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Economic Environment of the Country

Neel Patel

BUA 3345

Meghan Wright

October 18, 2020

Economic Environment of the Country

Germany

Economic growth

Germany is said to be the world’s twenty-seventh major economies by holding the major growth rates throughout the recession and financial crisis. Germany remains the European Union’s most diplomatically and economically powerful member nation. The recorded economic growth rate or GDP rate of Germany in 2019 was about 0.57 percent that was a one percent increase from the previous fiscal year. The economy of Germany remains determined through the business sector or government spending, their economy takes advantage of the car manufacturing industry. In 2019, Germany’s GDP strained at about four billion universal dollars, the maximum GDP the country has informed in years. It is projected to grow in the direction of five billion by 2021. Germany has the fourth-largest GDP in the domain, afterward the United States, China, and Japan.

Inflation rates

The inflation rate is considered using the price growth of a definite product carrier. This product carrier comprises products and services, on which the usual customer spends money all over the year. The inflation rate of Germany was recorded at 1.35 percent in 2019 that was a 0.6 % decline from 2018, and the future forecasts show that the inflation rate to expected to drop to 1.03 percent in 2020 and will increase again in 2021 to 1.18 percent respectively. The highest recorded inflation rate in the history of German history is 5.05 percent in 1992 because of recession and financial crisis. In Germany, the inflation rates are the responsibility of the European Central Bank, Central investors like low, constant inflation since this is a symbol of a rising economy (Statista, 2020).

Unemployment policy

The employment rate in Germany dropped to 0.1 percent in July 2020 and become constant at 6.4 percent in August 2020. The percentage of underemployed individuals in Germany remained constant, about 2.2 million individuals Germans are underemployed. The unemployment rate in Germany was pretty low, it was recorded at 3.04 percent in 2019 and was still dropping. In comparison with the Federal Statistical Office, about 4.6 million Germans are currently underemployed, and the rate is still dropping due to the Coronavirus pandemic (Destatis, 2020). This administration also reported that the rate of unemployment was rising at a high rate and currently about 1.5 million Germans are unemployed. Youth employment Germany has proposed that the unemployment rate of Germany will be squeezed negatively due to the Coronavirus disease in 2020 but it is projected to rise by 7.0 percent in 2021 and drop to 6.0 percent in 2022.

Interest rates and monetary policies

The interest rates in Germany are the rate that is formulated by the European Central Bank every month. This rate is charged on loans taken from the banks or other financial institutions, and these rates significantly impact the price of any financial product. Currently, the interest rate in Germany is 0.52 percent that is considered high as compared to the previous interest rates in the German economy as in 2019 the interest rate was 0.30 percent, and in 2018 it was about 0.19 percent. The highest interest rate in the German interest rate history is recorded at 4.75 percent in 2000.

The European Central Bank of Germany is also responsible for framing and applying the monetary policy in the country, the Bundesbank’s core business area is monetary policy. The monetary policy of Germany includes the revision of interest on loans demanded by the financial banks in the fiscal market. Other rates in the German economy are inclined by interest rates or monetary policy. The monetary policies of Germany are designed for the stability of the currency, for maintenance of full employment, and the economic wealth and wellbeing of the individuals of Germany (Heritage, 2020).

References

Destatis. (2020). The unemployment rate in Germany. Short-term indicators. Retrieved from https://www.destatis.de/EN/Themes/Economy/Short-Term-Indicators/Labour-Market/arb210a.html

Heritage. (2020). Germany’s economic freedom. Retrieved from https://www.heritage.org/index/country/germany

Statista. (2020). Germany: Inflation rate from 1984 to 2021. Retrieved from https://www.statista.com/statistics/375207/inflation-rate-in-germany/

Patel 2

Neel Patel

BUA 3345

Meghan Wright

September 4, 2020

Country Selection

Germany is the country I have chosen, and this is because the country is unique and this will let me have further insight into the details of how organized, well planned and high level of perfectionism when it comes to doing business. Germany also has relative mountains and forested hills on the central and the southern regions. In the north, the scenery flattens out to an extensive plain that bounces to the North Sea (Borisova et al., par. 4). Additionally, Germany enjoys a high level of diversity in a credible way. The German currency is Euro since 2002; this is the same currency for other 18 currency countries.

Germany is the fourth-largest economy in Europe, being the second biggest exporter and third-largest importer. Technological factors in Germany are taken seriously. Germany houses independent laboratories that have significant elements in business (Borisova et al., par. 5). The country is very advanced, and the state spends so much on research and development. Businesses are becoming better due to technology, which improves the profits for the business people. The country has a population of about 82 million residents, making it the largest country in terms of population in the European Union. Society has diverse ethnicities making it a haven for business activities.

Given the different factors described above, Germany has vast opportunities when it comes to location, technological improvement, and social factors that make the country a good business location (Borisova et al., par. 5). Additionally, the country’s population offers a rare opportunity when it comes to doing business. I strongly believe that it is a good place to venture into to achieve the objectives successfully.

Works Cited

Borisova, A. A., et al. “Economy Digitalization in Germany and Russia: Ethical Aspect.” Russian Conference on Digital Economy and Knowledge Management (RuDEcK 2020). Atlantis Press, 2020. Para 4-7

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Socio-CulturalEnvironment

Neel Patel

BUA 3345

Meghan Wright

October 30, 2020

Society and culture have an indirect but critical influence on every area of international business firms. These factors determine such companies’ business management in production, marketing, creation of overseas’ managerial patterns, corporate success, or flaws. In this regard, multinational firms planning to invest in Germany need to understand its business environment and the associated factors before making such a critical decision (Masovic, 2018). While adequate information about these factors could help optimize corporate performance, inadequate orientation could result in severe operational challenges. The fact that the country’s business spirit or career attitudes, education patterns, income distribution, and demographics influence corporate performance means understanding these patterns could help optimize performance and bottom line.

German’s income distribution patterns embody a widening gap between the poor and the rich. Most of the country’s income goes to wealthy people (mostly in the east) as more significant income groups gain optimum capital and business revenue (DW, 2019). The latest tax regulations allow the wealthy to gain from top tax rate reductions or the change the inheritance tax as the underprivileged (mostly in the west) witness additional challenges from the higher indirect taxes. Likewise, Germany’s poverty gap is 60% of the average household income (DW, 2019). By 2016, its monthly and annual median payments were $1,909 and $22,900 after tax deductions. Here, the poor’s monthly earning was $912 or less, while the rich workers’ monthly income was $3,191 or more. Although its income disparity rate has slowed down, lower-income employees face severe challenges than permanent and middle-class employees.

By 2018, Germany had 83.1 million residents, with most of these people leading a high standard of living than other European nations and how citizen’s liberties influence their lives. The country’s population thrives in pluralism and ethno-cultural diversity. In this setting, the recent implementation of laws has paved the way for flexible gender roles and more opportunities for people with disabilities. These laws have also promoted equal rights for various sexual orientations. Germany has 20.8 migrants, with recent laws opening doors for more international professionals to access this country (DW, 2019). Today, this country’s birth rate stands at 1.6 children for every woman, with life expectancy increasing to 81 years. However, German’s 2060 population could reduce with the reduction of immigrants to a 67.6million. This country is currently witnessing a surging number of the elderly population, resulting in hurdles in the social welfare system.

On the other hand, most Germans’ mindset or attitude or perception towards self-employment seems robust since the late 1990s. As a result, private businesses generated employment for more than 4.4 million people in 2012, increasing beyond imagination. However, women make up the minority in self-employment. Compared to other European countries like Singapore, Germany has a negative mindset about entrepreneurship. More so, an analysis of start-up social values and attitudes shows that German has no primary advantage among the 22 industrialized counties in the world (Bittorf, 2012). The country’s failed business start-ups originated from the previous socioeconomic and political conflicts, which saw the ceasing of its social status. Nevertheless, the lack of stigmatization due to failed entrepreneur start-up means developing a proper mindset for vigorous entrepreneur activities in the region.

German’s education system focuses on the humanist tradition, which integrates business culture in its curriculum. This country’s massive investment in the education sector has exposed students between 15 and 16 years to several hours of employment-driven sessions (Masovic, 2018). These students spend more of their time to gain knowledge and skills than how they learn in schools. As a result, this work orientation prepares such students for permanent future work opportunities. More so, German lawmakers have been championing financial and economic education in secondary education to allow easy practicing of such critical business concepts. Therefore, this education system could enable students to develop their intellectual and psychological capacities for future work opportunities.

References

Bittorf, M. (2013). Focus on economics. KFW Economic Research, December 19. https://www.kfw.de/PDF/Download-Center/Konzernthemen/Research/PDF-Dokumente-Fokus-Volkswirtschaft/Fokus-englische-Dateien/Fokus-Nr.-39-Dezember-2013_EN

DW (2019). German income inequality a cause for concern as the east-west divide deepens. DW Made for Minds, April 24. https://www.dw.com/en/german-income-inequality-a-cause-for-concern-as-east-west-divide-deepens/a-48465438

Masovic, A. (2018). Socio-cultural factors and their impact on the performance of multinational companies. Integrated Business Forum, March 19. http://www.ecoforumjournal.ro/index.php/eco/article/view/729

Running head: GERMANY 1

GERMANY 4

Germany history, languages and topography

Neel Patel

BUA 3345

Meghan Wright

September 18, 2020

Germany history, languages and topography

Germany, often called the Federal Republic of Germany, is a nation located in the central and in Western Europe and covers an area of approximately 357022 square kilometers. The government lies between the Baltic and the northern seas and the Alsip’s in the southern. Denmark, Poland, Czech Republic, Switzerland, France, Luxembourg, Austria, Belgium, and the Netherlands are the adjoining countries to Germany (Kästle, n.d.). Germany’s long history is characterized by disunity as was the case in medieval Germany as it was marked by endless series of wars amidst the local rulers, and the peace of Westphalia in 1648 further divided the nation into more than a hundred states with Prussia and austral being dominant. Despite these political upheavals, German unification was realized in 1871 following the Franco-Prussian wars transforming the nation into an empire. The victors of world wars imposed punitive conditions against Germany, such as loss of territory, fiscal reparations, and diminished military (Molnar & Zakic, 2020).

The official language spoken in Germany is the German language, which is embraced by more than 95% of the population as they talk about the language as their first language. Some of the minority tongues spoken in Germany comprise Sorbian in the eastern parts of the nation and North Frisian vocalized in the Nordfriesland by at least 100000 people who also speak the German language. There are multiple immigrant languages spoken in the country, including Turkish, Tamil, Kurdish, Russian, Arabic, and Greek (Molnar & Zakic, 2020). Most Germans have taught English as the second language, and in some cases, the French and Latin are taught first. Other languages like Dutch, Polish, Italian, and others are taught n schools based on the locations.

The topography of d Germany is greatly varied as the Baltic coast areas are sandy, comprises of dunes and small hills. The areas adjacent to the cost are forested wit ridges and are characterized by numerous lakes such as Mecklenburg lake plateu.as one approaches places lake Berlin, the topography is less mountainous. The southern limits of the lowland regions are characterized by wider zones of productive loess, extending from Magdeburg to the highland in the south (“Topography – Germany – located, area,” n.d.). Regions such as the Herz Mountains are densely wooded Thuringian forests with the Ore Mountains rising to more than 1214 meters above sea level. There are groups of mountains and plateaus with the ode Wald mountains Rising 1500in altitude, the highest peak, and the Feldberg, which are a1493 and 4898 ft. forms the more significant parts of southern Germany. All of Germany is drained by rivers that flow into the North Sea.

References

Kästle, K. (n.d.). Short history of Germany – Nations online project. Retrieved from https://www.nationsonline.org/oneworld/History/Germany-history.htm

Molnar, C., & Zakic, M. (2020). German-Balkan entangled histories in the twentieth century. Russian and East European Stud.

Topography – Germany – located, area. (n.d.). Retrieved from https://www.nationsencyclopedia.com/Europe/Germany-TOPOGRAPHY.html

Running head:

Technological environment

1

Technological environment 2

Technological environment

Neel Patel

BUA 3345

November 13, 2020

Government research spending in Germany

As Germany well knows, it spends much of its revenue on research and emphasizes higher education. Research and technology excellence can be attributed to specific strategies and initiatives to ensure that they continue in the field so that the solution can be found with a lot of ease.

The federal government and the state government finance these support institutional funding. This is where the finance then directly: project funding. Direct projects are funded at this stage, and allocation is made to concrete and implements the programs (Powell and Dusdal 2017). The government does so because these projects are beneficial to all: departmental research. At this stage, the ministry involves plays a unique role that is in funding science and research.

The Germany states and the municipalities act as the bodies involved in the funding and other supporting institution of operation. The two bodies cover a comprehensive range of the research area in Germany.

New invention and development in Germany

The invention is coming up with a new idea of something that has never been put in place or has never existed. Different people have different ideas, objects, processes, or techniques that they discover at different times. Germany is well known as the home of inventors, engineers, and discoverers who have contributed significantly to the modern development of different equipment that is in existence.

Development is the act of making or advancing something to a more useful tool. Germany has some significant development in different fields of invention. In a nutshell, some advancements in some areas can be termed as development. Below are some of the new

In recent years, inventions in Germany are as follows; Thermos flask, wall plugs, spaghetti ice cream, a power drill, and toothpaste (Skerra,2018). Germany is attributed to other more inventions that brought changes to the human way of life.

Energy use and costs in Germanyy

The price of energy in Germanyy is usually high in Europe. Energy is expensive in Germanyy is caused by the country’s transition from atomic energy and fossil fuel to the renewable energy source. Therefore, the changes in energy used in Germanyy are associated with the steep price, which is usually funded by companies in Germanyy as well as citizens (Kaltenegger, Löschel, Baikowski, and Lingens 2017). Even though the price of energy is high, customers still continue to support the country’s energy transmission. Therefore, in Germanyy, the average price of energy in small businesses, as well as households in an hour, is 30.43 cents per kilowatt.

Changes in internet usage in Germanyy

In Germanyy, the number of individuals using the internet keeps increasing. Living a life without the internet is unthinkable in modern life. Individuals in Germanyy can easily access the internet through mobile phones. Individuals who mostly use the internet in Germanyy are below the age of seventy.

Before more males were using the internet than females, this has recently changed because females use the internet more than males in Germanyy. Additionally, the number of individuals who use the internet more frequently or daily keeps increasing (Huxhold, Hees, and Webster 2020). On the other hand, internet use in Germanyy is dependent on where an individual resides. Therefore, when the population is high in urban areas, the number of internet users goes higher.

Reference

Huxhold, O., Hees, E., & Webster, N. J. (2020). Towards bridging the grey digital divide: changes in internet access and its predictors from 2002 to 2014 in Germanyy. European Journal of Ageing, 1-10.

Kaltenegger, O., Löschel, A., Baikowski, M., & Lingens, J. (2017). Energy costs in Germanyy and Europe: An assessment based on a (total real unit) energy cost accounting framework. Energy policy, 104, 419-430.

Powell, J. J., & Dusdal, J. (2017). The European center of science productivity: Research universities and institutes in France, Germanyy, and the United Kingdom. In The Century of Science. Emerald Publishing Limited.

Skerra, C. (2018). Human Creativity and Invention: Exploring the stimuli of the invention within the Germany Makers Community (Doctoral dissertation, University of Gloucestershire).

Running Head: POLITICAL ENVIRONMENT OF GERMANY 1

POLITICAL ENVIRONMENT OF GERMANY 1

Political Environment of Germany

Neel Patel

BUA 3345

Meghan Wright

October 2, 2020

According to the most recent survey that was sourced from the World Bank in the year 2020, the political stability of Germany was estimated to be at 0.60. This figure was laid down based on the World Bank collection of development indicator. The data was compiled from various source ranging from historical data, projections, estimate data, and actual values, all of which were sourced from the World Bank in the month of September 2020. Political stability including the absence of terrorism and violence has been used to measure Germany’s likelihood of political instability and/or violence that is motivated by politics inclusive of terrorist activities. It is evident that Germany has not witnessed a coup from the year. Owing to this, at least 80% of the German citizens consider national stability as one of their strengths.

Like the majority of the western countries, the tax system in Germany is designed in a way that every individual is expected to pay their income tax throughout the year. This is made possible because the employer deducts tax from the paychecks of every employee. In the event of possible over or under payments, the employers make necessary adjustments at the end of the year. Like most of the countries, Germany paves way for a number of deductions which can lower the taxable income. As such, deductions are granted specifically for individuals with children under the age of 18 years of age or those which children who are barely 27 years of age but are still enrolled in school without earnings (Dudášová, 2017). Furthermore, deductions are made to individuals under the following conditions; if they fall under four social programs that include health insurance, unemployment, long-term nursing care, and retirement.

Contract enforcement laws is a contributing aspect in the political environment of Germany. In fact, the contract enforcement law in Germany is considered as the most important aspect for businesses or organizations that go into business with other organizations. In Germany, the contract enforcement laws are set in place to ensure that employees are guaranteed to the right to enter into agreement with their employers. Employees in Germany have the power to enter into any contract whatsoever as long as they do not breach any other law that is related to the object of the contract whether oral or written. However, it is worth pointing out that the most common employment contract in Germany is written and not oral. It is worth noting that the contract employment laws in Germany are majorly based n individual employment contracts, Federal Legislations, bargaining agreements, and works council agreements. “Many labor and employment law matters are heavily influenced by case law so that judicial precedent is an important part of the legal framework.” (Siri, 2018)

Lastly, the employment laws in Germany often apply only to independent employee considering that the term “employment” has traditionally barely been defined by the laws of the country. Employees residing in Germany often practice employment agreement in writing even though it is not mandatory according to the employment laws. Nonetheless, the employer is expected to lay down the terms and conditions of the employment not more than 30 days after the commencement of the employment relationship. Also, the country’s employment laws clearly state the conditions of employment including the minimum wage, and employee vacation.

References

Dudášová, M. (2017). Alternative for Germany—more than a fleeting phenomenon. Society and Economy, 39(3), 429-449.

Siri, J. (2018). The alternative for Germany after the 2017 election. German Politics, 27(1), 141-145.