Germany Competitiveness The Porters Diamond Context Economics Essay

Germany scrap The Porters Diamond Context Economics EssayContext for plastered strategy and rivalry Germany can be considered center of Europe both for its geographic and political position. This gives to Germany the possibility to lead the European trade and to manage a relevant diversification of its internal preservation it means to create a hugely competitive business environment for German companies.The efficiency rate in German large and small companies is higher than international standards due to the great amount of off shoring and outsourcing practices so that it makes this thriftiness the virtually competitive in Europe.Throughout last years, German small and medium enterprisers performed better than the large atomic number 53s, overtaking even the US competitive standards, as shown by the Work Competitiveness Yearbook 2010.Those small enterprisers argon the so called hidden champions because they are little known to the usual even if they are world market leaders.In distinguish 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 Copernican role in boosting investments and employment rate. They also make the success of German merchandise with the 80% of the production sold abroad the Machinery and Equipment Cluster, for instance, holds almost 20% of world export market share.These companies successfully compete on origin processes and on improving efficiency, getting a great benefit from both the excellent European and German intellectual property protection. According to the World Economic Forum (WEF), Germany represents one of the worlds best location in planning and operating security and it is one of the leading Nations in the field of propriety rights protection and contracts protection. This excellence let Germany to shell out ove r 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 important worlds patent offices the European Patent Office, the United States Patent and Trademark Office, and the Japan Patent Office.The German legal schema itself can be considered one of the most economical and independent of the spotless world. Moreover, the social and political stability of the country and the Germans culture based on the total respect of the laws principles make this country a greatly castive places for incorporated investments projects even for foreign firms in almost all the industries.In addition to the high quality of the legal organization, Germany has developed a very internationally competitive taxation trunk in 2008 an ambitious reform was made in rewrite to decrease the corporate tax nitty-gritty by around the 25% and the corporate income tax down to 15% on all corporate taxable earnings.Eventually, Germany has developed a unique corporate governance system that makes possible a virtuous match surrounded by workers and employers in order to avoid time-consuming and value-destroying disputes it becomes a key success agentive role to rise up during recession periods. As a matter of fact, core decisions are scoopn through Job Alliances that enable flex-security on job market in order to keep companies competitive while maintaining job positions.Great importance is given to the role of federal government which gives macroscopical support to this system promoting grants and self-regulation policies.Factor conditions Germany benefits from a huge number of natural resources such as building materials, natural gas, wood and other strategic natural elements. Its wide prop up gives to the country a lot of space that can be exploited focusing on clean energy production. Moreover, the climate represents an important factor in producing energy with the key role play by the wind that constantly flo ws in the northern part 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 sanely big population of Germany can be considered little diversified in culture 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 capital point of view is difficultly influenced by the unique education system that represent a best practice in all over the world. This is focused on the importance given to the professional training in order to provide people, since earlier age, with a set of skills useful to join the job market. Parallel to the professional-oriented approach there is also a very good and selective university system for the large number of young people that decide to longer dedicate themselves to stu dy activities mechanical engineering, with more than 400,000 matriculate students, ranks second in the superlative degree 20 of the most in-demand study programs and provides the highest skilled workers for the main sectors of the country such as automotive, cable carry, electrical and electronic.This dual track allows enterprises to reduce dramatically the labor cost in term of training programs and young people to enter in the job market already with a high productivity rate. Germany can be considered extremely attractive as a location for investments due to high productivity rates and stable wages. In addition, in recent years the boilers suit labor cost has been the lowest 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 workforce 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 terms of cypher 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 (Private and human race 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 innovative products.Eventually, Germany derives its economic power also from its important and well organized grid of transportation infrastructures the 2009-2010 Global Compe titiveness write up of the WEF ranked Germany at the first position in terms of infrastructures. The rail system, which connects the country with all the neighbors by high speed rail, is gaining more efficiency give thanks to the open access to the market given to privates that make the sector very much more competitive than the state monopoly. This makes Germany the 6th position for railways infrastructure in comparison 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 comport investments and to improve, as much as possible, the venture capital system by the adoption of specific policies. Today, German legal framework makes no distinction between national and foreign investments promoting principles such as freedom in trade and payments and the reduction of barriers.Moreover, there are extra 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. tho 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 Domestic demand is therefore becoming a more significant driver 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 role is played by the government in boosting investments and musical accompaniment internal demand there are available some governments l oans 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 homogenize 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 complex supply and demand structure which express the need to measure the high level o f constraints due to the global environmental challenges.Related and supporting industries the important number of local suppliers are strongly supported by the efficient 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 Federation 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 mostly contributes to the technology transfer process and research activity in the growing market of renewable energies such as solar and wind power. Germany is home to several research infrastructures with global significance in physics, earth science, climate research or the humanities. Examples of research infrastructures a re Deutsches Elektronen-Synchrotron (DESY) and the German Climate Computing 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 clusterGREEN 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)Role of presidential termPublic demand, self-regulation, promoting networks and clusters.Public RD support and PPP P.11 and othe rs (ig. Website)Role of Federal Government in green energy P.5