Economic Overview Germany: Market, Productivity,...

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Economic Overview Germany:Market, Productivity, InnovationIssue 2013

Economic Overview Germany www.gtai.com

Economic Overview Germany

Basic Data

Area: 357,002 sq. km

Population (m.): 81.8

Number of companies*

3.7 million, 99.6% SMEs

Total turnover of all companies (2010)*

EUR 5.24 trillion,

37.8% SME turnover

Economic Development

GDP (nominal in EUR billion)

2011: 2,593; 2010: 2,496;

2009: 2,375

Per capita GDP (EUR)

2011: 31,700; 2010: 30,500;

2009: 29,000

Inflation rate

2011: 2.5%; 2010: 1.2%; 2009: 0.2%

Unemployment rate

2011: 6.0%; 2010: 7.1%; 2009: 7.7%

* ifm Bonn 2012 estimate

GDP Formation 2011

Foreign Trade

Foreign trade(EUR bn)

2011 % 2010 % 2009 %

Exports

Imports

Balance

1,061.2

902.5

+158.7

+11.5

+13.2

952.0

797.1

+154.9

+18.5

+19.9

803.3

664.6

+138.7

-18.4

-17.5

Germany’s trade relations with EU (EUR bn)

Exports to EU

Imports from EU

Balance

627.7

505.4

+122.3

+10.0

+13.7

570.9

444.4

+126.5

+14.0

+16.9

500.7

380.3

+120.4

-19.6

-17.5

Export goods (% of total exports – SITC) 2011: machinery 18.8; motor vehicles and parts 16.8; chemical goods 14.1;

electronic goods 9.3; foodstuffs 4.3; others 36.7

Import goods (% of total imports – SITC) 2011: foodstuffs 5.8; motor vehicles and parts 7.9; electronic goods 10.3;

chemical goods 11.8; machinery 12.3; crude oil and gas 12.5; others 39.4

Sources: Germany Trade & Invest, Federal Statistical Office, Federal Ministry of Finance, ifm Bonn 2012

GDP Growth

6

4

2

0

-2

-4

-62009 2010 2011

(real annual change in percent)

-5.1

4.23.0

Manufacturing

Industries 22.6%

Construction 4.6%

Commerce, Transporta-

tion, Catering 16.0%

Information &

Communication 3.8%Financial Services,

Renting, Business Services

26.3%

Others 26.7%


Foreign Direct Investment

Paving the Way for Foreign Direct Investment

First Choice Business LocationA recent study conducted by the

American Chamber of Commerce

highlights the positive regard in

which the German business envi-

ronment is held by US companies.

Invited to indicate their main me-

dium-term investment focus within

the EU, 73 percent of participating

American companies named Ger-

many as their first choice; followed

by Eastern Europe (57 percent),

and Western Europe (33 percent)

respectively.

Ernst & Young’s “European Attrac-

tiveness Survey 2012” confirms

Germany’s reputation as one of the

most attractive business locations

in the world. International decision

makers ranked Germany first within

the EU, and sixth worldwide in the

“most attractive business location”

category.

Free and Open MarketsGermany has a welcoming attitude

towards foreign direct investment

(FDI). The German market is open

for investment in practically all

industry sectors, and business

activities are free from regulations

restricting day-to-day business.

German law makes no distinction

between Germans and foreign nati-

onals regarding investments or the

establishment of companies. The

legal framework for FDI in Germany

favors the principle of freedom of

foreign trade and payment. There

are no restrictions or barriers to

capital transactions or currency

transfers, real estate purchases,

repatriation of profits, or access

to foreign exchanges.

Supporting Investment ProjectsIncentives in Germany are designed

to meet the immediate capital needs

of investors. Early stage investment

financing provides funding at the

beginning of the new investment

project. These incentives, mostly

provided as cash grants, are impor-

tant as they guarantee liquidity at

a stage in the investment process

when investor capital requirements

are typically high. Later stage invest-

ment incentives are made available

in the form of a raft of programs

created to support putting together

a workforce in Germany (e.g. through

wage subsidies) and provide gene-

rous R&D project assistance. Incen-

tives in Germany are available to

all investors – regardless of inves-

tor country of provenance. Funding

to the tune of EUR 26.3 billion has

been freed up by the EU (co-financed

using means obtained from German

federal and federal state budgets)

through 2013. As well as this, Ger-

many and its individual federal states

also make their own incentives funds

available to prospective investors.

Please visit our website for

more incentives information:

www.gtai.com/incentives

Global FDI MagnetAccording to the United Nations

Conference on Trade and Develop-

ment (UNCTAD), Germany ranks

among the world’s leading countries

for foreign direct investments with

more than EUR 513 billion in inward

FDI stocks in 2011. This represents

a growth of 13 percent from 2008

to 2011.

According to official Bundesbank

(German Central Bank) statistics

for 2010, 76 percent of all FDI

stocks in Germany originate from

within the EU-27; with a further

eight percent derived from the re-

maining European non-EU coun-

tries. Investments from outside

the EU continue to grow. North

America accounts for ten per-

cent of FDI stock, while Asia holds

a five percent share.

AmCham Business Barometer 2012

American business executives highlighted the following factors as the top

location advantages that distinguish Germany from its competitors.

Stability, reliability, security, continuity

Skilled workers, qualified employees, education

Market size, market relevance, capacity

Infrastructure, logistics

Innovation and research intensity

Source: American Chamber of Commerce Germany, Roland Berger Strategy Consultants 2012


Foreign Direct Investment

Foreign Direct Investment Projects

Every year more and more compa-

nies discover Germany as a secure

and rewarding investment location.

More than 55,000 foreign companies

are already operating in Germany,

providing employment to around

three million people – proof positive

of Germany’s attractiveness as an

international business location.

Between 2007 and 2011, fDi Markets

recorded a total of 3,535 investment

projects from around 3,000 foreign

companies. With 834 projects, 2011

proved to be the most successful

year on record – with Germany pla-

cing fifth internationally in terms of

FDI projects attracted.

The most important countries as

sources for new investment projects

are the USA (24 percent of all invest-

ment projects), Switzerland (eight

percent), and the UK (eight percent)

respectively. In 2009, China emerged

as a major source of investments,

with the number of Chinese invest-

ment projects into Germany more

than tripling within just one year.

This high level was even exceeded

in 2011, making Germany the world’s

number one location for Chinese

greenfield investments.

Diverse Industry OpportunitiesAccording to fDi markets, foreign

companies invested in 39 different

sectors – underlining Germany’s

highly diversified economy. Most

new investment projects were rea-

lized in the ICT & software industry

(18 percent of new projects). Busi-

ness and financial services as well

as automotive and industrial machi-

nery & equipment were close behind

each with 15 percent of all projects.

Most new projects open sales and

marketing & support offices. One in

seven investment projects is manu-

facturing-site located – making this

still a very important business acti-

vity in Germany.

Germany Trade & Invest's industry

experts will assist you to realize

your investment project in Germany.

Please contact [email protected] for more information.

ICT & Software 18%

Business & Financial

Services 15%

Automotive, Industrial

Machinery & Equipment 15%Chemicals, Plastics,

Paper 8%

Electronics &

Semiconductors 7%

Consumer Goods

(incl. Food & Beverages) 7%

Textiles 7%

Energy, Minerals,

Metals 6%

Transportation, Storage &

Logistics 6%

Health Care, Pharma,

Biotechnology 5%

Hotel, Tourism, Entertainment 2%

Other Sectors 4%

FDI Project Share in Germany by Sector 2007-2010 (as percent of total FDI projects)

Source: fDi Markets 2012

*Shared Service Center/Buisness Process Outsourcing/Contact Center

Source: fDi Markets 2012

0 5 10 15 20 25 30 35 40

Sales, Marketing & Support

Business Services

Manufacturing

Headquarters

Logistics, Distribution & Transportation

R&D

ICT & Internet Infrastructure

SSC/BPO/CC*

Education & Training

Other Activities

38%

15%

14%

7%

6%

1%

1%

1%

1%

16%

FDI Project Share in Germany by Business Activity 2007-2011 (as percent of total FDI projects)

Europe’s Economic Hub

Europe’s Largest Market Germany is the largest market in

Europe. It constitutes 20 percent of

European GDP, and is home to 16

percent of the total European Union

(EU) population. The German econo-

my is both highly industrialized and

diversified; with equal focus placed

on services and production.

Quick Recovery

Germany quickly recovered from

the economic slump of 2009. With

a GDP increase of 3.6 percent, the

economy experienced a strong

growth dynamic in 2010. In the

second quarter of 2010 alone,

Germany’s GDP expanded by 2.2

percent – the strongest quarter-

on-quarter growth since reunifica-

tion in 1990. This positive develop-

ment is reflected in all relevant eco-

nomic key data. The trend continued

in 2011, with the German economy

growing at a rate of three percent.

Global Player

Germany’s products continue to be

export hits worldwide. Offering inno-

vative and competitive products of

the highest quality, it is not surpris-

ing that, since 2000, Germany’s av-

erage export quota has amounted to

35 percent. German trade figures en-

joyed a brisk recovery from the glob-

al recession; increasing by around

20 percent in 2010 and 11 percent in

2011. Furthermore, for the first time

in history, exports amounted to more

than EUR 1 trillion (2011). Imports

also reached an all-time high of EUR

902 billion. The export quota in 2011

climbed to a record high of more

than 41 percent. German-produced

goods from the chemical, automotive,

and machinery & equipment indus-

tries are in particularly high demand

worldwide. Germany’s main trading

partners number European coun-

tries such as France, UK, Italy, and

the Netherlands as well as interna-

tional markets including the United

States, China, Russia, and Japan.

Seventy-one percent of all exports

are exported to European countries,

of which 59 percent go to EU mem-

ber states. In 2011, the number two

region for German exports was Asia;

receiving approximately 16 percent

of all goods from Germany, followed

by the Americas at approximately

10 percent.

Manufacturing Location Germany German companies represent more

than nine percent of European manu-

facturing companies and generate

26 percent of total EU turnover in

the sector. In fact, the manufacturing

sector represents nearly one fifth of

Germany’s “value added” – one of the

highest shares in Europe. Increas-

ingly more foreign companies are

placing their faith in Germany as a

vital production site location, and

are benefiting from the country’s

excellent business framework and

superior productivity rates.

SMEs: Germany’s Economic Backbone

Exports are driven by Germany’s

backbone of highly innovative small

and medium-sized enterprises (SMEs).

These constitute 99.6 percent of all

companies, employing almost 80

percent of all employees in Germany.

Many of these SMEs are world mar-

ket leaders in their respective niche

segments. Together with interna-

tionally leading large companies –

including Bayer, BASF, Daimler,

Volkswagen, and Siemens to name

but a few – they make up Germany’s

manufacturing industrial base.

Economic Overview Germany: Market

GDP (in EUR billion)

Share of Total GDP

(EU-27)

Population(in million)

Share of Total

Population(EU-27)

Germany 2,593 20% 82 16%

France 1,997 16% 65 13%

UK 1,750 14% 62 12%

Spain 1,063 8% 46 9%

Netherlands 602 5% 17 3%

Poland 370 3% 38 8%

Czech Rep. 156 1% 11 2%

Slovak Rep. 69 1% 5 1%

USA 10,830 313

Japan 4,219 128

EU-27 12,650 502

Eurozone 9,421 74% 332 66%

Share of Total GDP and Population in the European Union 2011

Source: Eurostat, US Census Bureau, Japanese Statistics Bureau 2012


Closer to Market with First Class Infrastructure

Europe’s Global Logistics HubWith state-of-the-art transporta-

tion networks by road, rail, sea, and

inland waterways – as well as a

dense network of both national and

international airports – Germany

provides easy access to domestic

and international markets. Little

wonder that Germany is a global

logistics hub. More goods pass

through Germany than through any

other country in Europe. Its approx-

imately one quarter share of the

European logistics market (EU-27,

Norway and Switzerland) reflects

Germany’s role as the major pla-

yer in the continent’s economy.

World Class Transport InfrastructureGermany’s infrastructure excel-

lence is confirmed by a number of

recent studies including the Swiss

IMD’s World Competitiveness Year-

book and various investor surveys

conducted by institutions including

UNCTAD and Ernst & Young. The

2012-2013 Global Competitiveness

Report of the World Economic Fo-

rum (WEF) ranked Germany first

in Europe and third worldwide for

infrastructure; singling out Ger-

many’s extensive infrastructure

for highly efficient transportation

of goods and passengers for special

praise. Accumulated in this score

for Germany are high marks for the

quality of roads and air transport,

excellent railroads and port infra-

structure, as well as its communi-

cations and energy infrastructure.

Economic Overview Germany: Market

World Class Network InfrastructureAmong the highlights of the coun-

try’s network infrastructure are

Europe’s second largest port

measured in container port traffic

(Hamburg), Europe’s largest port

container terminal (Bremerhaven)

and over 250 inland ports. Germany

has a dense network of airports (of

which 21 are international airports).

Among them, Frankfurt is the world’s

seventh and ninth largest airport

in terms of cargo and passenger

volume respectively. The country’s

highway system has one of the high-

est highway kilometer density levels

in Europe, its 37,679 km of railway

track being almost enough to circle

the globe. Germany’s high-speed

railway network, with speeds of up

to 300 km/h, is the fourth largest

in the world.

Logistics GiantsNot only is Germany’s logistics infra-

structure among the best, its compa-

nies are also global logistics leaders.

In fact, the world’s leading logistics

services provider is a German com-

pany – Deutsche Post DHL. Deutsche

Bahn operates Europe’s largest rail

network and Lufthansa Cargo is

one of the world’s leading global air

freight companies. Annual revenues

of over EUR 220 billion in 2011 make

Germany Europe’s logistics leader.

No other EU country comes close to

Germany’s market size.

“Germany is our strategic focal point, a country

there is no way around in our industry. Germany

is the largest market in Europe, which creates the

greatest advantages for our company. Investing

here was an absolute must.”Sun Shubao, General Manager, Haier Group Europe and Germany

Source: World Economic Forum 2010

Rank Country

1 Germany

2 France

3 Switzerland

4 UK

5 Netherlands

6 Spain

7 Luxembourg

8 Austria

9 Denmark

10 Sweden

Quality of Infrastructure in Europe

Source: WEF 2012

Bringing East and West TogetherIn the north, Germany’s seaports

are an important conduit for trade

with the UK, Scandinavia, and the

Baltic states. In the west, an exten-

sive network of roads, rail links and

inland waterways feeds into France

and the Benelux countries. To the

south, Germany has strong com-

mercial ties with Switzerland and

Austria and direct road, rail and

water links with the Balkan states.

Turning eastwards, Germany’s bor-

ders with Poland and the Czech Re-

public also bring the Slovak Republic

and Hungary within easy reach and

make the more distant markets in

Turkey and Russia readily accessible.


Economic Overview Germany: Productivity

Increasing Competitiveness

High ProductivityMeasured in unit labor costs, Ger-

many experienced a major increase

in productivity the past decade. In

marked contrast to other European

countries which have experienced

an overall increase in unit labor

costs, Germany’s unit labor costs

decreased by a yearly average of 0.4

percent for the period 2004 to 2011.

This made the economy more com-

petitive – particularly manufacturing.

Stable Labor CostsAt the same time, the labor cost gap

between Germany and its eastern

European neighbors has been sig-

nificantly reduced. In fact, Germany

has gained the labor-cost edge in

recent years. Since 2002, wages

have risen in most European coun-

tries (EU-27), with the growth rate

averaging 3.1 percent. While some

countries – particularly those in

eastern Europe – experienced a

rise of more than seven percent,

Germany recorded the lowest labor

cost growth within the EU at just

1.6 percent. This has been another

decisive argument in favor of Ger-

many as a premium business

location.

Excellent Production Standards Germany’s high productivity is also

closely linked to its excellent pro-

duction process standards. This

has been confirmed by a study of

international executives conducted

by the World Economic Forum (WEF).

According to the study findings,

Germany is seen as a country

where the best and most efficient

process technology is applied.

1=labor-intensive methods or previous generations of process technology

7=the world’s best and most efficient process technology

Source: World Economic Forum 2012

0 1 2 3 4 5 6 7

6.6

6.46.0

5.7

5.5

5.4

4.7

4.5

4.5

4.1

Assessment of Sophistication of Production Process 2011

Japan

GermanyNetherlands

USA

UK

France

Czech Rep.

Spain

Slovak Rep.

Poland

China 3.9

“Europe is a growing market for our light-curing

adhesives. Due to the highly qualified workers and

efficient cost structure, Germany was the clear

choice for the expansion of our production and

R&D activities.”A.Gregory Bachmann, President, DYMAX Corporation

0% 5% 10%

Source: Eurostat 2012

Labor Cost Growth in Total Economy 2002-2011(annual average growth in percent )

1.6%

2.4%

3.1%

3.3%

3.7%

5.7%

5.8%

7.5%

7.2%

Germany

France

Netherlands

Spain

UK

Czech Rep.

Poland

Hungary

Slovak Rep.


Highly Skilled WorkforceGermany’s excellent workforce is

decisive to the country’s high pro-

ductivity rates. It comprises over

40 million people – making it the

largest pool of ready labor in the

EU. Germany’s world-class educa-

tion system ensures that the high-

est standards are always met. More

than 80 percent of the German work-

force has received formal vocational

training or is in possession of an

academic degree.

Dual Education SystemGermany provides direct access to

a highly qualified and flexible labor

pool. For vocational training the

country developed the dual educa-

tion system – unique in combining

the benefits of classroom-based and

on-the-job training over a period of

two to three years – which is specifi-

cally geared to meet industry needs.

There are currently around 350

occupations recognized by the sys-

tem. The German Chambers of In-

dustry and Commerce (IHKs) ensure

that exacting standards are rigidly

adhered to, guaranteeing the quality

of training provided across Germany.

Engineering ExcellenceAccording to the OECD, Germany

has an excellent standard in higher

education. In 2011, some 517,000

students – at more than 420 uni-

versities – embarked on a course of

academic study. Technical fields of

study experienced an undergraduate

enrollment level increase of more

than eight percent. Germany’s share

of university students in the sciences,

mathematics, computer sciences,

and engineering is the third high-

est in the EU, with 31 percent of all

students. German universities have

introduced masters and bachelor

degrees for improved international

acceptance and comparison.

In addition, the country can be proud

of one of the highest rates of gradu-

ates with a doctoral degree. With 311

PhD graduates per million inhabit-

ants, it ranks second in a comparison

of EU countries.

Outstanding ReputationGerman labor flexibility is reflected

in higher than average employee

motivation levels – exceeding those

of most leading industrialized nations.

In fact, according to the IMD World

Competitiveness Yearbook, German

Economic Overview Germany: Productivity

employee motivation levels are

greater than those of their coun-

terparts in the US, China, Poland,

France, and the UK. A direct corol-

lary of this is the fact that Germans

work more than their international

peers (40.6 hours per week) and lose

less days per annum to strike action

than other European nations (sig-

nificantly below the EU-27 average

according to Eurofound).

Workforce in Germany by Level of Professional Education 2011(percent of total workforce)

Source: Federal Statistical Office 2011

Skilled Craftsmen

(dual education system

apprentices) 55%

Vocational College

Graduates & Technicians

(master craftsmen) 11%

Unskilled 17%University Graduates 17%

10=highest motivation level

Note: IMD WCY Executive Opinion Survey based on an index from 0 to 10

Source: IMD World Competitiveness Yearbook 2012

Worker Motivation in Companies 2012

Switzerland

0 1 2 3 4 5 6 7 8

GermanyJapan

Netherlands

USA

Czech Rep.

UK

China

Slovak Rep.

Poland

7.397.35

7.17

6.55

5.87

5.78

5.73

5.24

5.08

Hungary

France

5.03

4.78

Spain 4.65

8.05


High Innovation Rate

Innovation Leader GermanyIn Germany, enormous sums are

invested in the development of new

technologies and innovations. Today,

total R&D expenditures of almost

EUR 70 billion (2010) make Germany

Europe’s largest research location.

Since 2005, R&D expenditures have

steadily increased at a compound

annual growth rate of 4.6 percent.

R&D is considered to be among the

most important areas for the devel-

opment of the German economy. In-

dustry in particular has significantly

increased its R&D expenditures in

recent years. The European Com-

mission accordingly expects Germany

to reach its ambitious 2020 R&D tar-

get of three percent of R&D expen-

ditures of GDP in the coming years

(Innovation Union Competitiveness

Report 2011).

Location Advantage:Innovation Value-AddA 2011 study carried out by the Ger-

man Institute of Economic Research

(DIW) found that no other industrial-

ized country produces a larger share

of gross value added in research-

intensive manufacturing industries

than Germany. Germany especially

outperforms in its traditionally

strong industries: machinery, auto-

motive, chemicals, and electronics.

The share of total value creation in

research-intensive industries in

Germany exceeds that of Japan

and the US and is more than double

the share of France, UK, and Italy.

A broad base of foreign investors

in R&D underlines Germany’s

strong position. Around 85,000

employees work in R&D in Ger-

man subsidiaries owned by foreign

companies. With an annual R&D

budget of EUR 15.2 billion in 2009,

these companies account for more

than 27 percent of total industry

innovation expenditure. Most R&D

facilities are still operated by Euro-

pean and US companies. However,

Germany’s innovation landscape

is very firmly on China’s radar. In

a 2012 Ernst & Young study of 400

Chinese managers, 72 percent of

respondents identified Germany as

Europe’s best location for estab-

lishing an R&D center.

Diverse Innovation Landscape Industrial research reflects Ger-

many’s key source of innovation.

Domestic companies invested

almost EUR 47 billion in developing

new technologies for competitive

products in 2010. Five of the EU’s

top ten R&D companies are German

enterprises with Volkswagen lead-

ing the ranking. Germany’s innova-

tion landscape represents various

research players with the industry

as a major player in contract re-

search. In 2010, companies invested

almost EUR 11 billion in third-party

(i.e. contract) research led by uni-

versity and non-university research

organizations. Today, successful

research in Germany is based on

efficient cooperation of companies,

universities, and research organi-

zations. A national cluster network

combines cooperative research

along the value chain with tradi-

tionally strong and world-leading

industries.

High-Tech Products Made in GermanyGerman companies are global lea-

ders in the development of new

technologies. The “Made in Germany”

brand has been a seal of quality for

over a century. In 2010, Germany

exported high-tech goods to the

value of EUR 120 billion – making

it the top high-tech goods exporter

in Europe and second worldwide.

Economic Overview Germany: Innovation

Share of Research-intensive Industries of Gross Value Added 2009

Source: German Institute of Economic Research (DIW) 2012; Note: High-tech industries are characterized

by high internal R&D expenditures of between 2.5%-7% of the average OECD turnover; Cutting-edge technologies

show an internal R&D intensity of more than 7% of the average OECD turnover.


14%

12%

10%

8%

6%

4%

2%

0% Germany Japan EU-14 USA

12.4%

9.5%

2.9%

9.8%

6.5%

3.3%

6.5%

4.2%

2.3%

6.9%

3.6% 3.4%

Research-intensive industries (total)

High-tech industries

Cutting-edge technology

This shows the commercial viability

of innovations made in Germany. The

country is also the leading European

nation in triadic patents (patents

registered at the three major global

patent offices: the European Patent

Office, the United States Patent and

Trademark Office, and the Japan

Patent Office).

Profiting from Innovation ClustersThe German R&D landscape is best

exemplified by close cooperation

between the worlds of science and

industry. Germany’s publicly funded

research bodies provide an interna-

tionally unique location advantage.

Large networks of applied research

institutes provide companies – par-

ticularly SMEs – with unparalleled

access to world-class research.

With about 80 research facilities

and more than 20,000 employees,

the Fraunhofer-Gesellschaft utilized

more than EUR 1.8 billion in research

funding in 2011. The Leibniz Associa-

tion has established a network of 86

research institutions with almost

17,000 employees. Some of the world’s

most renowned fundamental re-

search institutes are also located in

Germany. The Max Planck Society

and the Helmholtz Association al-

low companies to outsource costly

research activities. This eases the

access of developing new products

and decreases research and de-

velopment costs. Numerous spin-

offs underline the ability of German

research organizations to capitalize

on technology.

Public R&D Support: Germany’s High-Tech StrategyAn unprecedented campaign to foster

the advancement of new technolo-

gies has been launched by the Ger-

man government. The High-Tech

Strategy promotes the advancement

of new technologies by creating

synergy effects between industry

and institutional research. Most pro-

grams within the framework of the

High-Tech Strategy promote part-

nerships between different project

partners – particularly enterprises

and research institutes – in order

to bring together institutional re-

search and entrepreneurial exper-

tise. R&D projects can accordingly

count on generous financial support

in the form of R&D grants. Interest-

reduced loans and special partner-

ship programs complete Germany’s

public R&D project support.

World Class Know-HowWhile Germany is home to the lar-

gest population of researchers in

Europe (21 percent of all EU scien-

tists live and work in Germany),

German scientists work on projects

all over the world. For example, re-

search results obtained by the Max

Planck Society are achieved through

fruitful partnerships with more than

6,000 partners in research institu-

tions across 123 countries. Coope-

ration projects between companies

and academic research institutes

provide an efficient way to close

knowledge gaps. Scientists can be

easily integrated into the company

team of developers and researchers

and, increasingly, institutes provide

for the necessary laboratory facilities.

Europe’s Patent LeaderWith over 13,000 patents granted at

the European Patent Office in 2011,

Germany’s share of patents is more

than twice that of France and the UK

combined.

Economic Overview Germany: Innovation

Source: Eurostat 2012

Germany 21%

France 15%

UK 15%

Portugal 3%

Sweden 3%

Poland 4%

Italy 7%

Spain 9%

Others (18 EU countries) 20%

Netherlands 3%

National Share of Researchers in EU-27 2010

“As a global company, Alcatel-Lucent relies on

Germany’s excellent R&D landscape. A culture

of efficiency, creativity, and entrepreneurship

creates the ideal environment for us to innovate.”Alf Henryk Wulf, Chairman of the Board, Alcatel-Lucent Deutschland AG


Ireland

UK

Russia

FinlandSweden

Norway

France

Spain

Portugal

Italy

Poland

GERMANY

Malta

Greece

Denmark

Czech Republic

Austria

SwitzerlandRomania

Netherlands

Belarus

Ukraine

Turkey

SerbiaBulgaria

Lithuania

Latvia

Estonia

Bosnia- Herzegovina

Slovak Republic

Hungary

RU

Moldova

Macedonia

Albania

Croatia

Slovenia

Montenegro

Dublin

London

Lisbon

Madrid

Paris

Luxembourg

Berlin

Belgium

Brussels

Amsterdam

Copenhagen

Oslo

Stockholm

Helsinki

Moscow

Minsk

Tallin

Riga

Vilnius

Warsaw

Kiev

Chisinau

Bucharest

Sofia

Ankara

Athens

Tirana

Skopje

Belgrade

Rome

Valletta

Bern

Sarajevo

Zagreb

Ljubljana

Vienna

Budapest

Bratislava

Prague

Podgorica

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< 24 h by truck

15 h > 30 h by train >

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11

Germany: At the Crossroads of Europe

Situated at the market crossroads of Europe, Germany’s optimal geographic

location is beyond question: Over half of the EU population lives within 500

kilometers of Germany’s borders; more goods pass through Germany than

any other European country; and almost all of Europe is reachable within

three hours by air or 24 hours by road.

Kosovo

Pristina


R&D Expenditure by Federal State Equivalent Country 2010

NORTH SEA

BALTIC SEA

CZECH REPUBLIC

POLAND

THE NETHERLANDS

BELGIUM

FRANCE

LUXEM-BOURG

Source: Eurostat, Federal Statistical Office 2012

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Baden-Württemberg

Spain + Portugal

Bavaria Russia

Saarland

Slovak Republic

Rheinland-Pfalz

Czech Republic

North Rhine-Westphalia

Netherlands

lia

Hessen Finland

Saxony Poland

Thuringia Hungarygary

Saxony-Anhalt Sloveniavenia

Niedersachsen Norway

Mecklenburg-Vorpommern

Romania

Schleswig-Holstein

Slovenia + Croatia

Hamburg Bulgaria + Hungary + Romania

Bremen Luxembourg

Berlin Turkey

Brandenburg Bulgaria +

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ce

UK

EUR 43.6 bn

EUR 30.1 bn

EUR 69.8 bn

DENMARK

Bulgaria

Innovation “Made in Germany”

Germany invests significantly in fast-developing tech-

nologies. With a 2010 R&D investment level of around

EUR 70 billion, Germany invested almost the com-

bined innovation expenditures of the UK and France

put together. Technology transfer between universities,

non-university research organizations, and companies

takes places in highly specialized technology clusters

located across the country.

Individual federal state research budgets often corres-

pond with those of other European countries. Bavaria’s

R&D spending, for example, significantly exceeds that

of Russia while North Rhine-Westphalia invests more

than its western neighbor, the Netherlands.



Our Investment Project Consultancy Services

Germany Trade & Invest Helps You

Germany Trade & Invest’s teams of

industry experts will assist you in

setting up your operations in Ger-

many. We support your project man-

agement activities from the earliest

stages of your expansion strategy.

We provide you with all of the indus-

try information you need – covering

everything from key markets and

related supply and application sec-

tors to the R&D landscape. Foreign

companies profit from our rich ex-

perience in identifying the business

locations which best meet their spe-

cific investment criteria. We help

turn your requirements into concrete

investment site proposals; providing

consulting services to ensure you

make the right location decision. We

coordinate site visits, meetings with

potential partners, universities, and

other institutes active in the industry.

Our team of consultants is at hand

to provide you with the relevant

background information on Germa-

ny’s tax and legal system, industry

regulations, and the domestic labor

market. Germany Trade & Invest’s

experts help you create the appro-

priate financial package for your in-

vestment and put you in contact with

suitable financial partners. Incen-

tives specialists provide you with

detailed information about available

incentives, support you with the ap-

plication process, and arrange con-

tacts with local economic develop-

ment corporations.

All of our investor-related services

are treated with the utmost confiden-

tiality and provided free of charge.

Project Management Assistance

Coordination and

support of nego-

tiations with local

authorities

Joint project

management with

regional develop-

ment agency

Project partner

identification

and contact

Market entry

strategy support

Business oppor-

tunity analysis and

market research

Location Consulting /Site Evaluation

Final site

decision support

Site visit

organization

Site preselectionCost factor

analysis

Identification of

project-specific

location factors

Accompanying

incentives application

and establishment

formalities

Administrative

affairs support

Organization of

meetings with

legal advisors and

financial partners

Project-related

financing and incen-

tives consultancy

Identification of re-

levant tax and legal

issues

Support Services

Decision & InvestmentStrategy Evaluation

Contact

Imprint

PublisherGermany Trade and Invest

Gesellschaft für Außenwirtschaft

und Standortmarketing mbH

Friedrichstraße 60

10117 Berlin

Germany

T. +49 (0)30 200 099-555

F. +49 (0)30 200 099-999

[email protected]

www.gtai.com

Executive Board

Dr. Benno Bunse, Chairman/CEO

Dr. Jürgen Friedrich, CEO

AuthorsThomas Bozoyan, Market Intelligence Germany

Germany Trade & Invest, [email protected]

Dr. Hans-Peter Hüssen, Market Intelligence Germany


Marc Lehnfeld, Market Intelligence Germany


EditorWilliam MacDougall, Germany Trade & Invest

LayoutGermany Trade & Invest

PrintDas Druckhaus Bernd Brümmer, Bonn

SupportPromoted by the Federal Ministry of Economics and Technology and the Federal

Government Commissioner for the New Federal States in accordance with a

German Parliament resolution.

Notes©Germany Trade & Invest, December 2012

All market data provided is based on the most current market information

available at the time of publication. Germany Trade & Invest accepts no liability

for the actuality, accuracy, or completeness of the information provided.

Order Number14783

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Germany Trade & InvestFriedrichstraße 60

10117 Berlin

Germany

T. +49 (0)30 200 099-555

F. +49 (0)30 200 099-999

[email protected]

About Us

Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. The organization advises and supports foreign companies seeking to expand into the German market, and assists companies established in Germany looking to enter foreign markets.

All inquiries relating to Germany as a business location are treated confidentially. All investment services and related publications are free of charge.

Promoted by the Federal Ministry of Economics and Technology and the Federal Government Commissioner for the New Federal States in accordance with a German Parliament resolution.

www.gtai.com

Economic Overview Germany: Market, Productivity,...

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