Education shortfalls

Why German Schools Are Failing Business

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When I grow up I want to be a... tax consultant.
  • Why it matters

    Why it matters

    German pupils are increasingly entering the workplace without the requisite life and business skills.

  • Facts

    Facts

    • A 2013 survey found that “a significant share of Germans do not have even a minimal knowledge of economics.”
    • Some 80 percent of German adults wish they had learned more about business studies.
    • Secondary schools often dilute business studies by mixing it with other loosely realted subjects.
  • Audio

    Audio

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At the end of the business day, the two bosses of Colorful Office turn to their workers to find out how things went. “Were there problems in any of the divisions today?” “What was achieved?”

The workforce, which produces greeting cards and other gift items, reports back. The bookkeeper completed bank transfers, colleagues in purchasing bought new porcelain pegs for a new product line and marketing designed an advertising poster and posted it on Facebook. The bosses are satisfied.

So, too, is Anne Eickelkamp. A teacher at a comprehensive school in Rastede, Lower Saxony, she is the real boss of Colorful Office. Her students have created and run the company.

In addition to business studies, a majority of all ninth graders at the school spend four hours per week working in one of six classroom-based companies. The 30-year-old Ms. Eickelkamp is supporting the young people, who are working with real money and whose firm, which applies standard business practices, is even making a profit.

Ms. Eickelkamp is convinced that “business studies prepares one for life.”

If that’s the case, many young people in Germany are poorly prepared for life at the moment. Lower Saxony is one of the few federal states to offer a course in business studies. In a country that has become one of the world’s master exporters, business rarely features in schools.

“We need the subject so that students in today’s age can make rational decisions in daily life.”

Jürgen Häckert, Director of Helene-Lange pre-vocational school, Essen

Germany has several types of secondary education: high schools preparing pupils for vocational careers, comprehensives for intermediate pupils and grammar schools for pre-university students. But most students never learn about personal finance, let alone supply and demand, purchasing decisions, globalization or regional labor markets.

A student called Naina from the city of Cologne neatly summed up the situation in a tweet at the beginning of the year: “I am almost 18 and have no idea about taxes, rent or insurance. But I can analyze a poem. In four languages.”

And it isn’t just students who do not understand this important part of day-to-day life. Gerd Gigerenzer, an education expert at the Max Planck Institute in Berlin, noted in a survey in 2013 that “a significant share of Germans do not have even a minimal knowledge of economics.” The proportion had increased in comparison with the first test in 2010.

Many fail in answering questions such as this one: If one takes out a loan for €3,000, with 12 percent interest per year, and pays off €30 per month, when is the debt settled? Less than 30 percent of those surveyed correctly answered that the loan would never to paid off.

Another survey of young people by the association of German banks made similar findings. In it, six of 10 people aged between 14 and 24 do not know what the word “yields” means, and one in five do not know what a “stock” is.

Such results may explain why, according to the study, 80 percent of people wish they had learned more about business studies.

Hans Kaminski, an education expert at the Institute for Economic Education at the University of Oldenburg (which has worked with Handelsblatt on economic education projects), is not surprised by the results. “In Germany, getting economic education is a matter of luck,” he said. “Only those in the right state in the right schools learn something about economic correlations.”

Lower Saxony and Bavaria have long led the way, and now others are following. Starting in 2016, the state of Baden-Württemberg is making the subject of business and orientation compulsory for comprehensive school pupils.

Companies and teachers are also pushing for more business education. They want young people to have a reasonable understanding of how a company functions, who makes what decisions and what a works council does, said Stefan Küpper from the Baden-Württemberg Employers’ Association of the Metal and Electrical Industry.

“It is not that all students should have to be able to read a balance sheet or that we shift two semesters of business administration from the universities to the schools, but young people must explain their role as a consumer, worker, founder or entrepreneur and as an economic citizen,” he said.

The president of the German Teachers’ Association, Josef Kraus, backs this stance. “What is crucial is that there are about 200 hours of class time [for business studies],” he said.

But not everyone agrees.

The Federation of German Trade Unions, DGB, argues in favor of what it calls a “comprehensive social-economic education” rather than a focus solely on business studies. It would also take into account political and social issues. “Business as a school subject is not modern,” the organization wrote in a report.

Several state governments agree. Following a trial of a business studies course in secondary schools in North Rhine-Westphalia, a wealthy state in northern Germany, ministers decided not to make it mandatory. “Rather, the strengthening of economic education and consumer education will be planned for all school types,” the education ministry said in a statement.

Jürgen Häckert, the director of the Helene-Lange pre-vocational school in Essen, was one of the 70 taking part in the pilot project and thinks the decision is “unfortunate.” He said: “We need the subject so that students in today’s age can make rational decisions in daily life.” There should be a stronger focus on consumer education, he added.

Other states mix in business studies with loosely related subjects, such as business and technology, computer science, budget and social issues, or business and employment studies. “Sometimes the word ‘business’ is written in large letters, but if you look at the allocation of hours, it is clear there is something else in there,” said Mr. Kaminski.

Such a mish-mash across states leaves a hole that foundations, associations and companies are trying to fill. They are welcomed in more and more schools, as the constantly growing number of collaborations shows.

“It is important that the schools open themselves up,” said Heinz-Peter Meidinger, a teacher in a grammar school and the chairman of the German Association of Teachers of Language and Literature. He wants more directors and teachers to take up the offers, but just inviting the business associations or consumer protection advocates is not enough, he said.

Maybe the bureaucrats from North Rhine-Westphalia should stop by and pay a visit to Steffen Hilbert at the Comenius grammar school in Düsseldorf. Each year, it offers a year-long course in which 11th graders analyze the performance indicators of larger and smaller firms and even press ahead with a business idea. For example, one team last year came up with the idea of an electric-scooter sharing firm.

It is part of an educational initiative by Boston Consulting Group. The firm makes available materials and assistance and organizes mentors to work with the students. The young people have to present their analysis and ideas three times per year in front of a jury.

Mr. Hilbert knows that what the students learn in this course, which can be taken in place of technical work and is graded, far exceeds basic economic education. “After a year, the students are more structured and better at teamwork; they know that you have to split up in a way that makes sense to achieve the tasks, and that truly everyone has to work together,” he said.

The teachers involved in such initiatives also need to be business savvy. As a rule, their backgrounds consist of school, university, school, with little or no practical business experience. But that is now changing.

For example, in Bavaria, 100 grammar-school teachers have done just that since 2001 in a partnership with the Bavarian Industry Association. Carina Vogl, 34, who teaches English and Business Law, is one of them.

She spent a year working at the engineering firm Siemens, in the company’s human resources department in Munich. She can now report to her students first-hand how one survives job interviews and what companies actually expect from the younger generation. “Since I have experienced it myself, I want to pass it on to the students,” she said.

While she was at Siemens, she worked with a team that was implementing a global management training program, did coaching and organized conferences. Ms. Vogl decided to bring the values learned there – such as the feedback culture, the focus on personal development, and the strengthening of personal responsibility – back into the school and into teacher training. These are things that are also becoming increasingly important in the schools.

But there is criticism that these forays by the teachers can leave them too dedicated to the company for which they worked. “It cannot be that a teacher spends half a year at a computer company and – as has happened – returns fully indoctrinated as a type of ‘ambassador for the company,’” said a source in a Ministry of Education and the Arts in southern Germany.

Teachers can also view their role as solely teaching a subject, rather than helping with life lessons and training, said Volker Born, who heads the division of professional education at the German Confederation of Skilled Crafts. “Companies, chambers of trades and technical training centers are open for teachers, but this offer is taken up too infrequently, especially by the grammar school teachers,” he said. “There are gaps in information here.”

So it seems that enough teachers must have a proper understanding of business if the students are to be able to get one too.

 

Stefani Hergert is a Handelsblatt editor focusing on education and training. To contact the author: Hergert@handelsblatt.com

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