It is not only the 30 major corporations such as Siemens, Volkswagen, Allianz, SAP and BASF listed on the German share index (DAX) that make the country competitive internationally, but ten thousands of small and medium-sized enterprises (up to 500 employees) in manufacturing, in particular mechanical engineering, the supplier industry, as well as nano and biotechnology, which frequently form clusters. Small and medium-sized enterprises employ over 25 million people, making them the biggest employer. They are regarded as the backbone of the German economy and also provide the majority of apprenticeships for young people. Industry is also an important pillar of the German economy. In comparison with other industrial nations such as Great Britain and the USA it has a broad basis with a strong workforce – five million people work in industrial companies. In no other traditional economy does classic indus-trial production play a comparably major role. It contributes some percent to German economic output.
Germany specializes in developing and manufacturing complex industrial goods, primarily capital goods and innovative production technologies. The most important sectors of industry are automotive manufacture, mechanical engineering, electrical engineering and chemicals. These four sectors alone provide work for 2.9 million people, who generate sales worth in excess of EUR 800 billion. Automotive manufacture is the innovation engine room: Around 30 percent of all internal company spending on R&D is in this sector. With the six manufacturers VW, Audi, BMW, Daimler, Porsche (VW) and Opel (General Motors) Germany, alongside Japan, China and the USA is one of the largest car producers – with a significant share of the upper mid-range and luxury market segments. Nevertheless the worldwide crisis in sales has hit German car manufacturers hard. So as to be braced for the future all vehicle manufacturers are now working on environmentally friendly drives, for example on a new generation of diesel engines, hybrid drives and further electrification of the powertrain.
With a share of a good 13 percent, in terms of sales the almost 6,000 mechanical engineering companies are in second place after vehicle manufacture. As the largest employer in industry (965,000 jobs) and the leading export sector, mechanical engineering has a key position in the German economy. The electronics industry is one of the strongest, particularly innovative growth sectors. Over 20 percent of investment by industry in research and development is in the electronics industry. The chemical industry, as a result of takeovers and mergers partially owned by foreign companies, primarily manufactures producer goods. In BASF in Ludwigshafen Germany boasts the world’s largest chemicals company.
More than 29 million people work in the service sector – around 12 million in private and public service providers, ten million in commerce, hospitality and transport, and seven million in financing, leasing, and corporate services. Banking and insurance are a pillar of the service sector. It is concentrated in Frankfurt/ Main, the leading banking sector in continental Europe, where the European Central Bank (ECB), the German central bank, (the Bundesbank), and Deutsche Börse are all headquartered.<//font>