[35] Germany conducts applied research with practical industrial value and sees itself as a bridge between the latest university insights and industry-specific product and process improvements.

Energy in Germany is sourced predominantly by fossil fuels (30%), with wind power in second place, then gas, solar, biomass (wood and biofuels), and hydro.

[58] Some of the largest international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt, Cologne, Leipzig, and Düsseldorf.

Over time, other German states joined the customs union and started linking their railroads, which began to connect the corners of Germany.

The growth of free trade and a rail system across Germany intensified economic development which opened up new markets for local products, created a pool of middle managers,[clarification needed] increased the demand for engineers, architects, and skilled machinists, and stimulated investments in coal and iron.

[citation needed] The victory of Prussia and her allies over Napoleon III of France in the Franco-Prussian War of 1870-1871 marked the end of French hegemony in Europe and resulted in the proclamation of the German Empire in 1871.

The establishment of the empire inherently presented Europe with the reality of a new populous and industrialising polity possessing a considerable, and undeniably increasing, economic and diplomatic presence.

The influence of French economic principles produced important institutional reforms in Germany, including the abolition of feudal restrictions on the sale of large landed estates, the reduction of the power of the guilds in the cities, and the introduction of a new, more efficient commercial law.

Nonetheless, political decisions about the economy of the empire were still largely controlled by a coalition of "rye and iron", that is the Prussian Junker landowners of the east and the Ruhr heavy industry of the west.

[62] Regarding politics and society, between 1881 and 1889 Chancellor Otto von Bismarck promoted laws that provided social insurance and improved working conditions.

The rapid advance to industrial maturity led to a drastic shift in Germany's economic situation – from a rural economy into a major exporter of finished goods.

[65] The Nazis rose to power while unemployment was very high,[66] but achieved full employment later thanks to massive public works programmes such as the Reichsbahn, Reichspost, and the Reichsautobahn projects.

[73] Beginning with the replacement of the Reichsmark with the Deutsche Mark as legal tender, a lasting period of low inflation and rapid industrial growth was overseen by the government led by German Chancellor Konrad Adenauer and his minister of economics, Ludwig Erhard, raising West Germany from total wartime devastation to one of the most developed nations in modern Europe.

Apart from these factors, hard work and long hours at full capacity among the population in the 1950s, 1960s, and early 1970s and extra labour supplied by thousands of Gastarbeiter ("guest workers") provided a vital base for the economic upturn.

Some credit the Hartz reforms with achieving high growth and declining unemployment but others contend that they resulted in a massive decrease in standards of living and that its effects are limited and temporary.

[81] Germany exited the recession in the second and third quarters of 2009, mostly due to rebounding manufacturing orders and exports - primarily from outside the eurozone - and relatively steady consumer demand.

Well-known global brands are Mercedes-Benz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche, Bayer, BASF, Bosch, and Nivea.

Berlin developed an international startup ecosystem and became a leading location for venture capital funded firms in the European Union.

[111] The modernisation and integration of the eastern German economy continues to be a long-term process scheduled to last until the year 2019, with annual transfers from west to east amounting to roughly $80 billion.

[113] The following top 10 list of German billionaires is based on an annual assessment of wealth and assets compiled and published by Forbes magazine on 1 March 2016.

The following top 10 list of German cities with the highest per capita GDP is based on a study by the Cologne Institute for Economic Research on 31 July 2013.

[121] Germany's bituminous coal deposits were created more than 300 million years ago from swamps which extended from the present-day South England, over the Ruhr area to Poland.

German automotive companies enjoy an extremely strong position in the so-called premium segment, with a combined world market share of about 90%.

[131] Small- to medium-sized manufacturing firms (Mittelstand companies) which specialise in technologically advanced niche products and are often family-owned form a major part of the German economy.

Including indirect and induced impacts, the industry contributes 4.5% of German GDP and supports 2 million jobs (4.8% of total employment).

Major oil refineries are located in or near the following cities: Schwedt, Spergau, Vohburg, Burghausen, Karlsruhe, Cologne, Gelsenkirchen, Lingen, Wilhelmshaven, Hamburg, and Heide.

The extensive motorway (Autobahn) network ranks worldwide third largest in its total length and features a lack of blanket speed limits on the majority of routes.

The Intercity Express or ICE is the most advanced service category of the Deutsche Bahn and serves major German cities as well as destinations in neighbouring countries.

As a result, the numbers of workers are expected to decrease and the government spending needed to support pensioners and healthcare will increase if the trend is not reversed.

"[173] In October 2023, Economy Minister Robert Habeck called for more immigration to Germany, saying the shortage of skilled workers was the country's "most pressing structural problem".