CED Insights and Inspiration from the German Economy

May 2, 2014

Are you ever wondering “what if our economy was guided by the key community economic development (CED) principles?” And “why has the German economy emerged as the leading economy in Europe?” Here’s an excerpt of an article (http://www.arton.co/eurozone.html) that might provide some insights and new inspiration to keep the focus on CED.

~ Walter Hossli

“Industrially, the regional focus of the Landesbanken again played a major role in the creation of yet another German “Economic Miracle”, in particular through the provision of secure on-going finance to the German “Mittelstand” (small and medium-sized companies) in their respective regions. Nor should their power be underestimated. With 3 million mid-sized businesses the Mittelstand industries employ more than 70% of German workers and contribute roughly half the country’s GDP.

Klaas Hubner, a former member of the German Parliament and himself owner of a Mittelstand company observes that mixing social democratic values with localism is a major element in Germany’s sustained economic success. “What we have here is stakeholder capitalism, not shareholder capitalism,” he says. And like most Mittelstand owners, he adds: “I live where my company is located. I want a good image in the town I live in.” The Mittelstand remains blissfully immune to the many pressures that share-price-oriented financial markets inflict on their American counterparts. “We don’t have short-term strategies, only long-term strategies,” says Hubner.

Mittelstand companies are not publicly traded, and they benefit from an extensive system of vocational education and a sector of municipally owned savings banks that work solely with local businesses. Roughly two-thirds of German small and mid-size businesses get their loans from these banks. “Our banks are restricted to doing business in their regions; they have to concentrate on the real economy.”

Walter Hossli has been Executive Director of Momentum since it was founded in 1991. Under his leadership, Momentum has won the Community Achievement Award from the City of Calgary, been recognized by the Tides Canada Foundation, by Charity Intelligence as one of the most effective organizations in Calgary and named one of Alberta’s top 50 employers. Walter is a founding board member of CCEDNet, and he helped establish Vibrant Communities Calgary, an organization dedicated to fighting poverty.

Read other stories gathered to celebrate CCEDNet’s 15th anniversary >>