitable for securing bank loans.


Web links

Wiktionary: Mittelstand  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. All of the Duden belonging to the middle class - German Universal Dictionary , 4th edition of the CD-ROM, Mannheim 2001
  2. IfM Bonn: KMU-Definition des IfM Bonn In: ifm-bonn.org , accessed on June 5, 2018.
  3. ↑ Definition of SMEs by the IfM Bonn - Institute for SME Research - Retrieved on June 4, 2018.
  4. ^ Institute for SME Research (IfM) Bonn: Backbone of the economy. The economic significance of small and medium-sized companies in Germany. Retrieved June 4, 2018.
  5. ^ Institute for SME Research (IfM) at the University of Mannheim: Importance of SMEs in Germany , December 13, 2005.
  6. L. Haunschild, F. Wallau, H.-E. Hauser, H.-J. Wolter: The economic importance of family businesses ( Memento from June 13, 2010 in the Internet Archive ), report on behalf of the Family Businesses Foundation, In: Institute for SME Research Bonn (ed.): IfM materials , No. 172, Bonn 2007
  7. Wolter, H.-J. with the collaboration of Sauer, I. (2017): The importance of owner-managed and family-run companies in Germany, IfM Bonn: IfM materials No. 253, Bonn. PDF
  8. The publication Mittelstand im Wandel offers a detailed analysis of developments in SMEs . (PDF)
  9. Martin Kaschny, Matthias Nolden, Siegfried Schreuder: Innovation management in medium-sized companies: strategies, implementation, practical examples. Gabler, Wiesbaden 2015, ISBN 978-3-658-02544-1 .
  10. PT-Magazin: Why the German Mittelstand ... belongs on the list of the intangible world cultural heritage of UNESCO. Retrieved May 9, 2019 .
  11. Ranking of the federal states according to top medium-sized companies .
  12. Where the middle class feels most comfortable .
  13. Pahnke, A .; Schröder, C .; Leonhardt, F .; Wiedemann, A. (2015): Financing structures and strategies of small and medium-sized companies: An inventory. IfM Bonn: IfM materials No. 242, Bonn, p. 43.
  14. Detailed information can be found in IfM Material No. 242 . (PDF).