Eckart Helfferich & Sabine Wendel: A healthy stock of medium-sized companies guarantees prosperity

Medium-sized companies are a mainstay of the economy in Rhineland-Pala­t­­­inate. The structures of Rhineland-Pala­­­t­­­inate’s economy are characterised by a large number of medium-sized companies more than almost any other state. Small and medium-sized trade, service and industrial companies and freelancers shape the business landscape in a diverse range of ways. They play a key role in the maintenance and promotion of competition, supporting structural change and developing employment.

Rhineland-Palatinate is home to over 183,000 medium-sized companies (those with fewer than 250 employees). These companies provide jobs subject to social insurance contributions to over 730,000 people, or around 72 per cent of all jobs of this kind in the corporate sector in Rhineland-Palatinate. Around a third of those work in the service sector. Trade and the production industry each account for around a fifth of the workforce. Em­­ployment in comparably smaller economic sectors includes the information and communication economy, transport and logistics, tourism, agriculture and wine-growing, although these sectors may also be of much higher significance in the regional economies of individual regions.

Based on turnover criteria (up to 50 million euros), 99.7 per cent of companies in Rhineland-Palatinate are medium-sized. At around 45 per cent, they generate al­­most half of the turnover from commercial enterprises in Rhineland-Palatinate. This puts Rhineland-Palatinate in first place, before all other states.

Strong medium-sized companies: trade alone accounts for a fifth of the workforce.

Strong medium-sized companies: trade alone accounts for a fifth of the workforce.

Based on turnover criteria (up to 50 million euros), 99.7 per cent of companies in Rhineland-Palatinate are medium-sized. At around 45 per cent, they generate al­­most half of the turnover from commercial enterprises in Rhineland-Palatinate. This puts Rhineland-Palatinate in first place, before all other states.

Rhineland-Palatinate’s companies see their state as the state of medium-sized companies. This was reported in the “Me­­­dium­­­-­sized companies barometer 2012”, compiled by the auditing and consultancy company Ernst & Young. 174 medium-sized companies in Rhineland-Palatinate were surveyed; 96 per cent of respondents considered the regional conditions for their company good or quite good. This result is significantly higher than in the previous year (85 per cent) and thus higher than in any other state. In the state ranking, which is based on a calcu­­l­­ated average, Rhineland-Palatinate’s po­­sition has improved compared with the previous year, rising from seventh to fifth place. Companies in Rhineland-Pala­­t­­inate are currently more satisfied than in the previous year in all policy areas investigated (infrastructure, education, medium-sized companies, promotion po­l­­­­­icy).Rhineland-Palatinate held positions in the top half of the table in each of these areas.

Medium-sized companies secure the next generation. As a key engine behind the economy in Rhineland-Palatinate, medium-sized companies also ensure training for the next generation. Medium-­­sized companies take their responsibility to society very seriously. Among other things, they offer young people qualified professional apprenticeships and thus prospects for the future. Given the increasing difficulty of finding suitable specialist staff, education and further training are very important. With al­­most 30,000 new apprenticeship contracts signed every year, the number of ap­­prenticeships is remaining constant at a high level. The largest numbers of ap­­­prenticeships are in the commercial and trade sectors, as well as the trades.

Medium-sized companies controller. Me­­dium-­­sized companies form the backbone of our economy and make a crucial con­­­tribution to the stability of our state and to securing jobs and apprenticeships. It was therefore important to the state government to provide medium-sized com­­panies with an additional, direct point of contact for matters which concerned them. This was achieved by naming a “me­­­dium-sized companies controller”. This in­­stitution was founded in 2006. Since September 2009, the state government have been the authors of the “medium-sized companies controller”. Its main roles include communication, mediation and con­­sultancy. The medium-sized companies controller negotiates between medium-­­sized companies (SMEs) and the state govern­ment, administration, chambers, associations and banks. In addition, it provides SMEs with advice in all questions concerning the commercial economy – including financing, restructuring, succes­­sion, securing specialist staff, communication with banks, business plans and relocation. The medium-sized com­­­panies controller works together with chambers of industry, trade and commerce, associations, regional economic promotion in­­­­stitutions and district ad­­ministrations, as well as the Investitions- und Struktur­bank Rheinland-Pfalz GmbH (ISB), and raises the state government’s awareness of matters affecting medium-­sized companies.

The following example demonstrates a typical issue affecting medium-sized com­­­­­panies and what the medium-sized companies controller does: a small high-­­tech company suddenly loses a strategically important investor. This puts the company in economic difficulties, so it contacts the medium-sized companies controller. A face-to-face meeting is called, the controller visits the company on site and analyses its financial situation. His re­­commendation: an ISB loan. The me­dium-­­­­­sized company controller has helped the company down this road. It is now in a good position to face the future once again.

Since the establishment of the controller, over 600 medium-sized companies have already contacted him with their problems. Its function as a staff unit in the Ministry of Economic Affairs guarantees close contact with political decision-makers, while the name medium-sized companies controller also implies work across multiple departments. The me­­­dium-sized com­­­panies controller offers its services to companies in Rhineland-Palatinate free of charge and in complete confidentially.

Helfferich-und-Wendel004-Kopie_hBorn in 1941, the author’s positions in­­cluded head of controlling at G.M. Pfaff AG, commercial director in the furniture industry in Regens­­burg, CFO of Kulmbacher Spinnerei as well as managing director of Verlagsgruppe Rhein-Main from 1986. Today, he is managing director of Artja Consult GmbH in Stadecken-Elsheim, although his role as medium-sized companies controller means that he has not been actively in­­­­­­­volved since 2009.
Helfferich-und-Wendel004-KopieBorn in 1983, the author studied admin­­istrative studies in Bavaria. Following gradu­­­­ation, her first role was at the district government of Mittelfranken, before she switched to the Ministry of Eco­­no­­mic Affairs in Mainz in 2007. There she supported various sectors in the industry department until 2009. She has led the medium-­­sized companies controller staff unit since September 2009.