What Germany Knows

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Germany, nimble on the slopes of global economics. (Credit: Getty/Matthew Stockman)

A shout out today to Robert Marquand of the Christian Science Monitor who considers, among other things, why Germany is flourishing while other developed economies flounder.

Marquand takes us to an industrial park near Dresden, where solar company Roth & Rau does nearly $300 million in sales, mostly to Asia.  They don't make solar panels. They tinkered with the coating requisite for the silicon wafers in solar panels, and developed it into a conductive film that gets 16 percent more electricity out of the transaction between sun and panel.

More than 1,500 small- and medium-sized firms in Germany produce high-end niche products. They're called Mittelstand, and they account for more than half of German exports and 70 percent of its workforce.

Many, like Roth & Rau, are or were family owned. They operate on "old-fashioned" values of worker loyalty and core competency. When successful, they usually don't sell off: They plow profits back into the firm. They keep their production and quality control local.

At Roth & Rau, everyone knows the machines they sell to China will be copied. They can't do anything about it. But they also know duplicating the precision-coating process isn't easy, and this has given them an estimated five-year jump on Chinese capability.

To stay ahead, the company makes the sale of training and technology as important as hardware.

Germany's future success, however, hinges on whether ethnic Germans can bring themselves to bring up non-ethnic Germans in the economy. Today about a fifth of the country's population is stuck doing menial labor - a tremendous waste when the population is aging - just as it is elsewhere in the developed world.

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About Rachael Myrow

Rachael Myrow hosts the California Report for KQED. Over 17 years in public radio, she's worked for Marketplace and KPCC, filed for NPR and The World, and developed a sizable tea collection that's become the envy of the KQED newsroom. She specializes in politics, economics and history in California - but for emotional balance, she also covers food and its relationship to health and happiness.

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