Monique Surges, CEO of the New Zealand German Business Association.
This week, Small Business Editor-in-Chief Caitlyn Sykes speaks with business owners about German relations.
Monique Surges is CEO of the New Zealand German Business Association.
Can you tell me a bit about the SME landscape in Germany and the role these types of companies play in the wider German economy?
I guess we should first define a German SME, or MittelstÃ¤ndler, because there seem to be big differences in the definition from country to country. According to the German definition, an SME has up to 500 employees and up to 50 million euros in annual turnover. The EU definition only takes into account companies with up to 250 employees and up to â¬ 50 million in annual turnover. In New Zealand, an SME has less than 20 employees, so that’s a huge difference.
The characteristics of a German SME are independence or family ownership; SMEs in Germany are highly respected and the attitude is to pass these entities down through the generations. They also have a commitment to this thing called German Mittelstand. These are some of the most innovative companies in Europe, with a long-term vision. They tend to have a high equity ratio and a cautious approach to expansion, but always undertake medium to long term investments, even in times of crisis.
Ninety-nine percent of businesses in Germany belong to this SME category, or 3.6 million businesses. They employ 15.5 million people, or 60% of the workforce, so they are essential to generate 52% of Germany’s GDP.
These companies are also heavily involved in the German vocational training system called Duale Aussbildung – a system in itself which is now exported to many countries around the world. The system implies a temporal and financial commitment of SMEs in vocational training for young people, both on the job and in training schools.
What do you think our SMEs could learn from their counterparts in Germany and vice versa?
To answer this, we must understand the differences in commercial methodology between the two countries: German companies are more structured, are moving forward step by step and remain cautious in their progress. New Zealand businesses are much more prepared to take a punt, lean out the window and see what might be around the corner, but might miss what’s happening down the road all the time. law.
I think New Zealand SMEs need to take a longer-term view, get involved in supporting vocational training for young people, and devote more money to research and development to take their smart inventions to the next level. . And German SMEs should maybe let go every now and then and adopt a certain New Zealand ‘I can do it’ attitude.
What are some of the trends you are seeing in terms of areas of growth in New Zealand-Germany trade relations, particularly at the SME level?
When it comes to new opportunities for German SMEs in New Zealand, it is certainly the construction sector that is attracting the most interest. Germany is an expert in energy efficiency and that translates quickly into construction products – and these are products that New Zealand needs to embrace.
On another note, I have read with increasing interest the articles on migrants and foreign investments. German companies have made substantial investments in New Zealand in recent years – mostly under the radar – and many Germans migrating or wishing to migrate to New Zealand have global experience, excellent training and money. Culturally New Zealanders and Germans are fine, but Germans still find it quite difficult to start in New Zealand.
What difficulties do they encounter?
On the business side, they find that they need to invest more in staff training and also consumer education, as they often start businesses in niche areas. Also, many of the people who come here will be looking for a job before starting a business, but even if they have global experience, they struggle to find a job without any previous experience in the New Zealand market.
What factors have you observed that contribute to the success of German entrepreneurs when setting up businesses here?
There are common factors. Usually they have come here on vacation – 78,000 German tourists come here every year now – and while they are here they have realized that New Zealand is more than beautiful scenery; they see some potential to explore a possible niche in the market. They are usually experts in their particular field in Germany and they have global experience in that market, and they put their knowledge to work for a niche market here in New Zealand.