Business Relations & Differences in Business Culture - PowerPoint PPT Presentation

German-Estonian Business Relations & Differences in Business Culture www.ahk-balt.org

Germany`s economic figures  Federal state since 1949, 16 federal states  Reunited since 3 October 1990  Area: 357,114 km2  Population: 81 million  Working pop: 42.6 million  Largest cities: Berlin (3.5 million), Hamburg (1.8 million), Munich (1.4 million) www.ahk-balt.org

Germany`s economic figures  GDP: EUR 2,737 billion  GDP per Capita: EUR 33,346  GDP by Sector: Services (incl. Trade) 70.6 %, Industry 28.6 %, Agriculture 0.8%  GDP Growth: 1.7 %  Inflation Rate: 0.8%  Unemployment: 6.8 % (2,95 million)  Average Salary: EUR 2,600  Exports of Goods: EUR 1,093 billion  Import of Goods: EUR 895 billion www.ahk-balt.org

Germany`s economic figures Economic Structure  Number of Companies: 3.66 million  Percentage of SME: 98.45 %  Total Turnover all Companies: EUR 5,800 billion  Total SME Turnover: 36.5%  Total Employees: 27 million  Number of Employees in SME: 80 % www.ahk-balt.org

Foreign Trade Volume Germany – Baltic States Germany`s Foreign Trade with the BalticStates 2013 (in Mio. EUR) Germ. Exports Germ. Imports Total Changes to Previous Year (in %) Estonia 1 443 560 2 003 +0,3 Latvia 1 466 742 2 208 +4,5 Lithuania 2 752 1 761 4 513 +8,0 www.ahk-balt.org

Foreign Trade Volume Germany – Baltic States Change in Mio. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 since EUR 2004 Exports 3 106 3 486 4 740 5 768 5 315 3 066 3 989 5 026 5 439 5 661 +82,3% Imports 1 578 1 500 1 700 2 132 2 076 1 831 2 522 2 896 2 994 3 063 +94,1% Saldo 1 528 1 986 3 740 3 636 3 239 1 235 1 467 2 130 2 445 2 598 www.ahk-balt.org

Germany as a business location offers...  high labour productivity  a first-class infrastructure  a high level of innovation  attractive pro-business policies  top quality of life www.ahk-balt.org

High labour productivity: high skill levels.  A highly skilled workforce: essential for top-tier productivity – with and without university education  400 universities and universities of applied sciences, including some of the world’s top universities for engineering subjects  Dual vocational training system for skilled trades: combination of theoretical and practical training  Close cooperation between vocational schools and business companies - minimizes hiring and on-the-job training costs  high labour productivity www.ahk-balt.org

High labour productivity: opinions from the business world  Germany’s level of training and process and product quality make it Europe’s No. 1 investment location for US companies (US Chamber of Commerce)  82% of foreign-company managers surveyed rate German workers’ skill levels as attractive (Ernst & Young, Germany as a Business Location)  Despite comparatively high wage costs, our German locations are among the most productive worldwide thanks to the workers’ outstanding skill levels and motivation.” (Rolls-Royce) www.ahk-balt.org

Privileged geographical location  At the heart of the EU, the world’s largest single market: a population of 500 million, GDP: 12,506 billion EUR  Germany is the economic centre of this market, accounting for 17% of the EU’s total population and 20% of its GDP  Close-knit network of road, rail and air connections to all neighbouring countries www.ahk-balt.org

First-class infrastructure  23 international airports, 22 seaports, 250 inland ports  231,000 km of roads (12,600 km interstate motorways “Autobahn”)  40,953 km rail network  8,127 km of inland waterways  robust and excellently maintained  German logistics companies are world market leaders  excellent transport services  Comprehensive, fast and reliable telecommunications infrastructure www.ahk-balt.org

Attractive pro-business policies  Corporate taxation reduced by nearly 10% in recent years  Flexible labour laws as result of comprehensive reforms; wide range of working time models possible  Autonomous wage bargaining in cooperation with trade unions helps maintain social peace (Germany loses comparatively few days to strikes on European average)  Flexibility and planning certainty for employers  job security for workers (increase in unemployment  during financial crisis: 3% - worldwide record low) www.ahk-balt.org

Attractive pro-business policies Germany’s national and regional governments offer a wide range of measures to support investment: Incentives + Investment Incentives Package Operational Incentives Package Interest-Reduced Labor-Related Cash Incentives Public Guarantees R&D Incentives Loans Incentives Investment KfW Loans State Recruitment Grants Grant (National Level) Investment State Development Combined Training Support Loans Allowance 1 Bank Loans State/ Federal Silent / Direct 1 New federal states only Wage Subsidies Partnership Source: GTAI www.ahk-balt.org 13

Top quality of life  Important factor in attracting and retaining highly skilled employees  Surveyed foreign managers rate quality of life as Germany’s greatest strength: 87% in agreement (Ernst & Young)  High-quality, dependable public infrastructure and utilities  Wide range of leisure activities available thanks to flourishing community life: e.g. 26,000 football clubs and 646 golf courses  Attractive recreational facilities: low mountain ranges, Alps, 2,389 km of coastline and 125 nature reserves and national parks  Lively cultural scene: 80 opera houses, 550 festivals and 5,600 museums www.ahk-balt.org

How foreign investors view Germany’s future  54% expect Germany to become even more attractive to investors over the next three years  They foresee its becoming increasingly attractive for innovation activities, companies and highly skilled talent  How investors see Germany in the year 2020:  Global leadership in environmental technology  Centre for research and development www.ahk-balt.org

About Germans  Open minded and enterprising business community.  Trustworthy and reliable.  Structured and innovative.  Conservative and always on the look out to eradicate bottlenecks.  Concrete in discussions with reliable partners only. Focused on end results. No room for loose talks. www.ahk-balt.org

Developing business relations with Germans  Firstly, Germans need to be confident that the product/service/ideas offered will sustain the German quality standards/expectations.  The are looking for a reliable partner/company/environment to establish business.  Business cannot be established after 1st meeting/visit in Germany. One has to be patient and follow up regularly to achieve desired results.  Germans scrutinize any new idea/concept very carefully and might take a while before they are convinced. www.ahk-balt.org

Differences in Business Culture – Good to know  How old is the society?  Scandinavian? Cold? „Kalli kalli musi musi“  Patriotism?  Singing?  Where are similarities?  Law? Food? Clothes? Nature? Family? www.ahk-balt.org

“Germans vs Estonians”  Like innovation?  Like security?  Are fast decision makers?  Think in hierarchies?  Like control?  Dislike rules and regulations? www.ahk-balt.org

Some Business Basics for Germany  Where are you going – how to dress?  Meeting, Evening…  Timing?  Using your mobile devices?  Small talk…  First names?  Business cards or electronic features?  Style of correspondence? www.ahk-balt.org

There are no rights and wrongs But there are differences Just be aware of them  www.ahk-balt.org

Welcome to Germany Let us help you get your business booming there! Maren Diale-Schellschmidt, CEO, AHK Baltic States maren.diale@ahk-balt.org, tel: 6276940 www.ahk-balt.org