Landeskreditbank Baden-Württemberg - L-Bank

ECONOMY
General
Germany
The economy of Baden-Württemberg, as a state of Germany, must be considered in the context of the
German economy as a whole. Germany’s economic system has developed since 1945 into what has come to be
called the soziale Marktwirtschaft, generally understood to mean a socially-conscious market economy,
combining the free initiative of the individual with social principles. The German Constitution guaranties
freedom of private enterprise and private property. The state mainly has an administrative function in the market
economy, setting the general framework of conditions within which market processes take place. In Germany,
there is almost no state intervention in price and wage competition.
The German economy is one of the largest in the world. Compared with its international rank as an
industrialized nation, Germany is relatively poor in raw material resources. It depends largely on imports for its
raw material needs. This foreign dependence is particularly significant in minerals such as copper, bauxite,
manganese, titanium, rock phosphate, tungsten and tin. Germany currently imports nearly two-thirds of its energy
requirements, including virtually all of its oil and a significant portion of its natural gas, as well as all of the
enriched uranium needed for nuclear energy.
Exports and imports of goods and services contributing to the GDP (at current prices) since 2001 have
developed as follows:
Contribution of Exports and Imports of Goods and Services to GDP* in Germany
2004 2003 2002 2001
(in %)
Exports/GDP .......................................................... 39.7 37.3 36.6 35.2
Imports/GDP .......................................................... 34.0 32.7 31.4 31.9
* Date of computation of GDP: August 2004 and January 2005.
Source: Own calculations, based on: German Central Bank, Monthly Report, November 2004, Table IX. 1 and
February 2005, Table IX. 1.
Baden-Württemberg
Baden-Württemberg is one of the most highly industrialized states in Germany and has one of the strongest
economies of all the German states. In terms of GDP and employment, approximately one-half of Baden-
Württemberg’s economy is based on the activities of small and medium-sized commercial enterprises, many of
which are involved in manufacturing and focused on technology, and the other half consists of large industry.
Several well-known companies are located in Baden-Württemberg, such as DaimlerChrysler AG, Porsche AG,
Robert Bosch GmbH, IBM Germany, Asea Brown Boveri Germany and Hewlett-Packard Germany. This strong
concentration of manufacturing activity exposes the economy of Baden-Württemberg to a degree of cyclical
pressure. In addition to manufacturing enterprises, many universities and research institutions also support the
Baden-Württemberg economy.
49