Übung macht den Meister: How Germany Perfected Quality.
Germany is synonymous with product quality. Ranging from its renowned software companies such as SAP to the automobile powerhouses of BMW, Porsche and Volkswagen, it is not difficult to understand how the “made in Germany” label became the most respected in the world. It is not only fascinating how the country’s industries can produce consistently superior products, but also to consider how a country’s culture, education system and approach to industrial relations blend seamlessly to produce an industrial equilibrium. To believe however, that this was always the case would be wrong. German quality was not always respected as it is now, and there a variety of factors which have simultaneously been of detriment to the country, but also have been of benefit to the nation, igniting the flame of innovation and change.
19th Century Germany: The Setting of a Movement in Motion
The advent of the steam engine launched the British and French empires into industrial superiority within Europe. Germany too benefited from the industrial possibilities allowed through rail, but even with its already established educated workforce and strong work-ethic, the country couldn’t keep up with its neighbours. One factor however led to the country’s eventual position as an economic powerhouse by the turn of the 20th century: copyright law.
Copyright law had been established in Britain since the early 1700’s, whereas the Germans had yet to enact legislation to dissuade potential plagiarizers from taking works to print and distribute in their thousands. This led to a situation where swathes of literature, mainly academic, flooded all corners of Germany, allowing for a population who previously were unable to afford such books to possess small re-printed libraries. The vast amount of readership allowed academics to publish their scientific results to the vast readership, and in doing so disseminate knowledge in an unprecedented way. With on average 14,000 papers being published a year in Germany, a scientific movement was set in motion allowing for the “Gründerzeit” (foundation time). Industrialists such as Alfred Krupp, carrying on the practice of appropriation, conducted espionage on British steel mills before taking his findings back to Germany and establishing his own steel manufacturing plants. This copycat practice coupled with his introduction of sickness insurance and housing for workers in return for their company loyalty propelled Germany into being a true competitor against its international rivals. Even when laws whereby products had to state their origin (e.g. made in label) were introduced in order to highlight the inferior copycat Germany products, the Germans instead focused on utilizing their exceptional production capabilities borne from widespread academic readership and an educated yet cheap labour force to create competitive products at lower prices.
The War Years
By the turn of the century German products of high quality were prevalent across Europe’s economies, until the outbreak of two world wars would once again strip away any German advancements in their industrial reputation. Both conflicts left Germany hurting. By 1945 Germany was a shell of a nation, left scarred by constant bombing and harsh years of war, not to mention that the nation was divided between two opposing forces, making any sense of industrial or economic cohesion impossible. Germany’s reputation was in ruin and this was reflected in its produce, with the brand “made in Germany” becoming associated with that of a loser, yet there remained a phoenix to be born from the ashes of a ruined Germany.
The Miracle on the Rhine
With the war over, a huge number of scientists who previously been working in the war effort were left without an option but to enter their respective fields within the consumer industry. While Germany’s infrastructure was left incapacitated, there remained a hard-educating, workforce eager to pick up the pieces and begin anew. Sanctions on the Axis forces to engage in military research also allowed for an even greater emphasis to be placed on R & D within civilian economy. Clever economic decision making by then Chancellor Konrad Adenauer and his economic minister, Ludwig Erhard utilized this technological expertise and workforce and ignited the flame of the “Wirtschaftswunder” (economic wonder). This homegrown innovation, aided by the Marshall Plan and introduction of a new currency allowed once again for West Germany at least, to flourish. This strength within West Germany’s industrial capabilities helped to raise East Germany’s industrial prowess post re-unification.
Experience in Quality and innovation in Education
While much of Germany’s current economic success can be owed to the decisions made in the wake of WW2, there are also a variety of long-established factors which played a vital role in its success. An emphasis on quality was important in Germany as far back as the 19th century, with the introduction of a “craftsman’s code” by Emperor Wilhelm I. This practice of protecting and supporting craftsmanship is carried on to this day, with heavy regulation imposed on trades within Germany, with a ‘master craftsman’s license’ being mandatory in many fields. The propensity of Germans to meet their own quality criteria is borne from their “dual vocational training system”, whereby young adults can enter a trade-training course that lasts between 2-3 years with a high degree of education within their respective field. Due to the high skill level associated with such training, there is little distinction in the quality between learning a trade and obtaining a degree. This sentiment is echoed in the partition of tertiary education between universities and “Fachhochschüle” (an equivalent of an institute of technology). Understandably more focus is placed on specific fields such as engineering within these Institutes. The lack of educational snobbery allows for equality and a better educated pool entering the workforce.
The Little Guys on the World Stage: Germany’s local heroes
The “Mittelstand” within Germany, referring to the vast amount of small and medium enterprises (SME’s) within Germany also plays a huge role in strengthening company culture and loyalty, allowing for exception quality to be produced by a motivated workforce. 37% of corporate turnover within Germany can be attributed to these SME’s, along with employing over 11 million people. Due to these homely roots and integration with both the local community and economy, the firms of the Mittelstand are naturally more predisposed to care for their workers better than a transnational corporation which lacks a relationship with the areas in which they operate . This results in superior industrial relations and exceptionally good sick and maternity leave allowances (such as receiving 100% of one’s salary for up to 6 weeks while on sick leave).
This loyalty to their community, coupled with a vast number of firms sharpening their expertise in a specific field leads to a situation where the German economy can provide the world with an array of superior products at better prices than that of the international market.