German job creation formula

germany jobs Germany’s unemployment rate is now at 5% (2014 est.), down from 6.9% in 2010 and 8.6% in 2007.

What’s even more interesting is that German is the developed country with the highest manufacturing labor force: 24.6% of the population, compared to 20.7% in the USA.

And this raises a question:

Is there a German formula to maintain manufacturing jobs in Germany? Is there a German way of preventing manufacturing jobs from going to China, India or even to other European countries?

The brief answer is YES.

There is a number of key factors explaining why Germany is having much more success than the United States or other European countries in keeping jobs at home.

In very broad terms Germany is succeeding because of…

  • Its specialization in high-quality and innovative industrial products;
  • The keep-factories-at-home policy of many German family-owned companies;
  • State job-protection schemes in times of crisis.

All this within the framework of an export-oriented economic policy.

We will deal with these issues in future posts.

They have a significant impact on what’s happening in Europe (where other countries are not taking advantage of German investment and job creation; and it is interesting to compare the German way of creating and maintain jobs in German with the economics of job creation and destruction in the US, the UK or China.

Data: CIA Factbook