Bayernkurier.de, Auf der Jagd nach „Hidden Champions“, by Heinrich Maetzke Translation by Stefanie Friedeborn | Global.Delaware.gov

On the Hunt for “Hidden Champions”

Bavaria’s successful medium sized businesses have brought admirers to the other side of the Atlantic. In order to entice small Bavarian success companies – so-called “hidden champions” – to come to Delaware, Governor Jack Markell has come to Munich. He has an attractive offer: His government wants to help Bavarian entrepreneurs in Delaware in every imaginable way.

No joke: Governor Jack A. Markell, from the small east coast state, Delaware, is on a big wild hunt in Bavaria. He is looking for Bavaria’s biggest and most valuable but also the shy wild. The US governor is on a hunt for medium sized businesses, for Bavarian “hidden champions.”

Economists have coined the term “hidden champions” to call small and medium-sized enterprises found in their niches with special products delivering top quality and are often world leaders. Simply Champions. And Markell knows that in Bavaria there are hundreds of thousands of successful medium sized businesses.

“The goal of the mission is to strengthen the ties with the blooming small and medium sized enterprises in Bavaria and its capital Munich”

Naturally, Markell does not want to lose Bavaria’s small and medium sized enterprises, he wants to entice them to Delaware. Therefore, he came especially to Munich. Where he lead discussions with politicians and especially SMEs (small and medium sized enterprises). To commence his almost one week trip he said this in his written press release at home, “The goal of the mission is to strengthen the ties with the blooming small and medium sized enterprises in Bavaria and its capital, Munich.” Markell’s small delegation trip is a part of the initiative “Global Delaware,” which was presented this year – and Bavaria is the first stop.

“Had a productive meeting with Bavarian Biotechnology enterprises that are interested in coming to USA” - Governor Markell via Twitter @DelawareGlobal

Thursday afternoon he had an appointment in Martinsried. The discussion in the top location for biotechnology enterprises was very important to Markell. “In Delaware, we also have a biotechnology cluster,” said Markell previously at a breakfast in Munich. “I came to Bavaria because of that.” After the visit in Martinsried, he immediately sent out a tweet “Had a

Bayernkurier.de, Auf der Jagd nach „Hidden Champions“, by Heinrich Maetzke Translation by Stefanie Friedeborn | Global.Delaware.gov

productive meeting with Bavarian Biotechnology enterprises that are interested in coming to USA.” The Delawareans should know what their governor is pushing in Bavaria. His visit is a great success for Martinsried and Bavaria because how many US-governors – or prime ministers – know of Martinsried?

Bavaria and Delaware The governor did his homework and he deliberately chose Bavaria: “We are concentrating on Bavaria.” He believes Bavaria and Delaware have a few things in common. Naturally, Bavaria is ten times as big as the just 6447 kilometers (4006 miles) squared big US state with around a population of 900,000. Despite the differences in size, there are in fact similarities. They are both in the middle of a hard journey in an entirely new economic world. Both are succeeding well at adapting to the conditions of the high-tech economy – so-called “new economy”. With a GDP of $61,183 per head, Delaware is the richest US state. In addition, Delaware is one of the few states that has received a Triple-A-Rating by the big rating agencies for fifteen years.

“I want to be with Delaware where Bavaria is.” Both Bavaria and Delaware are in their nations the top business locations: 80% of the American pharmaceutical industry is found in the larger region around Delaware. Delaware has the third highest concentration from IT jobs nationwide. Both Bavaria and Delaware have an understanding that in a fast and constantly changing economy one thing is for sure: They need to be as effective as possible at connecting with the rest of the world. Markell said: “Success for our state in the 21st century means we have to look beyond the borders in order to create jobs and economic opportunities for Delawareans.”

Admiration for Bavaria Even with all the IT and high-tech, Delaware has also stayed quite agricultural: 2500 farms are farming 39% of the state. In 2012, Delaware’s agricultural production amounted 12 million dollars. Additionally, Delaware is the 8th most important Exporter of chicken products in the USA.

“Such a wonderful Park in the middle of the city – that is quality of life” A piece of admiration for the first state comes from governor Markell too: “I want to be with Delaware where Bavaria is.” And he especially likes Munich. Before the breakfast appointment, he rented a bike and biked through the English gardens. He is still shocked: “Such a wonderful Park in the middle of the city – that is quality of life.” Throughout the discussion he comes back to the English garden once more.

Bayernkurier.de, Auf der Jagd nach „Hidden Champions“, by Heinrich Maetzke Translation by Stefanie Friedeborn | Global.Delaware.gov

Entrepreneurially minded head of Government As many American politicians, Markell also has a significant economic background. He was a business economist and worked for the management consultant McKinsey. In the beginning phases of the US mobile operator, Sprint, he was employee number thirteen. Today Sprint is the 4th largest enterprise in its art in the USA, with at least 64,000 employees and 43 million dollars of sales. As finance minister in a democratically governed Delaware from 1998 to 2008, Markell emphasized fiscal soundness and lowered government spending. What Markell – and probably not just him in the USA – understood under fiscal transparency is that he shows a detail as amusing as it is revealing: On the official State of Delaware website he reveals, estimations of what his small Delegation trip to Germany costed: less than 50,000 dollars. In 2008, Markell was elected in the so-called Obama wave, for the democrats, in the small state with a strong 67% of the vote. In 2012, he managed to get re-elected with an overwhelming 69%.

“I would prefer 10 enterprises with 1000 jobs or 100 firms with 100 positions over just one employer with 10,000 jobs.” The governor is described as entrepreneurially minded. Exactly that leads him now to Bavaria’s middle class. Not that he would have anything against big enterprises such as Siemens or BMW – Siemens employed 1000 employees in Delaware. But he means that the big enterprises are “on everyone’s radar”. And by appeal, such a big employer for such a small state is not entirely unproblematic. When the business or the enterprise gets into difficulties, thousands of jobs could be affected in one hit. Delaware already saw this happen with the fall of the chemistry giant DuPont. The enterprise that once employed 17,000 people and today only has a tenth of that. Markell stated “I would prefer 10 enterprises with 1000 jobs or 100 firms with 100 positions over just one employer with 10,000 jobs.” Furthermore, the governor stands for diversification and would be just as glad over employers that can support just 10, 15, or 20 employees. Recognized in Delaware tax determination is an enterprise that invests $200,000 dollars or more and employees 5 or more qualified workers, receives a tax credit.

Assistance for the SMEs that dare to take the step over the Atlantic The “wild” that he is looking for in Bavaria are small enterprises that possibly already have business ties with the USA. Such SMEs are in most cases family enterprises with conservative thinking and very cautious leadership. That is exactly why so many shy away from taking the difficult decision to take the step across the pond. In order to make the decision easier for SMEs, Delaware advertises assistance and all kinds of business services – especially legal services.

Bayernkurier.de, Auf der Jagd nach „Hidden Champions“, by Heinrich Maetzke Translation by Stefanie Friedeborn | Global.Delaware.gov

“In the USA, Delaware is known as an undisputed market leader in the area of enterprises and legal service” The state government maintains that its corporate division in the capital Dover is always ready to react and that experts with advice and assistance are always on stand-by. Furthermore, the small east coast state is known as an undisputed market leader in the area of enterprises and legal service. A big triumph of Delaware is its excellence in administration of justice nationwide. In the USA, firms are always subject to the law of the state in which they are registered. Due to such a good reputation of Delaware’s justice and its judges, there are over a million employers registered there. Among those registered are 65% percent of the 500 biggest worldwide listed corporations.

Small and practical in a prime location Also, from purely geographical grounds, Delaware would probably not be a bad choice for a Bavarian SME, which is debating to dare to take the step across the Atlantic. There are direct flights from Munich to Philadelphia, which is only 20 minutes away from Delaware. “Small is beautiful” and for Delaware that remains true. “Everyone knows everyone here,” says a co-worker of the Governor. It is easy, to bring people together, employers and employees, economists and politicians. Governor Markell likes to talk especially about the many skilled workers in Delaware. The state advertises the 2nd highest concentration of doctorates per resident in the USA.

“In the summer, Washington gathers at the Delaware beaches and makes the federal state the summer capital of the nation.” In addition to its prime location is the equally short distance between Washington and New York. It is possible to have a morning appointment in New York and to be back in Delaware for lunch. Those who prefer to settle down in New York, pay three times as much in rent and twice as much in the average median wage. To get to Washington, you don’t even have to leave Delaware, especially not in the summer, because in the summer the capital comes to Delaware. Everyone that has name and rank gathers in the beautiful holiday villas along the Delaware beaches. This earned Delaware the nickname “the nation’s summer capital.” Translation by: Stefanie Friedeborn