imagine and print!h2epower.net/wp-content/uploads/2020/05/download-markets...Issue 2 / April 2016...

Issue 2 / April 2016 The Business Magazine

imagine and print!3-D printing. From materials to technology and workforce: The exciting and fast-growing world of additive manufacturing in Germany.

crunchInG nuMBers

Big data is big business: the

challenges and opportunities. p12

The socIAl enTrepreneur

A touching family story

that inspires innovation

and development. p24

cover sToryImagine and Print ...................................................................... 6

locATIon Silicon Alley Still Sizzling ..................................................... 10 (S)integrating the Future ............................................................ 12

InDusTryCalifornian Brewing ................................................................... 14Stored in Germany ...................................................................... 15Crunching Numbers .................................................................. 16Recharge Your Batteries............................................................. 18Services Made in Germany ........................................................ 19

BusInessHolistic Point of View .................................................................. 20Pharmacies in Germany Play Key Role in OTC Sales Growth .... 22“Oh, I Do Like to be Beside the Seaside!” ............................... 23

successThe Social Entrepreneur .................................................... 24

ContentsABouT usLondon Calling ........................................................................... 26

FAcTs & FIGures: Into the Future .........................................27

My GerMAny .....................................................................3 news .................................................................................4

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Coveristock/ Tomasz Wyszołmirski

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dear reader,Germany Trade and Invest’s 2015 statistics show that our agency had a very successful year. We were able to support thousands of foreign investors in their decision-making process. Most of the investment projects aided by GTAI came from China, followed by France, Japan, the United States, the United Kingdom, and Canada. In addition, inves-tors from Italy, the United States, Canada, the United Kingdom, and China created the majority of jobs through these projects.

With regard to the continent of origin, most of the investments came from Europe (44 percent), followed by Asia (38 percent) and the Americas (15 percent). The business func-

tions of these investments were as follows: 48 percent to sales and distribution, 25 percent to services, 11 percent to open headquarters in Germany, 8 percent to production sites, 6 percent to R&D centers, and 2 percent to logistics businesses. The bulk of projects were set up in the service industries, the mechanical and electronic technologies, renewable energies and resources, and chemicals and healthcare. In eastern Germany, Berlin, Saxony and Branden-burg were the most popular sites, and in the western part of the country it was Nordrhein-Westfalen, Bavaria and Hessen.

A significant number of the GTAI projects were instigated by investors contacting GTAI directly, which means that the brand awareness for GTAI has been increasing, much to our satisfaction. We want to make a further contribution to this with the current issue of our magazine, which brings you features on Germany’s 3D printing, data security, big data, outsourcing industry, healthcare industry, and much more. Enjoy your read!

Dr. Jürgen FriedrichChief Executive


IMAGINE AND PRINT!3-D Printing. From materials to technology and workforce: The exciting and fast-growing world of additive manufacturing in Germany.

CRUNCHING NUMBERS

Big data is big business: the

challenges and opportunities. p12

THE SOCIAL ENTREPRENEUR

A touching family story

that inspires innovation

and development. p24

2

editorial

markets Germany 2/2016

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Sunny boy!

I came to Germany to study. I’d been interested in technology

and renewable energies for what felt like forever. And I knew that Germany was a pioneer in this field. After my graduation and work experi-ence in the industry, I established AX Power Solution GmbH, the German subsidiary of Lishen Battery Joint-Stock Co., Ltd. in 2012, and Alpha ESS Europe GmbH in 2015. Alpha ESS Eu-rope provides energy storage sys-tems, and so contributes to the ener-gy revolution and a sustainable world. Intersolar 2015 nominated Alpha ESS as a finalist for the EES Award, which made me very proud. As a small company we were glad to have been so well supported by Germany Trade and Invest, particu-larly when it came to partner match-ing and information procurement. The German market can be tough, but it can be also a big chance – the country is very innovative and envi-ronmental awareness is high.

Xin Xu, Managing DirectorAlpha ess europe Gmbhwww.alpha-ess.de

my germany

32/2016 markets germany

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Super Smart gloveSIndustrie 4.0. A German startup has put the future in workers’ hands with an electronic glove that makes other tools superfluous.

Whether assembling engines in a fac-tory or handling baggage at the air-port, every second lost picking up

another tool or accessing information counts. And over time, those seconds add up to millions in money with significant lost value. Inspired by the success of wearables like smartwatches, two Munich-based entrepreneurs pondered over potential applications in industry. Realizing that workers in many jobs al-ready wear gloves, they thought: “We’ll make the glove smart.” Thanks to a cash injection from an Intel competition, the

duo has developed the ProGlove, which renders additional devices redundant. Sensors can perform tasks like tracking movements, gauging temperatures or even measuring blood pressure, a scan-ner can read barcodes and RFID chips and a display can give the wearer infor-mation such as what the next step is or whether a mistake has been made. With the ongoing revolutionizing of produc-tion, the glove could be a game changer. As one expert has put it, “ProGlove makes Industrie 4.0 tangible.” > www.proglove.de

Medical Technology. A laser device that tests blood glucose levels without drawing blood.

For more than 350 million people across the world with diabetes, hav-ing to prick their finger to check their

blood glucose level is an unpleasant obli-gation. But DiaMonTech, a startup launched by researchers from the Goethe University of Frankfurt, has developed a non-invasive device that uses infrared la-ser light to detect glucose levels in skin fluids. At the moment, with the help of eight business angels, they are working on making the device small enough to fit in a shoebox by mid-2017. > www.diamontech.de

Say no to needleS

artiCiFiCal Helping HandWading through mountains of docu-

ments, such as in due diligence pro-cesses, is cumbersome. But a

German startup is shaving thousands of laborious hours off such tasks. Leverton, a spin-off of the German Research Center for Artificial Intelligence, offers a software solution that “applies disruptive deep learning/machine learning technology” to the extraction and management of data from corporate documents. In particular, it helps clients in the financial and real-estate sectors including Goldman Sachs, Clifford Chance, Deutsche Bank, Strabag and Deloitte to optimize contract man-agement. For example, the software can quickly find buried facts and translate data in up to 20 languages. Plus, it offers the highest security standards in German data centers. > www.leverton.de

DiaMonTech has developed an infrared laser that detects glucose levels.

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Read this article in full

length online here: www.gtai.com/ markets-ger-

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in brief

RenTinG pRopeRTy

A perfect MatchDigital innovations are revolutionizing how people find and secure apartments in Ger-many. Startups such as nesthub, moovin, Homey and Vendomo serve as the real-es-tate equivalent of an online-dating service. Using algorithms, they match apartment-hunters with suitable apartments without charging the usual brokerage fee of almost 2.5 months of rent. On top of that, the Ber-lin-based startup Kiwi.ki has developed a small transponder or smartphone app that opens doors by activating a sensor in the bell system. The tool is particularly helpful for housing companies, mail carriers and trash collectors and is already being used by over 500 companies. > www.kiwi.ki

MeALS on WHeeLS

A Moveable FeastGerman tastes are becoming much more international. Getting your lips on food such as donuts, burritos, and dim sum has gotten much easier with the arrival of the food truck craze in cities across the country. The business has become so popular that there are now services to organize rotations to various “food truck stops” and a new street-food convention in Nuremberg dubbed “the meeting place for colorful eating culture.” > www.streetfoodconvention.de

coBBLeRS

Vegan ValuesFor many vegans, the ethics of avoiding animal products includes not only what you eat, but also what you wear. With this in mind, the Berlin-based, crowdfunded startup FreiVon has designed “Made in Germany” shoes made from recyclable materials such as bamboo and recycled mattress foam. The ultimate goal: shoes that are 100% biodegradable.> www.freivon-schuhe.de

top neigHbor

Go WeST!

When expanding to foreign markets, Czech companies have tended to concentrate on the economies of

Eastern Europe. However, growing num-bers of Czech companies are showing in-terest in investing in neighboring Ger-many, their most important trade partner. In 2015, Germany imported goods from the Czech Republic valued at nearly EUR 40 billion.

Czech companies are opening branches in Germany in order to get

Ecomobility. The benefits of car sharing can be significantly increased by cars powered by the more ecofriendly com-pressed natural gas sourced from renewables.

the average vehicle employed in car-sharing systems, which now have over 1 million users in Germany, emits an

estimated 728 fewer kilograms of carbon dioxide than the average car. But two Ger-man entrepreneurs have a plan to make this green alternative even greener by launching a fleet of free- floating shared cars powered by compressed natural gas (CNG), which is cheaper and emits much less carbon dioxide, nitrogen oxide and particulate matter than standard fuels. The founders of the startup Fjuhlster

hope their concept will serve as a “bridge technology” as hydrogen and electric mobility becomes more advanced and economical. Their vision is to embed the energy transition into the mobility sec-tor, as this is amongst the largest emit-ters of greenhouse gases. The startup is currently in the development phase and is testing a range of technologies that convert electriticy into storable gases for multiple applications, including sus-tainable e-fuels. > www.fjuhlster.de

green getS greener

closer to customers, respond to buyers’ wishes, and benefit from worldwide ex-port contacts. “Our companies’ finan-cial capacities are growing, and after successfully exporting to the key mar-ket of Germany, they tend to demon-strate an increased interest in founding subsidiaries there,” says Adam Jares, Di-rector of CzechTrade in Düsseldorf. The spectrum of target industries is diverse, ranging from machine building and software to energy.

Trade. Growing numbers of Czech companies are discovering the benefits of investing in their German neighbor.

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2/2016 markets Germany

Additive manufacturing. Germany is among the leaders in the fast-growing field of 3-D printing, thanks to its large industrial base, dense network of research institutions, and huge consumer market.

imagine and print!

Germany’s industrial strength, size and the availability of public funding for research and development make it an ideal location for innovators in the market for 3-D technology. Contact GTAI‘s 3-D printing expert Max Milbredt. [email protected]

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the future wasn’t looking bright for “Grecia”, a Costa Rican toucan who lost the top half of his beak in a vi-cious attack by youths in 2015. He could no longer feed himself,

preen his feathers or sing. Photos of the unfortunate tropical bird made interna-tional headlines and many animal-lovers donated funds to pay for the beak to be repaired. But how could this be done? 3-D printing provided the answer.

The technology, having been around since the 1980s and continually refined, has now reached the point where it is making headlines weekly, because of its startling capabilities. It’s already possi-ble to print your own pizza, a designer dress, or an accurate sculpture of an un-born foetus. Scientists at the Fraunhofer Institute for Interfacial Engineering and Biotechnology in Stuttgart have devel-oped so-called “bio-inks” containing live cells that when printed, are able to imi-tate a variety of natural tissues. Much re-search still needs to be done, but one day it might be possible to print hearts, liv-ers and kidneys.

For millions of years, products were made by cutting and grinding materials down to size. 3-D printing, also referred to as additive manufacturing, works the opposite way: using micro jets or lasers that melt powders, adding layer upon layer of material to create a computer-de-signed product. The advantage of 3-D printing is that no material is wasted and complex products can be manufac-tured without having to produce specific tools or molds for them. It’s particularly useful when only limited quantities of a

product, or perhaps just one, are re-quired, such as prosthetic limbs or den-tal implants for humans, aircraft parts, or a certain toucan’s beak.

“This is a rollercoaster industry. Breakthroughs are happening on a week-ly basis,” said Michael Sorkin, head of Eu-ropean Operations for Formlabs, a United States manufacturer of advanced desktop 3-D printers that opened its European headquarters in Berlin last year with the support of GTAI’s 3-D printing expert Max Milbredt. “We chose Germany because the majority of our additive manufacturing clients are engineers, designers and proto-type makers and they’re mainly located in Germany,” said Sorkin. Germany Trade and Invest advised Formlabs on tax ques-tions and corporate law and put it in touch with experts and job recruiting agencies. It also helped to find premises in Berlin. “As we all know, the car manufac-turers, the production companies, our biggest target groups, are sitting in Ger-many which has already adapted to the 3-D printing industry. It’s one of the big-gest markets, and one of the most inter-esting and diverse,” Sorkin added.

MuLTiTuDe oF BeneFiTS

The 3-D printing market offers vast growth opportunities, and Germany is at the

Grecia the costa rican toucan lost part of his beak during an attack by youths in 2015.

Three questions to Dental Wings CEO Michael Rynerson on moving to Germany.

What 3-D printing technology is be-ing used by Dental Wings so far? Dental Wings has historically pro-duced dental laboratory scan and design systems that connect to a number of downstream production technologies including 3-D print-ing. Our customers utilize 3-D print-ing to produce dental restoration substructures, dental models, oral surgery drill guides, metal frame-works for removable dentures, and several other areas.

Why did you decide to expand in Germany? What advantages does it offer as an industrial location?Germany is the center of the European dental industry, home to many of the biggest names in dental technology, materials, and services. Germany will continue to have a very strong dental market for the foreseeable future, par-ticularly in digital technologies and advanced materials. Likewise, growth opportunities are quite strong com-pared to other countries specifically for digital products due to the strong adoption of digital tools among dental professionals, and the ever-increasing demand for excellent quality without sacrificing delivery time.

How is 3-D printing changing the dental industry?3-D printing is an interesting part of a larger digitalization trend in the den-tal industry. Dental Wings is a leader in providing complete process solu-tions to increase the efficiency, effec-tiveness, and productivity of dental professionals. 3-D printing is evolving into one of the most important out-put technologies for this emerging network of solution providers.

Read the whole Interview with Dental Wings CEO Michael Rynerson at www.gtai.com/markets-germanyP

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forefront of innovation thanks to its large manufacturing base, skilled work-force, ingenuity, and excellence in applied research and the size of its consumer mar-ket. A further important factor is Germa-ny’s strength in the two industries set to profit most from additive manufacturing: the aerospace and automotive sectors.

The aerospace industry requires lightweight parts that are strong, geo-metrically complicated and produced in relatively small quantities – require-ments that tick all the boxes for additive manufacturing. Germany is one of the main production sites of the Airbus group and printed parts are already be-ing used in some of its planes. The auto industry is also a big user of additive manufacturing, employing it to produce working prototypes of new models as well as complex parts for luxury cars. The technology is also occasionally used to print machinery for auto plants.

But 3-D printing is not just restricted to these two sectors. “The use of additive manufacturing will, in the foreseeable future, be a key factor determining the competitiveness of all engineering solu-tions,” said Rainer Gebhardt, project manager of the Additive Manufacturing Association within the German Engi-neering Federation, VDMA. “The real add-ed value of the technology lies in the massive performance increase it offers in manufacturing lightweight structures, in the integration of functionalities, which is far greater than with conven-tional engineering and in the shortening of innovation cycles.”

Furthermore, according to market research firm MarketsandMarkets, at around 31 percent, Germany accounted for the largest share of the European 3-D technology market, which in 2013 was valued at $883.84 million and is ex-pected to reach $3.02 billion by 2020, a compound annual growth rate of 17.15 percent.

A SkiLLeD WoRkFoRce

“It’s a technology that requires highly skilled workers, and that’s one of Ger-many’s strengths,” said Professor Gerd Witt, head of the Manufacturing Engi-neering Department at the University of Duisburg-Essen and founder and head of the Rapid Prototyping Committee at the Association of German Engineers. Ac-cording to Professor Witt, three of the five top global players in producing met-al additive manufacturing machinery are based in Germany: EOS Electro Opti-cal Systems based in Krailling near Munich, SLM Solutions in Lübeck, and Concept Laser in Lichtenfels in Bavaria.

Formlabs meanwhile, is pleased with its decision to locate its European distri-bution in Berlin. The company expects double-digit business growth in this loca-tion this year and has already increased from four people to seventeen employees in Berlin since last year. “The only limit to this industry is the creativity and imagi-nation of the users,” claimed Sorkin.

And what about Grecia the toucan? Animal rescue center Rescate Animal ZooAve in the town of Alajuela, Costa Rica works to rehabilitate injured wildlife and last year, they enlisted the help of experts who finally managed to fashion and pro-vide a prosthetic beak for Grecia. Now he’s singing again, his hopeful mating calls echoing through the trees — all thanks to 3-D technology.

3-D printing also helps doctors and medical professionals to print 3-D images of the bones they are treating.

The electronic industry‘s innovative, cutting-edge 3-D printer.

3-D printing is a large trend within the digitalization of manufacturing.

Read the Interview at www.gtai.com/markets-germany about medical 3-D print in Germany with Dr. Sandra M. Bütow, healthcare expert at GTAI.

Gabriel Flemming, medical technology expert at GTAI. Together with the Délégation Générale du Québec in Germany, Mr. Flemming supported Dental Wings in establishing its EU HQ in Berlin in 2014 (see interview on page 7).

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GTAI Interview with Dr Eric Klemp, Chief Operating Officer of the Voestalpine Additive Manufacturing Center based in Düsseldorf

get out of it. But you need to have the knowledge first to be able to explore the wealth of potential applications. I hope we’ll achieve exponential growth in 3-D printing, and I think this is likely because an increasing number of players are enter-ing the industry. Which industries are already implement-ing the technology?klemp: It’s already being used in aircraft manufacturing and in the medical sector, for example in the manufacture of dental implants. The next big focus will be on the automotive industry. And even though we might not yet see mass produc-tion of parts in Germany, industry here will benefit from machine tools and ad-vanced production aids.

“germany is among the world leaders in industrial 3-d printing”

through conventional processes. What sets Germany apart from the rest of the world as a location? klemp: Germany is among the world leaders in industrial 3-D printing, both of metal and plastics. We have technological knowledge thanks to our strong industrial base, the right universities and research bodies in this field, as well as production centers that deliver a lot of output. The main players in the market are here. To what extent will additive manufactur-ing revolutionize industrial production? klemp: Additive manufacturing will be a revolution for those people who know how to exploit its advantages. The more you use this technology, the more you will

Dr eric klemp was until the end of March 2016 Commercial Director of the Direct Manufacturing Research Center, an institute based at the University of Paderborn that works together with the leading companies in industrial 3-D printing.

What are the principal advantages of additive manufacturing?klemp: Additive manufacturing en-ables tool-less production of parts. A wide variety of additional value can be integrated into parts, such as new kinds of design with built-in insulation, light-weight elements, damping structures or product protection – with the right know-how. It also permits the produc-tion of parts that cannot be copied

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SiliCon alley Still Sizzling

Investment. The German capital has become a teeming hub of startups that continues to grow dramatically as young entrepreneurs continue to flock to the city. At the same time, many startups founded in Berlin less than a decade ago have grown rapidly, becoming major corporations in their own right.

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berlin’s relatively low rents, youthful appeal, and cultural di-versity have made it an attrac-tive location for creative busi-ness people from around the

globe. The core startup community is maturing and becoming more struc-tured as international investors pour money into promising young firms that could offer the next big thing.

Investments in German startups doubled in 2015 to a record of nearly EUR 3.1 billion, with EUR 2.1 billion go-ing to young entrepreneurs in Berlin, re-ported German financial newspaper Handelsblatt. According to a recent re-port by auditing and consulting firm Ernst & Young (EY), the dramatic growth has made Berlin the capital of Europe’s startup sector, followed by London (which saw EUR 1.7 billion of invest-ment in startups last year) Stockholm, Paris and Hamburg.

A number of high-profile acquisi-tions in the past year have further bol-stered the startup sector. Microsoft, for example, acquired the Berlin-based soft-ware firm 6Wunderkinder, which de-signs and develops a cloud-based, cross platform productivity application called Wunderlist. In January, Rocket Internet SE raised EUR 380 million with a new fund aimed at investing in European In-ternet companies. This Berlin-based group, which builds Internet business models and develops startups around the globe, currently has more than 30,000 employees operating in 110 coun-tries. Among Rocket Internet’s major suc-cesses is online fashion store Zalando, which was founded in Berlin in 2008, went public in 2014, and now boasts more than 15 million customers.

Speaking to Britain’s Guardian newspaper, Nikolas Woischnik, co-founder of several companies including co-working and office space rental ser-vice Ahoy! Berlin, says the city is “much more grown up now. It’s becoming more professional.” He adds that bigger global companies are moving in and a lot of top talents from the first wave of start-ups are now starting up new companies.

TARGeTeD inVeSTMenT

While the number of startups is vast and growing, investors have been very selec-tive in targeting specific types of compa-nies. Last year, 371 young German com-panies obtained risk capital investment. Of those, only 48 received funding in the two-digit million range. Online lending companies and food delivery services were the most popular among investors.

The Berlin startup that acquired the biggest piece of the investment pie was Delivery Hero, securing EUR 586 million. The online food-ordering ser-vice operates in 34 countries, including China, South Korea, and nations in the Middle East and Latin America.

Other startups to secure funding in the three-digit million range included on-line lender Kreditech, Zencap, a peer-to-peer lending platform aimed at small and medium-sized businesses, Foodpanda, an online food delivery company operating in 24 countries in Asia, the Middle East, and Eastern Europe, and Hello Fresh, which delivers ready-to-make fresh food to its subscribers in Germany, Austria,

the United Kingdom, Belgium, Nether-lands, the United States, and Australia.

In February, the private investment firm of Russian billionaire Oleg Boyko acquired a share in fintech company Spotcap. The startup, part of the Rocket Internet group, provides credit of be-tween EUR 500 and EUR 500,000 to small and medium-sized companies.

WHAT ATTRAcTS inVeSToRS?

The startup sector’s leading backers are mainly institutional investors, insur-ance companies, pension funds, family offices, and angel investors.

EY partner Peter Lennartz tells Han-delsblatt that among investors, the will-ingness to take risks and the pressure to invest is bigger than ever. The sharp fluctuations in the stock markets, the continuing low interest rates, and the enormous importance of digitization have made young technology compa-nies increasingly attractive investment opportunities.

Investors appear most attracted to

companies focused on consumer services and e-commerce, which accounted for most of the capital investment in start-ups last year — some EUR 1.8 billion. The fintech sector, which is creating major online competition for banks and insur-ance companies, came in second place. Of particular interest was the field of robo advisors: online wealth manage-ment services that provide automated, algorithm-based portfolio management advice.

DiVeRSe Scene

Major companies and investment groups are also eagerly exploring the vast diver-sity of Berlin’s startup scene. Goldman Sachs became the largest shareholder of Berlin-based Mister Spex last year after buying a substantial stake in the compa-ny for a reported EUR 36.5 million. An online retailer for branded eyewear, Mister Spex operates in Germany, Scan-dinavia, Austria, France, and Spain. Among the company’s other sharehold-ers is venture capital investor German Startups Group. Launched in 2012, Ger-man Startups Group acquires shares in promising young firms. It focuses on companies in the German-speaking re-gion with products or business models that represent “a disruptive innova-tion,” allowing for a high degree of scal-ability. German Startups Group says its investment portfolio reflects a cross sec-tion of extremely promising German startups in various stages of maturity and includes successful Berlin-based firms as Delivery Hero, reBuy, an online marketplace for buying and selling used items, eWings, an online booking plat-form for business and first-class flights, and TVSmiles, which operates an app that rewards users for interacting with TV and digital ad formats.

The German entertainment industry also piqued the interest of French media group Webedia, which earlier this year acquired Berlin-based Flimmer GmbH, a film sector startup launched in 2012. Originally started as a film trailer web-site, Flimmer has since developed into an innovative, cross-disciplinary platform for marketing movie releases. The com-pany designs and carries out media cam-paigns and events for leading European and U.S. film distributors.

bigger global companies are moving in and a lot of talents from the first wave of startups are now starting new companies.

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targetS by 2050Greenhouse gas emissions -80% (relative to 1990 levels)primary energy consumption -50% (relative to 2008 levels)Gross electricity consumption -25% (relative to 2008 levels)Share of gross electricity consumption from renewable energies 80% Share of gross final energy consumption from renewable energies 60%Almost climate-neutral building stock by 2050 Final energy productivity improvement 2.1% p.a. Final transport energy consumption -40% (relative to 2005 levels)

Energiewende. Germany’s energy system is changing fast, technology is developing at rapid speed and the knock-on effects for many industries are vast. But so are the opportunities.

it is difficult to keep up with the pace of change in Germany’s energy sys-tem. The Energiewende (Energy Transition) has become far more than just switching off a few coal-

burning or nuclear power stations and leaving renewables in their place. The transition has affected transport, con-struction, big data and finance among many other sectors, all either being dis-rupted or needing to design completely new business models to keep up with the advancing technology. Entire value chains have sprung up, while the relent-less change and innovation required to

achieve the policy’s ambitious targets (see box) is keeping the industry’s value chain alert and looking for improved ef-ficiency, affordability and output. The result is a huge number of new compa-nies and research projects taking differ-ent pathways but heading in the same direction, pushing the boundaries of en-vironmentally friendly energy produc-tion and usage further.

As renewables in Germany already account for about 30 percent of annual electricity production, the real challenge has moved from generation to integra-tion of renewable power, for instance, matching supply and demand intelli-gently when the share of renewables is very high. How to solve this problem will be shown on a large scale with the SINTEG (Smart Energy Showcases - Digi-tal Agenda for the Energy Transition) project starting this year. It is the latest development and pilot Energiewende program announced by the German Fed-eral Ministry for Economic Affairs and Energy (BMWi). EUR 230 million of pub-lic funding has been provided, and with a potential EUR 360 million from private investment, an overall fund of EUR 600 million is anticipated.

In five large model regions, that have been preselected, SINTEG will develop and demonstrate exemplary solutions for a flexible, responsive, and secure energy system with high proportions of inter-mittent power generated from wind and solar energy. The programs focus broadly

on smart grids, which should help to en-sure stability and improve the interplay of power generation, consumption, and storage as well as balancing the energy dynamics between city and surrounding countryside. Using modern information and communications technologies and new market mechanisms to set the right incentives, the five SINTEG projects ad-dress key challenges of the energy transi-tion. They also show what a renewable energy system could look like all over Germany: a future where the heat, pow-er, and transportation sectors are smartly linked and even urbanized regions can decarbonize. Industry, utilities, and pub-lic bodies have set up consortia to imple-ment innovative solutions as well as wel-come further partners that fit the con-cept.

“All five projects are great opportu-nities for testing, for creating micro ver-sions of the Energiewende and allowing us to see the future of the integration of renewables into the grid on a massive scale,” said Thomas Grigoleit, Director of Energy, Environment and Raw Materials at Germany Trade & Invest. “The Paris Agreement was a huge step for renew-able energy globally, meaning the Ener-giewende has a big role to play now. Proj-ects like SINTEG definitely create a learn-ing centre for the industry.”

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So let’S Have a CloSer look at tHe Five projeCtS:

WindnoDe: The

Shop Window for intelligent energy from north-eastern Germany

Location: Brandenburg, Berlin, Mecklenburg- Vorpommern, Saxony, Saxony-Anhalt, Thuringia

Companies already involved: 43 Bringing together all five former Eastern German states and

the capital city Berlin, this project spans the zone covered by 50Hertz (with exception of Hamburg). It aims to digitally network the grid in order to use renewable capacity, power grids and energy consumers with optimal efficiency. Con-

crete targets include the development of new products and services which expand the abilities of the quantity-

based energy sales systems, along with the creation and protection of consumer protection and data

security standards.

c/Sells: Large-

scale Showcase in Solar Axis southern Germany

Location: Bavaria, Baden-Württemberg, Hessen-Companies already involved: 64

C/Sells aims to demonstrate the integration of an energy system consisting of regional cells interacting with each

other. The cells are of wildly-differing sizes, ranging from individual properties to entire distribution zones. Each cell attempts to balance its energy supply and demand locally,

subsequently redistributing excess energy through autonomous trading with other cells that need it. The

projects span 1,200 MW of electric power, 1 million users, 15,000 decentralized solar installations, 200

electric vehicles, 1,000 controllable electric heating installations and 60 other

controllable installations.

Designetz: Bau-

kasten energiewende: From Single Solutions to the

efficient System of the Future

Location: nordrhein-Westfalen, Rheinland-pfalz, Saarland

Companies already involved: 35 Designetz demonstrates optimized use of flexibility within the market: a grid and energy system across three states,

developing solutions such as the use of energy readily avail-able from sun and wind sources to provide a supply of power

to load centers. A hierarchical system is used in which flexibility requests are moved from superior network

levels to lower level ones. 140,000 monitoring systems will analyze the data in those lower levels and send

prognoses for the network conditions and pos-sible flexibility up the hierarchy.

neW 4.0: north

Germany energy Transition

Location: Schleswig-Holstein, HamburgCompanies already involved: 43

Hamburg, a city state, has a huge energy demand while its northern neighbor is a large wind-energy producer. This

project aims to optimize the balances between production and consumption in both states, using more developed market mechanisms and improved technology. Within a double-

strategy framework, the plan is to reduce curtailment of wind energy production through improved export of wind energy

on one side, and innovative flexibility concepts that improve local consumption on the other. This

improved flexibility is to be achieved by regulating consumption through load management,

storage systems and sector coupling.

enera: The next

Big Step in the energy Transition

Location: niedersachsen

Companies already involved: 30This venture aims to create answers and solutions for the

change from a centralized to a decentralized system. It addresses three subjects: grid, market and data. By

upgrading producers, consumers and storage systems, and improving the condition of the grid with new resources, the energy system becomes more flexible. Through decentral-ized installations it should become easier to stabilize the

grid locally, thereby improving the reliability of the future power supply. Regional systemic services

would become tradeable on the energy markets and the trade in the markets

would expand to include regional information.

location


Beverage Industry. The German capital will serve as the European center of opera-tion for Stone Brewing Co. from the United States.

CaliFornian breWing

> conTAcT

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California-based Stone Brewing Co. has become the first American craft beer maker outside of the United

States to independently own and operate a brewery in Europe.

In expanding its fast-growing busi-ness overseas, the company chose Berlin to be its new European site. Stone is in-vesting USD 25 million (EUR 22.2 million) to transform a historic gasworks complex in the Berlin district of Mariendorf into a brewery, restaurant, and gardens cover-ing more than 9,300 square meters of in-door and outdoor space. The new facility is set to open this spring.

Finding the ideal location wasn’t easy. Stone looked at more than 130 sites in nine countries and several others in Berlin before deciding on the Marienpark industrial area. The company was search-ing for large historical buildings with “a

classic European character.” The Berlin brewery is Stone’s first facility outside of the United States. It will serve as the com-pany’s continental hub, from which it will distribute its unique beers through-out Europe.

SiGniFicAnT GRoWTH

Founded in the city of San Diego in 1996, Stone has become the ninth largest craft beer brewery in the United States follow-ing strong growth rates that have aver-aged in the low 40s since its launch.

With its 100-hectoliter brewhouse in Berlin, the company aims to sell nearly 6,000 hectoliters in its first year, a figure that pales in comparison to the nearly 350,000 barrels Stone sold in the United States in 2014.

Stone CEO Greg Koch says the Euro-pean production site will provide a num-

ber of advantages, with freshness being of particular importance. “Stone’s beer is unpasteurised and has no stabilisers or chemical additives, so brewing it in Ber-lin for the European market makes sense,” says Koch. Not having to ship it half way across the world also keeps costs down while also minimizing its environ-mental impact.

RiGHT on TRenD

Germany’s own craft brewing sector, while still small, is growing rapidly. Ac-cording to the Federal Statistical Office, the number of breweries (including small craft brewers) with annual production ca-pacities of 5,000 hectoliters or less, grew from 822 in 2006 to 933 last year. Howev-er this still accounted for a mere 0.9 per-cent of Germany’s total beer production, with craft brewers making up an estimat-ed 0.2 to 0.5 percent. Among microbrew-eries with annual capacities of just 1,000 hectoliters or less, the growth was even more dramatic – from 523 to 677 in the same period. Marc-Oliver Huhnholz, spokesman for the Deutscher Brauer-Bund, Germany’s brewers’ association, notes that craft beer remains very much a niche market in Germany, but he adds that the increased interest is a welcomed trend that highlights the origins of Ger-man beer culture. “Craft beer was being brewed in Germany long before the term was even known in the United States.”

Indeed, German breweries boast 50 styles and some 5,500 different types of beer, so the idea of an American brewery setting up shop to make and sell beer in a country synonymous with the product may seem ill-conceived, but Koch appears to relish the challenge. He expresses con-fidence that Stone’s brews will delight Eu-ropean beer drinkers, at least some of them. “I’m used to people not liking our beer because not everybody is accus-tomed to big character, very flavorful, very aromatic beer. But once they do dis-cover it, they often fall in love.”

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Defending Data. While the EU is passing new laws to strengthen, standardize and simplify data privacy and protection, Germany offers investors Europe’s best hosting infrastructure and the legal safeguards that customers and companies demand.

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Having lived through two surveil-lance states in the last century, Ger-mans are highly attuned to privacy

issues. In addition, revelations about how intelligence agencies and compa-nies can access their online data have only made Europeans more vigilant.

It’s important to remember that data privacy and protection is regarded as a fundamental right in Europe rather than just a privilege. Two-thirds of Europeans are concerned about not having complete control of the information they put on-line. And, realizing this, three-quarters of all companies using cloud services in Ger-many insist that the data is stored and processed in the EU or Germany. In fact, offering “Stored in Germany” services has become a popular selling point.

Still, businesses operating in Europe have faced a patchwork of regulations for years, with each country having its own data policies, laws and watchdogs. But all this is likely to change soon, as the EU has introduced the General Data Protection Regulation, which sets forth harmonized, common rules on consum-er rights and company obligations, as well as one supervisory authority, re-gardless of where data is processed. If EU lawmakers approve the legislation, by 2018, investors will face a lot less red tape, expense and confusion.

These disadvantages were highlight-

ed last October, when the EU’s top court invalidated the 15-year-old “Safe Harbor” pact. Some 4,500 companies had been us-ing it to transfer digital data on EU resi-dents to US-based servers, but the court deemed the US data protection regime in-adequate. In early February, however, US and EU officials struck a new deal, the EU-US Privacy Shield, which will allow the free flow of data as long as US officials provide annual assurances that its law enforcement and intelligence agencies are not given indiscriminate access to it.

GoinG LocAL

The deal awaits approval on both sides of the Atlantic. But while the particular country and its laws still matter, several firms have been avoiding complications by “going local”. Amazon and Oracle, for example, are building their own cloud-service data centers in Germany, and Mi-crosoft has forged a novel “trustee” rela-tionship with a Deutsche Telekom sub-sidiary to store its European customers’ data on European soil.

Germany is the smart choice for go-ing local. First, it is Europe’s top data-center location, offering 178 colocation data centers, and massive investments in recent years have only consolidated that position (see graphic). Second, its data privacy and data protection laws are considered among the strictest in Eu-

rope – and until the aforementioned laws and agreements go into effect, a company will still have to store its infor-mation and have a subsidiary in Germa-ny if it and its customers want to fully enjoy these protections. Third, being “on the ground” in Europe’s top market im-proves search-machine rankings and of-fers quicker reaction times to address problems and meet customer desires. And, lastly, Internet infrastructure is set to get even better, as Germany’s govern-ment aims to make high-speed Internet available nationwide by 2018.

data Center germany (2015)Physical servers: to approx. 1.8 million + 6 %IT hardware expenditures: euR 7.2 bn + 3.5 %Storage hardware: + 6 %Investments in modernization and new construction: approx. euR 900 million + 10 %Share of European market (in terms of capacity): #1 approx. 25%Share of data center space used for cloud services: approx. 15% (est. 35% by 2020)

Figures compared with 2014

Source: Borderstep Institute

Stored

in germany

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Big Data. Managing the increasing amounts of data generated the world over is serious business and brings huge challenges. But where there are challenges, there are also opportunities.

CrunCHing numberS

every day more than 2.5 terabytes of new data is generated by everything from smartphones and intelligent

factory equipment to power grids and networked vehicles. And the volume of data we produce is expected to double every two years.

Managing the mountains of data presents enterprises with a huge chal-lenge. However, with the right analytical methods, these datasets can prove treas-ure troves of knowledge that enable busi-ness to react faster, increase productivi-ty, and operate more efficiently.

“Big data analytics describes the rap-id evaluation of large volumes of data from various sources,” says Henri Troil-let, software industry expert at Germany Trade & Invest. “New data storage and processing technologies are enabling companies to combine information such as sensor readings from machines in pro-duction lines or insights from a custom-

er management database and even exter-nal data sources to make better predic-tions and better decisions,” he continues.

Germany is the single largest soft-ware market in Europe and its big data solutions segment is flourishing: Exper-ton expects the sector to reach a volume of almost EUR 3.2 billion by 2019, repre-senting compound annual growth of 23.75 percent from 2015. While the group identified 138 providers of big data products and services in Germany in 2014, by 2015 this figure had risen to nearly 250.

“For international companies look-ing to invest in the German big data mar-ket, major opportunities exist in hard-ware and infrastructure, bandwidth and related acceleration services, and data-base and analytics technologies in partic-ular,” says Troillet. “SMEs are also driv-ing demand for software solutions and represent a significant customer base.”

Recent figures from the ICT industry association Bitkom show that Germany’s car manufacturers and insurers are lead-ing the pack when it comes to harness-ing high-end big data analytics. Twenty-one percent of the companies surveyed in these industries employ high-end data analytics. The chemical and pharmaceu-tical industries followed closely, both at 20 percent, just ahead of the energy branch at 19 percent.

poSiTiVeLy BooMinG

“The year 2015 saw a number of German businesses move from pilot studies to putting big data solutions into practice,” says Troillet. “Throughout 2016 we will see big data being adopted by many more enterprises. Those that are behind the curve are waking up to the opportunities and we are seeing them enter the market as buyers too.”

While the range of industries em-

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ploying big data solutions in Germany is broad, the range of applications they have found is broader still. A recent Fraunhofer IAIS study found that while retailers focus on forecasting sales, moni-toring the market, and prudent manage-ment, the manufacturing and services sectors focus on predictive maintenance and innovative and improved products. Meanwhile, banks and insurers are using big data primarily to identify fraud and assess risks.

Furthermore, the range of applica-tions is still expanding. Industrie 4.0 – with increasingly networked and auto-mated plant machinery enabling new levels of efficiency and highly individual-ized products and services – is creating new opportunities in the manufacturing sector in areas such as predictive mainte-nance and supply chain optimization.

Germany’s transition to renewable energy and its increasingly decentralized electricity supply would be unthinkable without big data analysis. Intelligent components such as smart meters, smart home appliances, smart grids, and even

networked domestic battery storage are making innovative business models pos-sible.

In mobility, networked vehicles and infrastructure such as traffic manage-ment systems, roads, bridges, and toll systems are creating information. Poten-tial big data uses could involve improv-ing traffic flows, car-sharing services, and real-time public transportation apps.

HeALTHy DATA

Big data is also changing the healthcare sector, with medical technology, clinical research, and biotechnology all benefit-ing from new insights. There are poten-tial applications in diagnosis and treat-ment that enable individualized patient care and improved therapies.

Data sovereignty, data protection, and data security are of central impor-tance in any big data approach. For man-ufacturing companies sharing data across corporate boundaries with suppli-ers, and for patients receiving care from their doctor, privacy and choice are para-mount. It must also be ensured that data

is processed in a legally compliant way. These are all aspects being looked into by the German government, for example through the Federal Ministry for Eco-nomic Affairs’ Smart Data program.

From marketing and finance to smart manufacturing and healthcare, big data is enabling innovative business models and new ways of creating value in almost all areas of enterprise as well as our personal lives.

“It is more than just a buzzword,” says Troillet. “Big data is a young and dy-namic field but it is probably the most important concept in the digital world today. Data is the resource of the future and German businesses are looking for the best ways to harness it. Germany Trade & Invest is here to help interna-tional companies that want to deliver those solutions.”

tHe german big data market

297

377

459

542

626

594

679

1,552

1,893

417

506

971

1,246

325 723

Source: Experton Group

2015

2016

2017

2018

2019

Hardware

Software

Service

(numbers in millions of euros)

industry


> conTAcT

[email protected]

Companies such as Sonnen, Deutsche Energieversorgung, SMA, Solarwatt, and E3/DC have installed more than

30,000 energy storage systems in German households. Now German car manufactur-ers are getting in on the act: the Daimler subsidiary Deutsche ACCUmotive brings expertise to the market and BMW has launched a collaboration with Solarwatt.

The growth has been remarkable: annual household battery installations increased from around 3000 in 2013 to almost 20,000 in 2015. There has been a ten-fold increase in cumulative installa-tions in two years – outstripping even the most optimistic predictions.

“The business case for battery stor-age is becoming ever more compelling,” says Tobias Rothacher, solar and battery storage expert at Germany Trade & In-vest. “Research suggests Germany could see more than 100,000 photovoltaic bat-tery system installations by 2018.”

econoMic SenSe

German households receive a fixed 20-year tariff for electricity they sell to the grid. For new systems, the tariff has fall-en to 12.31 euro cents per kWh. With electricity from the grid now costing around 29 ct/kWh, selling power to the grid and buying it back later no longer makes sense once equipment costs are factored in.

The solution is to use more power from the panels and less from the grid.

Families are often at work or school when the sun is strongest. It is not until the evening that appliances get used, fridges opened, and TVs watched. For an average rooftop system, an own-consumption rate of 30-40 percent is normal. With bat-tery storage, households can use power generated during the day at other times, in most cases enabling own-consumption rates of 60-80 percent.

A MARkeT SeT To SoAR

New sales are already skyrocketing and innovative leasing models and system configurations are being introduced. Add-ing storage to existing panels also makes sense, especially those installed between 2009 and 2012 for which the government still pays a bonus for own-consumption. And with more than one million photo-voltaic systems exiting the 20-year feed-in

tariff by 2033, the retrofit market will also develop in the coming years.

A number of unique incentives are available for photovoltaic-battery sys-tems in Germany. The state-owned KfW development bank has reintroduced a fi-nancing scheme that provides attractive loans and repayment grants of 25 per-cent on eligible costs, sinking to 10 per-cent by the end of 2018. Generous local programs are also available, such as SAGA in Dusseldorf, which offers a EUR 500 grant for a typical household solar installation and covers 20 percent of the gross cost of battery storage. Additional-ly, in certain cases in Bavaria, the “10,000 Roofs” scheme offers up to EUR 8,000 for a household solar installation that in-cludes energy storage.

Germany provides an excellent envi-ronment for companies to develop and refine new storage solutions and it ac-tively welcomes international enterpris-es seeking to participate in this rapidly developing market. Businesses investing here also stand to benefit from the dense landscape of world-leading research in-stitutes and universities that cooperate with the energy storage industry to bring innovations and new technical standards to the market, often with gov-ernment support.

Energy Storage. With the unveiling of Tesla’s Powerwall, global media has woken up to the potential of combining domestic photovoltaic systems with battery storage. Yet in Germany the revolution is already well underway.

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Shared Services. Outsourcers are increasingly setting up in Germany, to be able to better meet their German customers’ demands for quality and data sensitivity.

ServiCeS made in

germany

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Shared services and Business Process Outsourcing (BPO) are increasingly important in Germany and neigh-

boring Austria and Switzerland. Accord-ing to the consulting firm Pierre Audoin, a third of all companies with more than 500 employees in this region were al-ready planning outsourcing activities in 2015, 90 percent of those activities in BPO as opposed to IT (IT outsourcing has been the norm for a while now, the cur-rent market value of IT services was some EUR 37 million in 2015). Even more com-panies active in Germany now use inno-vative concepts to operate their back of-fice and non-core functions more cost-efficiently. Delivery centers are also being built in Germany, to add German native-speaker competence and intercul-tural knowhow to their service offerings, especially for German customers to use.

There is increasing interest in so-called ‘second-tier cities,’ both to access new pools of workers and create new and better cost conditions. International com-panies are joining in such as Sitel, a glob-al BPO company from Nashville, Tennes-see currently employing more than 4,000 employees at eight locations in Germany. The opening of the most recent office in Magdeburg (population: 231,000) in Feb-ruary 2015 clearly demonstrates the de-mand for ‘Services Made in Germany’.

The current expansion of the indus-try also shows that, contrary to the pre-dictions, the introduction in Germany of the minimum wage of EUR 8.50/h at the start of 2015 has not led to any great change in the industry.

Top WoRkFoRce

Many well-educated and loyal workers are available at reasonable prices, as a re-sult of the dual work-education system. This system offers highly-qualified spe-cialist staff who do not necessarily have a university degree. Work satisfaction as a result is much higher, which in turn lowers staff turnover, resulting in lower costs for training new workers and en-suring a more efficient operation center.

The labour market in Germany is generally showing positive trends in terms of both supply and demand. The contribution-paying workforce is in-creasing, while the current unemploy-ment rate in Germany is at a healthy 6.5 percent. There is a perceptible ‘scrap for talent’ in the service provider industry. As a result of competitive pressures in-ternationally, in terms of wages, Ger-man BPO providers are looking at alter-native means of making themselves at-tractive, including flexible working hours, shift patterns, workplace add-ons and a strengthening of the ‘work from

home’ concept. A highly-developed digi-tal infrastructure in Germany makes all of these easily achievable.

Customers for cloud service solu-tions are a little more hesitant. Even though more scalability, more flexibility, and quicker reaction speeds are available, safety concerns are the problematic fea-ture. Customers are especially sensitive regarding data protection. A survey by the consultancy Interactive Intelligence showed that 87 percent of cloud-inclined companies (with 500+ employees) would prefer to keep sensitive data in-house, and that two thirds would only trust a cloud service provider if their storage center was in Germany.

Just as safety-oriented is the BPO sec-tor. Not only in Germany, but companies in general will only outsource processes to service providers they trust. Most Ger-man companies, particularly those in the mid-size sector, expect a service pro-vider on location in Germany. So it ap-pears to be in the interest of internation-al providers to set up shop in Germany. This is imperative for operations and highly recommended for service provi-sion.

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Alternative medicine. For centuries humans have looked to the power of nature to soothe and heal. And some healing methods go beyond the medical to include complementary, spiritual and natural remedies. Such treatments are increasing in popularity in Germany.

HoliStiC point oF vieW

traditional systems have devel-oped over time that take a holistic view of the healing process by considering not only the physical but also the psychological and

spiritual levels. Popular examples in-clude traditional Chinese medicine, ho-meopathy, osteopathy, and acupuncture.

The efficacy of many of these practic-es has not been proven according to the standards of evidence-based medicine. Nevertheless, complementary and alter-native medicine have enjoyed remarka-ble popularity in Germany for a number of decades. With stress-related issues and chronic conditions becoming increasing-ly common, Germans are looking ever more to traditional alternatives.

Sixty-three percent of the German population have used complementary medicine, according to a study by the Bertelsmann Foundation. The most com-mon users are between 40 and 59 years of age, female, and have high levels of ed-ucation and income. The most popular treatments were found to be natural remedies and plant-based medicines used mainly to treat temporary illness, followed by homeopathy.

Interest in complementary alternative medicine was piqued last year when Tu Youyou was awarded the Nobel prize in physiology. In the 1960s, with chloroquine and quinine no longer proving as effective at treating malaria, Tu looked to tradition-al herbal medicine for inspiration. Her broad study of old Chinese remedies sug-gested that the plant Artemisia annua – or qing hao – could contain an effective ac-tive substance. Her study of ancient texts guided her to extract what was later named artemisinin, which is used today in standard medical treatments for malaria.

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Melanie Wiegand is Germany Trade & Invest’s leading expert in the field of demographic change. She identifies innovative business fields and future markets for Germany. Before joining Germany Trade & Invest, Melanie Wiegand worked for major multinational companies in various senior strategic marketing positions, developing health-care products and services for leading brands in international markets.

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Issue 1 / January 2015

The Business Magazine

marketsGermany

A new reform makes Germany’s

Energiewende more affordable,

plannable, and secure for investors.

Great

eXPeCtationS

Oil Over

Germany aims to achieve a sustain-

able bio-based economy by 2030. p13

Worth More Dead Than Alive

aircraft recycling becomes a lucrative

niche market as fl eets age. p14

State of Health

Health-care and medical profession-

als catch up with digitization. p18


marketsGermany

INDUSTRIE 4.0

What’s Cooking?

Consumer trends within the food

and beverages industry. p13

World of Wonders

A summary of FDI investment in

Germany. p16

50 Years of Diplomatic Relations

Talking to the Israeli ambassador

to Germany. p20

INDUSTRIE 4.0Automation Nation: INDUSTRIE 4.0 is set to entirely revolutionize manufacturing.

willkommen to germany

The do’s and dont’s in German

business culture.

p12

with a flawless smile

The German dental market grows

at home and skyrockets abroad. p18

welcome to the future

A glimpse of the smart factories of

tomorrow, INDUSTRIE 4.0. p26

smart countryintelligent living: cities get smarter as

the energy revolution takes hold.

issue 1 / January 2016

the Business magazine

groWing requirementSResearch into growing plants for tradi-tional Chinese medicine has been carried out in Germany. Such crops are grown in Germany according to GAP guidelines, meaning that products can be traced back to a particular field and batch of seeds. No pesticides or herbicides have been approved for such plants. Under certain conditions, substances can be created that meet both Chinese require-ments and European pharmacopoeia ref-erence standards and that are recom-mended by leading doctors in the field of traditional Chinese medicine.

“Experts have estimated that Germa-ny’s traditional Chinese medicine market alone is worth more than 3 billion euro annually,” says Melanie Wiegand, health-care market expert at Germany Trade & Invest. “It is clear that the TCM market here is booming,” she says.

Germans are estimated to have spent an incredible EUR 0.5 billion on homeo-

titioners known as Heilpraktiker may carry out complementary and alterna-tive medicine. It is estimated that there are 35,000 Heilpraktiker in the country.

“The German market for comple-mentary and alternative medicine is of growing interest for international com-panies,” says Wiegand. “The out-of-pocket healthcare segment, in particular, offers huge opportunities.”

pathic substances in 2013 alone. Eighty percent of these substances were pur-chased directly from pharmacies with-out a prescription – so-called out-of-pock-et purchases.

According to a Roland Berger study, every adult in Germany spends an aver-age of EUR 900 on their health each year in addition to monthly insurance contri-butions. “Many alternative and compli-mentary practices and products are paid for by patients out of their own pockets,” says Wiegand. “The country’s out-of-pocket market as a whole is estimated to be worth more than EUR 40 billion. Growth has been extremely promising at a rate of four percent per year for more than a decade.”

Germany offers investors in comple-mentary and alternative medicine a number of unique advantages. Nine out of ten Germans are covered by one of many public health insurance funds, with the remainder insured privately. German law requires certain comple-mentary and alternative procedures to be covered by public insurers, such as ac-upuncture for chronic lumbar pain or os-teoarthritis of the knee. However, many public funds now provide additional cov-er for other complementary and alterna-tive treatments.

An interesting factor is that there are around 16,000 medical doctors in Germany who have completed extra training courses in complementary and alternative medicine. They may use the title Arzt für Naturheilverfahren, mean-ing doctor for naturopathic treatment, in addition to their medical title. Fur-thermore, in Germany non-medical prac-

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germany’s pharmacies are in a unique position to exploit the trend towards self-medication. One reason

is down to tradition. An Apotheke is still the first place a person goes if they need medicine in Germany. Pharmacies are unlike the big health and beauty supply chains in the United States or the United Kingdom, where non-medical items such as make-up, hair dye, and laundry deter-gent are also sold. Pharmacists in Ger-many specialize in drugs – from aspirin to zyrtec™, and what is more, by law, these products must be dispensed by trained professionals from pharmacies, either in shops or online.

Add to that the Germans’ confidence in pharmacists’ recommendations and it becomes even clearer. People who sell medicine in Germany must be highly qualified, trained professionals. Many people say, especially when self-medicat-ing, that a trip to the Apotheke can often

be more informative and less time con-suming than a visit to the doctor.

Walter Pechmann, a key account manager at the marketing research com-pany GfK said, “The recommendation from a pharmacy to buy a specific medi-cine is a decisive factor in patient deci-sions to buy a certain product.” He cited statistics indicating 20 percent of OTC sales can be traced back to a pharmacist’s recommendation. By contrast, a doctor’s recommendation played a role in only 14 percent of OTC purchases.

Pechmann added that consumers tend to use online pharmacies to buy more expensive OTC drugs that are part of a planned therapy regime, yet when it comes to cold medications, painkillers and other products that patients use to treat acute conditions, the “brick and mor-tar” pharmacy shops have the upper hand.

Healthcare market specialist at Ger-many Trade & Invest, Melanie Wiegand

total medicine Sales in germany in 2015 euR 38 billion (+6 %) – total sales for all medicines euR 33 billion (+6 %) – total sales via retail pharmacies including mail order

total otC Sales in germany in 2015* euR 8.088 million (+7 %) – total OTC sales via retail pharmacies including mail order

Figures compared with 2014; *based on effective consumer prices Source: IMS Health

Over the Counter (OTC). People in Germany have been self-medicating more and more in recent years. Sales of prescription-free drugs are increasing at pharmacies and through online mail order services. Why?

explained, “The classic pharmacies enjoy a very strong market position and Ger-man consumers love their pharmacies. Non-prescription healthcare products in particular are being purchased more and more frequently on-line.” Wiegand add-ed, “I expect this trend to continue, be-cause people in Germany are very health-conscious and more and more people are positive about buying things online.”

With appropriate market knowl-edge, Germany offers huge opportuni-ties for pharmaceuticals sales, whether they are OTC or prescription products. After all, OECD statistics for outlays on medicinal drugs show that Germany leads Europe, with an annual spending of nearly a third higher than the Europe-an average.

pHarmaCieS in germany play key role in otC SaleS groWtH

The Lions – pharmacy in Trier is the oldest pharmacy in Germany. it was first referred to in writing in 1241 and has been family-owned since 1660.

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“oH, i do like to be beSide tHe SeaSide!”Wind energy. Things are booming for the North Sea port of Cuxhaven, which is becoming a key site in Germany’s Energiewende, with the energy revolution aimed at weaning Europe’s largest economy off fossil fuel by 2050.

the industrial group Siemens chose Cuxhaven last year as the location for a EUR 200 million investment in a

wind turbine manufacturing plant that will create an estimated 1,600 new jobs — 1,000 at Siemens and some 600 at compo-nents suppliers.

Cuxhaven beat competition from around Europe to be chosen. One of its benefits is its location near the mouth of the river Elbe, in deep water close to the main shipping lanes.

As the plant will be located at the edge of the port, heavy components can be loaded directly onto ships, saving the cost of transporting huge parts by road. The plant will be the size of roughly 24 soccer fields.

“The decision to build a new produc-tion facility in Cuxhaven represents a clear commitment to Germany as a busi-ness location,” says Joe Kaeser, the CEO of Siemens.

Construction work has already start-ed and the factory is due to start produc-tion in mid-2017. Engine housings, so-called nacelles, will be assembled for the next-generation offshore D7 wind tur-bines that will be capable of producing seven megawatts of electricity. Produc-

tion will include the generators, hubs, and nacelle back-ends to form the com-plete nacelles which are the heart of wind turbines.

Cuxhaven is confident that the pro-ject will draw in further investors and strengthen the town’s position as a ma-jor hub for the offshore wind industry.

oFFSHoRe cenTeR

In fact, this year, the economy minister of the state of Niedersachsen, Olaf Lies, announced plans to set up the German Offshore Industry Center in Cuxhaven. The project will include an internation-al marketing campaign to attract compo-nents suppliers. The state has said that it plans to support investments with re-gional development assistance including measures to support the construction of the necessary infrastructure.

“With Siemens we will become the biggest industrial location for the wind power industry on the North Sea coast,” said Hans-Joachim Stietzel, the head of Cuxhaven’s Economic Development Agen-cy. “At the moment, Siemens is picking the suppliers and we’re negotiating with them to see how we can support them.”

The biggest challenge is to find quali-

fied workers. Cuxhaven, in conjunction with the Federal Labor Agency, is offering special training courses to provide people with the qualifications needed to work in the offshore industry. It will also send of-ficials to job fairs around Germany to pro-mote Cuxhaven as an attractive place to live and work.

The town and the surrounding re-gion offer a good quality of life. “Cuxhav-en has long sandy beaches and is the big-gest German North Sea spa resort, we have three million overnight stays and 500,000 tourists a year,” says Stietzel. “We’re advertising with the slogan ‘live where others go on vacation.’”

“Economic development has never been this good,” he added with a laugh. “Companies are ringing us up, we don’t need to go out and find them.”

> LeARn MoRe ABouT THe GeRMAn oFFSHoRe inDuSTRy cenTeR

visit the port of cuxhaven, see the areas being developed and discuss the opportunities with local authori-ties and companies. contact us at [email protected]

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Innovation. When Siddharth Mayur’s grandmother was caught in repeated black-outs in her ancestral village, he resolved to solve her energy problem once and for all. It was the start of a seven-year journey that was to lead him to Dresden.

it’s been seven years, We’ve been work-ing on this, since October 2009,” says Siddharth Mayur. He’s sitting at a

meeting room table in the Berlin offices of Germany Trade & Invest where a heavy winter squall is battering the win-dow. It’s a stark contrast to the oppres-sive heat of Mayur’s home in the western Indian city of Pune. He is explaining the driving force behind his groundbreak-ing business project: a solid oxide fuel

cell generator powered by clean energy sources with near-zero emissions. Mayur hopes it will bring energy independence to every farm, village, home and small business.

“It was Deepavali 2009,” continued Mayur. “Deepavali is a very important festival in India, a festival of lights at which you pray to the goddess of wealth. I rang my grandmother who lives in our ancestral village to exchange greetings

and she said she was enjoying the festi-val of lights without lights, because there was no power.”

“It shook me up. I called my friend Amarnath Chakradeo, who was to be-come a co-founder, and told him that we could not accept these unreliable power supplies any more. I wanted pow-er for the people 24/7, and it had to be clean, green, reliable, and affordable for all.”

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imprint

publisher: Germany Trade & Invest Gesellschaft für Außenwirtschaft und Standortmarketing mbHFriedrichstraße 60, 10117 Berlin T. +49 30 200 099-0 F. +49 30 200 099-111 [email protected], www.gtai.comexecutive Board: Dr. Benno Bunse, Chairman/CEO; Dr. Jürgen Friedrich, CEODirector corporate communications: Andreas BilfingerManaging and content editor: Eva Forinyakconsultant editor: Daniel Stephenseditorial Team muehlhausmoers corporate communications: Victoria Nicholls, Emily D’Silva

markets Germany won Gold at the 2015 FoX AWARDS for efficiency in communications.

Design and Layout: muehlhausmoers corporate communications art teamprint: DFS Druck, Colognecirculation: 5,000Distribution: markets Germany is distributed solely by the publisher all over the world.notes: © Germany Trade & Invest, June 2016All information provided by Germany Trade & Invest has been gathered with the utmost care. We assume, however, no liability for the accuracy of the information provided. Articles published under specific names do not necessarily reflect the opinion of the publisher. No reprints may be made without the prior consent of the publisher.order number: 20204

> conTAcT

[email protected]

Determined to push through a cost leadership strategy to maintain his promise of affordable technology for In-dians, Mayur’s search for a research and development partner took him on a roundabout route to Dresden in Saxony, Eastern Germany, and finally to the Fraunhofer Institute for Ceramic Tech-nologies and Systems (Fraunhofer IKTS), one of the world’s leading applied re-search institutes for fuel cells.

Fuel cells have been around the cor-ner for many years, but are now becom-ing more commercially viable, which is good news for the environment as they produce energy with barely any green-house gas emissions beyond water vapor steam. The Solid Oxide Fuel Cells (SOFCs) that Mayur is developing use hydrogen that can be extracted from a variety of abundantly available sources to produce power and usable heat with higher effi-ciency than any other power generating technology.

WeLL-connecTeD

Germany is setting up a network of hy-drogen gas stations for the next genera-tion of fuel cell-powered cars, while a market introduction program and the extensive piped gas network help in-crease fuel cell installations in both resi-dential and commercial premises as part of Germany’s energy transition (Ener-giewende). The depth of research Mayur found at the Fraunhofer Institute swung the decision to invest in Germany.

“We almost ended up signing a con-tract with a USA-based technology com-pany, but my partner Amar met the Fraunhofer people at an expo in Tokyo and it all changed,” reflects Mayur. “I re-alized that these were the guys writing the textbooks on energy, the guys who could attack this problem from scratch.

It wasn’t easy for either party. We con-stantly challenged them. Fortunately they were very open to change, pushing the boundaries, and helping us with our vision by developing a robust, scalable, and efficient fuel cell generator named h2e.”

During the development of the h2e project, Fraunhofer and Mayur entered into a joint arrangement to commercial-ize the fuel cell stacks developed by Fraunhofer IKTS and high performance

materials specialist Plansee SE, stacks which Mayur wants to become the world-wide benchmark for SOFC technology.

Mayur’s company MPower GmbH was set up to produce and commercial-ize the stacks in Germany, from where they can be shipped to India and the rest of the world. As Fraunhofer created the technology and Mayur’s investment helped him acquire the commercializa-tion and production rights, the project is a fine example of a successful Indo-German venture. The cooperation will transfer a key clean energy technology

to India while simultaneously attracting investment into Germany and creating a global market.

A ReVoLuTionARy SoLuTion

“Fraunhofer wasn’t just interested in helping with the technology, it was in-terested in the business case, and is ac-tively pursuing the idea of having a stake in MPower,” says Mayur.

He sees fuel cells as a crucial tech-nology to help Indian farmers trapped in desperate rural poverty access a relia-ble energy source, that will drastically improve their productivity.

“We have created a social solution, using German engineering and Indian entrepreneurship,” he explained. “And now we are the only company in the world looking at solving problems for agriculture with our “BHJurja” fuel cell product, because if you solve the prob-lems linked to agriculture, you solve food security as well.” Mayur says his company will be instrumental in con-verting farms into factories with 24/7 en-ergy available to every farmer, saving them from the inconveniences they fre-quently endure.

If Mayur can deliver continued cost reductions, fuel cells of this kind could be a revolutionary energy solution for the Indian economy, which is likely to be the world’s fastest-growing in 2016.

India’s rural regions, such as the area where Mayur’s grandmother lives, have a new hope that Mayur adds bears the label: “We are developing a technol-ogy which is ‘Innovated in Germany, and Made in India & Germany, for India and the World.’”

“We could not accept these unreliable power supplies any more. i wanted power for the people 24/7, and it had to be clean, green, reliable, and affordable for all.”

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london Calling FDI. Annika Pattberg is from Hamburg and holds a degree in economics. She has served as director of the Germany Trade & Invest office in London since 2014.

What are your responsibilities, and what does your daily schedule look like?On the one hand, I advise British and other foreign companies about entering the German market, and on the other, I explain to German companies how they can export to the United Kingdom. On a typical day, I might start my morning by telling a British service provider about the advantages that the various German federal states and cities have to offer an investor, and then in the afternoon, I could be explaining the subsidies for electric vehicles in London to a German automotive supplier. I see myself as an intermediary between the two business locations and cultures.

Did you have any trouble adapting to life in the uk?Before moving here, I spent five years managing the Germany Trade & Invest office in Romania, where I was also re-sponsible for Bulgaria and the Republic of Moldova. In addition, I lived in the

United States, Lithuania, Serbia, and Russia for longer stretches, so moving to London felt more like coming home. Nearly every culture in the world is rep-resented in this city, after all.

What advice would you give to British investors?Take advantage of the information and consulting services offered by Germany Trade & Invest, completely free of charge!

What questions interest British inves-tors the most? Initially, many of them are looking for our advice on the right location for in-vestment. They also frequently have questions regarding legal regulations, tax laws, and incentives. Additionally, some of them want to know about the current prospects for their industry in Germany. Luckily, I don’t have to answer all of these questions myself; I can al-ways put potential investors in touch with one of our many expert teams at our Berlin HQ. Incidentally, my col-leagues in Berlin don’t just answer in-depth questions free of charge; they also take investors to visit potential invest-ment sites upon request.

> conTAcT

Annika pattbergDirector of GTAI office in [email protected]

What is the biggest cultural difference between the British and the Germans?I hardly ever give a presentation these days without addressing the differences in the way we communicate and with good reason. British people often feel that we Germans are brutally direct, while the British themselves tend to cushion even the worst news with friend-ly, flowery language. A colleague put it this way: “Germans are too direct to be polite. British people are too polite to be direct.” We don’t mean any harm by it, I swear!

What do you love most about the Brit-ish? Above all, I appreciate their relaxed attitude, their sense of humor, and their refreshingly positive, optimistic ap-proach to many things. What I love about London is how people from com-pletely different cultures live together peacefully in such close quarters.

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INDUSTRIE 4.0. Following three previous industrial revolutions – manufacturing, technological/electrical and digital – a fourth revolution of cyber-physical robot-ics is imminent. Germany’s Industrie 4.0 project combines production methods with digital technology to create a digitalization of manufacturing.

29%

79%In the next 5 years, the number of products that companies have digitalized in their product portfolios will increase from 29 percent to 79 percent.

Over 100 organizations with more than 250 participants make Plattform Industrie 4.0 the largest and most diverse network of technologies and manufacturing worldwide

150projects were funded by The Seventh European Research Framework Programme that was carried out by companies and research institutions between 2008 and 2013, in areas such as ICT in manufac-turing processes.

GERMANY HAS THE POTENTIAL TO BE A PRIME INNOVATION AND BUSINESS LOCATION DUE TO INDUSTRIE 4.0, AS AROUND 15 MILLIONS JOBS DEPEND EITHER DIRECTLY OR INDIRECTLY ON THE MANU-FACTURING INDUSTRIES.

1of all European exports are industrial products

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facts & figures

A STRONG PARTNERSuccess in Germany withGermany Trade & Invest

Benefit from our services:

• Market analyses and industry reports

• Business set-up support services

• Incentives and financing information

• Site selection and partner coordination

TALK TO US TO FIND OUT WHAT WE CAN DO FOR YOUR BUSINESS. CALL +49(0)30 200 [email protected]

www.gtai.com

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