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Industry in Germany

The overall robust industrial sector is on the right path towards realising Industry 4.0.
Industrie 4.0 Roboter
© stock.adobe.com/Alexander Limbach

Industry in Germany specialises in the development and manufacture of complex goods, in particular capital goods and innovative production technologies. Industry carries far more weight in Germany than in many other economies, and a total of 7.5 million people work in industry and manufacturing.

The economy’s capacity for innovation is regarded as the driving force behind Germany’s economic strength. The step-up in R&D activities since 2007 has spurred trends, whereby both business and the public sector have played a role, and the Federal Government’s High-Tech Strategy has been a key stimulus here. In 2018 a total of 105 billion euros was spent on R&D in Germany, which corresponds to a 3.13-percent share of gross domestic product (GDP) and puts Germany well above the OECD average of 2.4 percent.

European champions of invention

Germany is considered to be Europe’s champion inventor. In 2019 German companies filed around 27,000 applications for patent protection to the European Patent Office in Munich. The same year, 67,437 inventions were registered with the German Patent and Trade Mark Office (DPMA). The automotive supplier Bosch, with 4,202 registrations, and the Schaeffler Group (2,385), which likewise operates in the automotive components sector, were the most prolific. In total there were exactly 131,999 German patents in force in 2019.

Today, Germany as an industrial centre is strongly characterised by its services economy. A good 80 percent of all companies operate in this sector, accounting for almost 70 percent of gross domestic product and three quarters of all jobs. Of around 30 million people in gainful employment, 12 million work for public or private service providers, almost 10 million in retailing, hospitality and transportation, and more than five million for corporate service providers. In retail and hospitality in particular, however, employment figures are likely to have fallen steeply due to the corona pandemic.

Digital transformation

The economy is currently in the midst of the fourth industrial revolution, which represents a radical shift. Driven by the Internet, the real and virtual worlds are growing together to create an Internet of Things. The Federal Government’s aim is for the economy and scientists alike to support the implementation of Industry 4.0 and in so doing to position Germany as a leading provider of these technologies and as a future manufacturing hub. This challenge has become ever greater, however, against the backdrop of the economic consequences of the corona pandemic.