BADEN - WÜRTTEMBERG - Economy
Innovatory, export-oriented businesses
Although it has a few multinationals, Baden-Württemberg's economy is basically dominated by small and medium-sized enterprises. Many enterprises are considered innovative. Although poor in workable natural resources (formerly lead, zinc, iron, silver, copper and salts) and still rural in many areas, the region is heavily industrialized.
In 2003, there were almost 8 800 manufacturing enterprises with more than 20 employees, but only 384 with more than 500. The latter category accounts for 43% of the 1.2 million persons employed in industry. Medium-sized businesses and a tradition of branching out into different industrial sectors have ensured specialization over a wide range.
A fifth of the "old" Federal Republic's industrial gross value added is generated by Baden-Württemberg. Turnover for manufacturing in 2003 exceeded 240 000 million, 43% of which came from exports. The region depends to some extent on global economic developments, though the great adaptability of the region's economy has generally helped it through crises.
Half of the employees in the manufacturing industry are in mechanical and electrical engineering and automobile construction. This is also where the largest enterprises are to be found. The importance of the precision mechanics industry also extends beyond the region's borders, as does that of the optical, clock making, toy, metallurgy and electronics industries. The textile industry, which formerly dominated much of the region, has now all but disappeared from Baden-Württemberg. Research and development (R&D) is funded jointly by the State and industry. In 2001, more than a fifth of the 100 000 or so persons working in R&D in the Federal Republic were located in Baden-Württemberg, most of them in the Stuttgart area.
From cuckoo clocks to laser technology
By 2003, agriculture and forestry were generating just 0.9% of gross value added. Mining and quarrying together employed around 5 000, most of them in the quarrying of natural stone, sand and aggregate.
Baden-Württemberg was, and still is, famous for its industrial products. Previously this meant clocks, cutlery, firearms and textiles. Now it is famous for high-tech products. Mechanical engineering heads the list with over 1 700 enterprises and 270 000 employees (in enterprises with more than 20 employees). This is followed by the automobile industry, including DaimlerChrysler, Porsche and Audi-NSU with 357 firms employing 240 000, then comes electronics, data processing, office equipment, precision engineering optics, including Bosch and ALCATEL, with 1 237 firms and almost 200 000 employees. Many other branches, including those with smaller turnovers, are famous for their high level of technical know-how. Emphasis on production has obviously led to under-representation in services. However, business services in particular are making increasing headway.
Labour costs and income very different
Labour costs for an employee in manufacturing in 2000 were, on average, €48 800. For every €100 direct remuneration, there were €75 overheads. In the services sector, the cost of an employee was over €40 300, overheads amounting to €72 for every €100 direct remuneration.
The earnings table for Baden-Württemberg in 2001 was headed by salaried entrepreneurs, company directors and directors with gross average monthly earnings of €5 786, followed by managers (€5 252 on average), electrical engineers (€4 845), and mechanical engineers and engineers in the automobile sector with gross monthly earnings of €4 839. At the lower end of the scale were unskilled workers (full time) with earnings of €2 028.
Higher and increasingly technology-oriented standard of living
Households have had refrigerators and washing machines for decades now, with ownership rates of 99% and 94% respectively, saturation point has long been reached. Household appliances that have not been on the market so long such as driers, microwaves and dishwashers are, by contrast, enjoying ever greater popularity. At the beginning of January 2003, four out of ten households had a drier, representing a fourfold ownership increase in 20 years. At the beginning of 2003, 60% of households had a microwave - almost twice as many as ten years ago. 63% of households had a dishwasher. Five years ago, the figure was 51%.
Over the past five years, ownership of consumer durables by households has shown further significant improvement. This is true of home entertainment electronics and electrical household goods, but mainly of information and communication devices. "In January 2003, Baden-Württemberg's 4.7 million households had 5 million mobile phones, 3.6 million PCs, laptops or notebooks, and 2.4 million Internet connections."
One striking development is the way older households with a main income earner of over 65 have very much caught up. Over the years, these households have got used to a certain technological level which they are keen to - and can - maintain. Whereas barely one older household in ten had a PC in 1998, by January 2003 the figure had risen to over one in five. The Internet is also increasingly popular with older households. Five years ago, hardly any such households had an Internet connection, Internet access or an ISDN connection (under 1 percent). By early 2003, by contrast, over 10% of such households were on-line.
The popularity of mobile phones with this age group has likewise soared. Whereas the share of such households in the region was just barely 3% in 1998, by 2003 this figure had risen to over a third.