Germany Competitiveness The Porters Diamond Context Economics Essay

Germany Competitiveness The Porters Diamond circumstance Economics EssayContext for firm st consec gradegy and rivalry Germany can be considered center of europium two for its geographic and political position. This gives to Germany the possibility to lead the European foodstuff and to manage a relevant diversification of its internal miserliness it performer to create a hugely competitive seam environment for German companies.The efficiency rate in German large and keen companies is soaringer(prenominal) than international standards due to the gigantic amount of off shoring and come to the foresourcing physical exertions so that it makes this thriftiness the most competitive in Europe.Throughout last years, German small and medium enterprisers performed better than the large ones, everyplacetaking even the US competitive standards, as shown by the Work Competitiveness Yearbook 2010.Those small enterprisers are the so called hidden champions because they are little known to the exoteric even if they are world market attractors.In contrast to the practice of the other European countries to develop economies related on large state-owned industrial champions, Germany could be considered much(prenominal) as a private driven economy in which the small and medium enterprises are playing the most substantial role in boosting investments and employment rate. They also make the success of German export with the 80% of the production sold abroad the Machinery and Equipment Cluster, for instance, holds near 20% of world export market share.These companies successfully compete on creative activity processes and on improving efficiency, getting a great benefit from both the excellent European and German intellectual property protection. According to the macrocosm Economic Forum (WEF), Germany represents one of the worlds best location in bring outing and operating security and it is one of the leading Nations in the sports stadium of correctitude rig hts protection and contracts protection. This excellence let Germany to grant over 12,500 patents at the EU Patent Office only in 2010 and to be the European leader in triadic patents, registered in the three most primary(prenominal) worlds patent offices the European Patent Office, the United States Patent and Trademark Office, and the Japan Patent Office.The German legal governance itself can be considered one of the most in force(p) and independent of the entire world. Moreover, the social and political stability of the soil and the Germans polish based on the total respect of the laws principles make this country a greatly attractive places for incarnate investments projects even for unconnected firms in almost all the industries.In addition to the richly quality of the legal organization, Germany has true a very internationally competitive evaluateation system in 2008 an ambitious reform was do in gear up to decrease the corporate tax burden by around the 25% and th e corporate income tax down to 15% on all corporate taxable earnings.Eventually, Germany has authentic a unique corporate governance system that makes possible a virtuous match between workers and employers in order to avoid long and value-destroying disputes it becomes a key success cypher to rise up during time out periods. As a matter of fact, core decisions are taken finished Job Alliances that enable flex-security on job market in order to keep companies competitive while maintaining job positions.Great importance is presumptuousness to the role of federal government which gives prodigious support to this system promoting grants and self-regulation policies. chemical element conditions Germany benefits from a huge number of natural resources such as construct materials, natural gas, wood and other strategic natural elements. Its tolerant drop off gives to the country a lot of space that can be apply focusing on clean heartiness production. Moreover, the humor repre sents an important factor in producing energy with the key role played by the enlace that constantly flows in the Yankee get down of the country. The prevalence of lowlands in northern regions makes Germans able to take the most possible advantage of the wind, becoming part of the Northern Power Cluster for wind energy production.The elegant big population of Germany can be considered little diversified in kitchen-gardening and tradition with a big prevalence of German native speakers over the other cultures ( almost 91% of the entire population, as the CIA World Factbook points out ).The German position on human nifty point of escort is strongly influenced by the unique education system that represent a best practice in all over the world. This is focused on the importance prone to the professional training in order to win masses, since earlier age, with a set of skills useful to join the job market. agree to the professional-oriented approach there is also a very good a nd discriminating university system for the large number of girlish people that decide to longish dedicate themselves to study activities mechanical engineering, with more(prenominal) than 400,000 matriculate students, ranks second in the top 20 of the most in-demand study programs and provides the high upest hot workers for the main sectors of the country such as self-propelling, machinery, electrical and electronic.This dual track allows enterprises to reduce dramatically the labor costs in term of training programs and young people to enter in the job market already with a high productivity rate. Germany can be considered highly attractive as a location for investments due to high productivity rates and stable wages. In addition, in recent years the overall labor cost has been the final in Europe with an annual increase rate of less than 2% this job market context contributes to enhance strong competitive business relations.Unskilled workers represent almost the 20% on the total work force this evidence reflects the attention paid to education and emphasizes the companies ability to attract skilled workforce from other countries.Germany Important concerns from governments point of view remain the unemployment rate (at the 6% in 2011, as said in CIA World Factbook) and the pretty low participation in work force, compared with countries such as US, UK or Japan.In addition, Germany is one of the worlds leaders in RD investments, both in damage of budget and percentage of GDP, reaching the 2.8% and overlapping the EU average of 2.1%. The high regard to investments is coming both from the public and the private sector and the great number of PPPs ( secret and Public Partnership) is playing a key role in German competitiveness and in planned development. The high level of RD investments impacts positively on the dynamicity of German economy over 27% of the manufacturing turnover is generated from advance(a) products.Eventually, Germany derives its econom ic power also from its important and well organized control grid of transportation infrastructures the 2009-2010 Global Competitiveness Report of the WEF ranked Germany at the first off position in terms of infrastructures. The rail system, which connects the country with all the neighbors by high speed rail, is gaining more efficiency thanks to the open approaching to the market given to privates that make the sector much more competitive than the state monopoly. This makes Germany the 6th position for railways infrastructure in affinity with the other states of the world (CIA World Factbook ). Water ways and harbors are extremely well developed too and the airports system is ranked 13th in the CIAs comparison between countries as stated in the CIA World Factbook.By the way, governments biggest challenge is to continue to increase the already large flow of foreign direct investments and to improve, as much as possible, the venture capital system by the adoption of specific poli cies. Today, German legal framework makes no distinction between national and foreign investments promoting principles such as immunity in trade and payments and the reduction of barriers.Moreover, there are special treatments and opportunities for young entrepreneurs and start-ups on one hand, special conferences and events like the German Equity Forum, and, on the other one, proposals of venture capital partnerships through development banks and the German Private Equity and Venture Capital Association. Further financial assistance is given at regional, national and European level through a wide number of instruments cash incentives, interest reduced loans, public guarantees, labor-related incentives and RD grants.Demand conditions municipal demand is therefore becoming a more significant number one wood of Germanys economic expansion (from CIA World Factbook). Due to the Euro financial crisis the export rate to EU cover the loss in term of exports. In this perspective, a key r ole is played by the government in boosting investments and supporting(a) internal demand there are available some governments loans made up for enterprises in order to enable them to borrow new capital at a lower interest rates and, in turn, be able to offer lower prices to the consumers market.A great influence on the demand is played by the high level of quality and environmental standards that characterize German regulation. Germany has a virtuous regulation history, starting with the Deutsches Institut fr Normung (DIN) during the 20s until today a huge number of innovations has been introduced in this field such as self-regulation processes related to the new public governance system.German standards and their regulation are also much influenced by EU, which is trying to equalize the regulation of the Common Market and to stimulate cleaner manufacture and energy production (EU 20/20/20 Program) this affects Germans big industrial sectors such as machinery, chemical and power clusters. This context originates a more complicated supply and demand structure which express the need to assess the high level of constraints due to the global environmental challenges.Related and supporting industries the important number of local suppliers are strongly supported by the economic system of German scientific infrastructures set up both at the federal and local level . Germany has various types of research locations such as universities, laboratories, non-university institutes, companies and federal official as well as Lnder institutions. Moreover, the German union of Industrial Research Associations (AiF) is a great example of how German companies themselves cooperate to research and innovation activity contributing directly to the country competitiveness. The AIF largely contributes to the technology transfer process and research activity in the developing market of renewable energies such as solar and wind power. Germany is basis to several research infrast ructures with global significance in physics, earth science, climate research or the humanities. Examples of research infrastructures are Deutsches Elektronen-Synchrotron (DESY) and the German Climate figuring Centre (DKRZ).In addition, Germany has a greatly developed Machinery and Equipment industry which provides the supply of power transmission engineering, material and air-handling technology and machine tools. This is the most innovative sector within the country and heavily influence German economy supporting all the other strategic sectors such as chemical, electronic, automotive and renewable energy, providing the sub-components needed for production processes.Da inserire nel diamante sul cluster thou ECONOMY, INVESTMENTS(clean power)Germany is the world leader in green technologies leader in sustainable industries (wind energy, photovoltaic, bioenergy industry,Electricity (demand, import, exports, quanto produce il solare, il vento..)WIND ENERGY p.6PORTERS FORCES (Porters book) use of GovernmentPublic demand, self-regulation, promoting networks and clusters.Public RD support and PPP P.11 and others (ig. Website)Role of Federal Government in green energy P.5