The term "Mittelstand" is a peculiarity of German-speaking countries. It refers to the unity of company ownership and management. Thus, in order to classify an enterprise as Mittelstand, its (quantitative) size is of no importance. Decisive are, by contrast, its qualitative characteristics.
Typical for the unity of ownership and management is that
- the owners exert decisive personal influence on management issues,
- bear the entrepreneurial risks and
- the enterprise sustains their livelihood.
According to the definition of IfM Bonn, the terms Mittelstand, family enterprise and owner-managed enterprise are considered as synonyms.
The decisive qualitative features of Mittelstand enterprises (management and ownership structures, economic independence) are only very insufficiently mirrored in official statistics. Therefore, the statistical and macro-economic importance of the Mittelstand can only be proxied by applying SME-related data (as defined by IfM Bonn). In fact, the majority of small and medium-sized enterprises (SMEs) also meet the qualitative criteria of the Mittelstand. But large enterprises can belong to the Mittelstand as well if they fulfil the qualitative criteria.
Hence, the terms "Mittelstand" and "Small and medium-sized enterprises (SMEs)" are not synonyms.