Basics 2/6: A widespread economy

In many European countries the economy is concentrated around a few dominant business hubs. In Germany, it is the other way round. Companies are widespread throughout the country and are surrounding numerous regional hubs. Decentralisation is also a phenomenon you will often find when doing business with German retail chains.

Germany is highly urbanized and the wide spread of enterprises is mirrored in the wide spread of cities. In 2016, Germany counted 77 cities with more than 100,000 inhabitants. Only four of them had more than one million out of the total population of 81 million: Berlin, Hamburg, Munich and Cologne.1

Decentralized structure of Germany´s economy.

1. Berlin – 3,574,830
2. Hamburg – 1,810,438
3. Munich – 1,464,301
4. Cologne – 1,075,935

With industry centers and large cities widely spread all over the country, Germany started developing nationally organized networks early. Most companies are a committed part of an industry organization, and it is compulsory to be a member of the regional Chamber of Commerce. The German government noticed the importance of networks and clusters early on and has provided strategic support to them since their beginning. Today, Germany is regarded as one of the pioneering nations when it comes to cluster development and the power of the German economy is closely linked to its well-developed clusters.

About the author: Mark Pfeiffer is a German based retail professional, piloting nonfood consumer goods of international companies into German retail.

1 German Federal Statistics Office: Städte (Gemeinden mit Stadtrecht) nach Fläche, Bevölkerung und Bevölkerungsdichte, 2016

Photo: Mark Pfeiffer