One important component of this is the German Fraunhofer institutes. These were first established in 1948 to rebuild the German corporate sector. They have now grown to total 72 in number, covering all sectors and regions across Germany. Collectively, they employ almost 25,000 people and help around 6,000-8,000 companies each year, large and small. 47  They have an annual budget of a little under 0.1% of German GDP. A second piece of infrastructure supporting German business is the so-called Steinbeis system. This was created in 1971. It is a network of technical professionals whose skills, experience and know-how can be drawn on by companies across Germany, operating through around 1,000 Steinbeis Enterprises. It currently has around 6,000 professionals in the network. Over 2,000 businesses have been founded on the back of the Steinbeis platform. A third layer of the institutional cake in Germany is the financing of companies. This itself has three layers: the Sparkassen, operating locally and largely financing local businesses; the Landesbanken, operating regionally and typically serving somewhat larger companies; and KfW, Germany’s national development bank, typically serving large companies. Often, representatives from these organisations will have a role in the governance of German businesses.
31  All speeches are available online at www.bankofengland.co.uk/speeches  31  Table 1: Growth in the firm-level productivity distribution (aggregate, by region and by sector)  Aggregate  Annualised growth in average firm-productivity between 2004 and 2014 Top 0.1% Top 1% 12% 8%  99% of firms 1%  Region North East North West Yorkshire & Humberside East Midlands West Midlands East of England London South East South West Wales Scotland  7% 6% 12% 30% 19% 16% 9% 11% 23% 0% 13%  5% 4% 3% 15% 10% 8% 8% 6% 12% 4% 7%  0% 0% -1% 1% 0% 0% 2% 1% 1% 1% 0%  Sector Manufacturing Electricity Water Construction Wholesale trade Transportation and storage Information and communication Real estate activities Professional, scientific and technical activities Administrative and support service activities Education Health Arts and entertainment Other services  12% -10% 25% 14% 4% 41% 32% 5% 9% 25% 20% 17% 9% 10%  7% -14% 8% 8% 4% 28% 18% 3% 6% 14% 13% 7% 4% 0%  -1% -13% 1% -2% 0% -1% 3% -1% 4% 4% 0% 2% -5% -5%  Sources: ONS Research Database and Bank calculations. Note: Data refer to non-financial business sector. Calculations over the ten-year period in question are only possible for firms that exist for entire decade period and sampled throughout; these are likely to be larger firms.