The German economy
German-speaking countries’ economic significance is even greater. Germany, with a population of just over 82 million, boasts the world’s fourth-largest national economy, while German-speaking Switzerland and Austria, whose per capita GDPs rank third and fourth in the EU, are also significant. The 2015 edition of the World Economic Forum Global Competitiveness Report ranks Switzerland first among the most competitive countries, with Germany fourth (Singapore is second, the U.S. third).
The Bloomberg business report for 2014 also ranked Germany fifth among the best current places to do business, while the UN Conference on Trade and Development’s World Investment Prospects Survey (2012-2014), placed it third.
In 2013, foreign investment in Germany totaled 23.4 billion euros, with the U.S leading the way. In ranking Germany so high, the WEF Competitiveness Report considered, among other factors, market size, innovation, infrastructure, and training. In this last category, German is particularly outstanding.
As the Wall Street Journal (6/14/2012) reports, U.S. companies and state governments are increasingly turning to German companies for help in training skilled factory workers.
In the area of world trade, Germany’s significance is greater than just its GDP would indicate. From 2003-2008 it was the world's largest exporter. It is now second to China, even though its exports continue to grow dramatically, and it has the world's highest balance of payments surplus. At the same time, Germany is the second-biggest donor of aid to developing countries.
Germans are No. 1 in the world when it comes to travel — 40 million Germans spent 24.2 billion euros on travel to other countries in fiscal 2012 — and Germany itself is a major tourist destination. Between January and May 2012, international visitors accounted for 23.8 million overnight stays in German hotels, and in 2010 Berlin passed Rome in the number of foreign visitors. Austria and Switzerland are of course also popular destinations. In its list of the 44 “most compelling travel destinations” in the world for 2009, The New York Times put Berlin at No. 4, Vienna No. 8, and Cologne No. 30 (1/11/2009).
In addition to its exports, Germany invests heavily all around the world. In 2001, Volkswagen plants in China supplied over half of all the automobiles sold there, and Audi has just opened a major manufacturing facility in India. Similarly significant investments can be found in many other parts of Asia, Africa, Australia, Europe, and the Americas. The more than 700 German companies with operations in Mexico, for example, account for five percent of that country’s GDP.
Despite its global reach, Germany maintains an especially strong economic relationship with the United States. German investment in the U.S. is over a trillion euros, while the U.S. total in Germany is a trillion dollars. Each country's companies, through their subsidiaries, employ around 800,000 people in the other's work force. Between 2014-18, Volkswagen will be investing $900 million in its Tennessee assembly plant, while BMW is putting $1 billion into its South Carolina facility. In 2013, German exports to the U.S. totaled $116.9 billion; U.S. exports to Germany amounted to $47.4 billion. Massachusetts exported $1.72 billion in goods and services to Germany in 2013, more than to any other country except Canada.
Mid-size businesses traditionally form the backbone of the German economy — according to the Institut für Mittelstandforschung (IfM), 95.1 percent of all German companies are family-owned businesses that account for 45.1 percent of all business volume. Yet of the world's 50 largest companies, nine are German: BASF, BMW, Daimler, Deutsche Post, Deutsche Telekom, E.ON, Metro, Siemens, and Volkswagen. HochTief is the world's leading international construction firm, and the Deutsche Bank one of its biggest financial institutions.
In terms of money spent on research and development, Daimler and Siemens rank third and fourth in the world, while Volkswagen, Bayer, Hoechst, Bosch, BASF, Boehringer/Ingelheim, Deutsche Telekom, and Mannesman also occupy places among the first 90 (International Herald-Tribune, 26 Feb. 2000).