Professional Documents
Culture Documents
Issue 2011/2012
Business Location Germany
Basic Data Area: 357,104 sq. km Population (m.): 82 Number of companies 3.72 million, 99.6% SMEs Total turnover of all companies* EUR 5.36 trillion, 38.0% SME turnover
* Most current data 2008
Others 32.3%
Financial Services, Renting, Business Services 27.3% Commerce, Catering Industry and Communications 15.4%
Economic Development GDP (nominal in EUR billion) 2010: 2,477; 2009: 2,397; 2008: 2,481 Per capita GDP (EUR) 2010: 30,564; 2009: 29,278; 2008: 30,214 Inflation rate 2010: 1.1%; 2009: 0.2%; 2008: 2.8% Unemployment rate 2010: 7.3%; 2009: 7.5%; 2008: 7.3% GDP Growth
(real annual change in percent) 6 4 2 0 -2 -4 -6 2008 -4.7 2009 2010 1.3 3.6
Foreign Trade Foreign trade (EUR bn) Exports Imports Balance Germanys trade relations with EU (EUR bn) Exports to EU Imports from EU Balance 621.3 531.5 +89.8 +0.5 +5.1 489.1 441.3 +47.8 -21.3 -17.0 557.3 515.2 +42.1 +13.9 +16.7 2008 % 2009 % 2010 %
+2.9 +4.3
-18.4 -17.5
+19.4 +21.3
Export goods (% of total exports SITC) 2010: machinery 18.1; motor vehicles and parts 15.9; chemical goods 15.7; electronic goods 9.5; foodstuffs 4.2; others 36.6 Import goods (% of total imports SITC) 2010: chemical goods 12.7; machinery 12.0; electronic goods 11.0; crude oil 7.5; motor vehicles and parts 7.4; foodstuffs 5.7; others 43.7
Sources: Federal Statistical Office, Federal Ministry of Finance, ifm Bonn 2011
AmCham Business Barometer 2011 American business executives highlighted the following factors as the top location advantages that distinguish Germany from its competitors. Economic strength: diversied mixture of businesses Infrastructure: excellent nationwide infrastructure Framework conditions: governmental promotion of forward-thinking industries (e.g. solar and biotech) Human capital: highly qualied workforce, skilled talent pool
Source: American Chamber of Commerce Germany, Boston Consulting Group 2011
Supporting Investment Projects Incentives in Germany are designed to meet the immediate capital needs of investors. Early stage investment nancing provides funding at the beginning of the new investment project. These incentives, mostly provided as cash grants, are important as they guarantee liquidity at a stage in the investment process when investor capital requirements are typically high. Later stage investment incentives are made available in the form of a raft of programs created to support putting together a workforce in Germany (e.g. through wage subsidies) and provide generous R&D project assistance. Incentives in Germany are available to all investors regardless of investor country of provenance. Funding to the tune of EUR 26.3 billion has been freed up by the EU (co-nanced using means obtained from German national and federal budgets) through 2013. As well as this, Germany and its individual federal states also make their own incentives funds available to prospective investors. For more incentives information, please visit our website: www.gtai.com/incentives
Global FDI Magnet According to the United Nations Conference on Trade and Development (UNCTAD), Germany ranks among the worlds leading countries for foreign direct investments with more than EUR 509 billion in inward FDI stocks in 2010. This represents a growth of 33 percent from 2005 to 2010. According to ofcial Bundesbank (German Central Bank) statistics for 2009, 77 percent of all FDI stocks in Germany originate from within the EU-27; with a further nine percent derived from the remaining European non-EU countries. Investments from outside the EU continue to grow. North America accounts for eight percent of FDI stock, while Asia holds a ve percent share.
FDI Project Share in Germany by Sector 2003-2010 (as percent of total FDI projects)
Hotel, Tourism, Entertainment 3% Energy, Minerals, Metals 4% Transportation, Storage & Logistics 5% Health Care, Pharma, Biotechnology 6% Textiles 6% ICT & Software 18% Renewable Energy 2% Other Sectors 4%
Consumer Goods (incl. Food & Beverages) 7% Electronics & Semiconductors 7% Chemicals, Plastics, Paper 8%
Source: fDi Markets 2011
FDI Project Share in Germany by Business Activity 2003-2010 (as percent of total FDI projects)
Sales, Marketing & Support Manufacturing Business Services Logistics, Distribution & Transportation Headquarters R&D ICT & Internet Infrastructure SSC/BPO/CC* Education & Training Other Activities
0
*Shared Service Center/Buisness Process Outsourcing/Contact Center Source: fDi Markets 2011
Most new projects open sales and marketing & support ofces. Almost one in ve investment projects is manufacturing-site located making this the second most important business activity in Germany.
Germany Trade & Invest's industry experts will assist you to realize your investment project in Germany. Please contact request@gtai.com for more information.
Share of Total GDP and Population in the European Union 2010 GDP (in EUR billion) Germany France UK Spain Netherlands Poland Czech Rep. Slovak Rep. USA Japan EU-27 Eurozone 2,477 1,933 1,697 1,063 588 354 145 66 10,957 4,122 12,284 9,170 Share of Total GDP (EU-27) 20% 16% 14% 9% 5% 3% 1% 1% Population (in million) Share of Total Population (EU-27) 16% 13% 12% 9% 3% 8% 2% 1%
Note: Czech Rep. GDP data are forecasts Source: Eurostat, US Census Bureau, Japanese Statistics Bureau 2011
kets including the United States, China, Russia, and Japan. Seventyone percent of all exports are exported to European countries, of which 15 percent go to eastern European countries. In 2010, the number two region for German exports was Asia; receiving approximately 15 percent of all goods from Germany, followed by the Americas at approximately 10 percent. Manufacturing Location Germany German companies represent more than nine percent of European manufacturing companies and generate 27 percent of total EU turnover in the sector. In fact, the manufacturing sector represents nearly one fth of Germanys value added one of the highest shares in Europe. Increasingly more foreign companies are placing their faith in Germany as a vital production site location, and are beneting from the countrys excellent business framework and superior productivity rates.
SMEs: Germanys Economic Backbone Exports are driven by Germanys backbone of highly innovative small and medium-sized enterprises (SMEs). These constitute 99.6 percent of all companies, employing 79.5 percent of all employees in Germany. Many of these SMEs are world market leaders in their respective niche segments. Together with internationally leading large companies including Bayer, BASF, Daimler, Volkswagen, and Siemens to name but a few they make up Germanys manufacturing industrial base.
Closer to Market with Germany is our strategic focal point, a country First Class Infrastructure there is no way around in our industry. Germany
Europes Global Logistics Hub With state-of-the-art transportation networks by road, rail, sea, and inland waterways as well as a dense network of both national and international airports Germany provides easy access to domestic and international markets. Little wonder that Germany is a global logistics hub. More goods pass through Germany than through any other country in Europe. Its approximately one quarter share of the European logistics market (EU-27, Norway and Switzerland) reects Germanys role as the major player in the continents economy. World Class Transport Infrastructure Germanys infrastructure excellence is conrmed by a number of recent studies including the Swiss IMDs World Competitiveness Yearbook and various investor surveys conducted by institutions including UNCTAD and Ernst & Young. The 2011-2012 Global Competitiveness Report of the World Economic Forum (WEF) ranked Germany rst in Europe and second worldwide for infrastructure; singling out Germanys extensive and efcient infrastructure for highly efcient transportation of goods and passengers for special praise. Accumulated in this score for Germany are high marks for the quality of roads and air transport, excellent railroads and port infrastructure, as well as its communications and energy infrastructure.
is the largest market in Europe, which creates the greatest advantages for our company. Investing here was an absolute must.
Sun Shubao, General Manager, Haier Group Europe and Germany
World Class Network Infrastructure Among the highlights of the countrys network infrastructure are Europes second largest port measured in container port trafc (Hamburg), Europes largest port container terminal (Bremerhaven) and over 250 inland ports. Germany has a dense network of airports (of which 22 are international airports). Among them, Frankfurt is the worlds seventh and ninth largest airport in terms of cargo and passenger volume respectively. The countrys highway system has one of the highest highway kilometer density levels in Europe, its 37,900 km of railway track being almost enough to circle the globe. Germanys high-speed railway network, with speeds of up to 300 km/h, is the fourth largest in the world. Logistics Giants Not only is Germanys logistics infrastructure among the best, its companies are also global logistics leaders. In fact, the worlds largest logistics services provider is a German company Deutsche Post DHL. Deutsche Bahn operates Europes largest rail network and Lufthansa Cargo is one of the worlds leading global air freight companies. Annual revenues of over EUR 200 billion in 2010 make Germany Europes logistics leader. No other EU country comes close to Germanys market size.
Bringing East and West Together In the north, Germanys seaports are an important conduit for trade with the UK, Scandinavia, and the Baltic states. In the west, an extensive network of roads, rail links and inland waterways feeds into France and the Benelux countries. To the south, Germany has strong commercial ties with Switzerland and Austria and direct road, rail and water links with the Balkan states. Turning eastwards, Germanys borders with Poland and the Czech Republic also bring the Slovak Republic and Hungary within easy reach and make the more distant markets in Turkey and Russia readily accessible. Quality of Infrastructure Rank 1 2 3 4 5 6 7 8 9 Country Hong Kong Germany Singapore France Switzerland UK Netherlands UAE South Korea Denmark
10
Increasing Competitiveness
High Productivity Measured in unit labor costs, Germany experienced a major increase in productivity the past decade. In marked contrast to other European countries which have experienced an overall increase in unit labor costs, Germanys unit labor costs decreased by a yearly average of 0.3 percent for the period 2005 to 2010. This made the economy more competitive particularly manufacturing. Stable Labor Costs At the same time, the labor cost gap between Germany and its eastern European neighbors has been signicantly reduced. In fact, Germany has gained the labor-cost edge in recent years. Since 2000, wages have risen in most European countries (EU-27), with the growth rate averaging 3.7 percent. While some countries particularly those in eastern Europe experienced a rise of more than seven percent, Germany recorded the lowest labor cost growth within the EU at just 1.6 percent. This has been another decisive argument in favor of Germany as a premium business location. Excellent Production Standards Germanys high productivity is also closely linked to its excellent production process standards. This has been conrmed by a study of international executives conducted by the World Economic Forum. According to the study ndings, Germany is seen as a country where the best and most efcient process technology is applied.
Europe is a growing market for our light-curing adhesives. Due to the highly qualied workers and efcient cost structure, Germany was the clear choice for the expansion of our production and R&D activities.
A.Gregory Bachmann, President, DYMAX Corporation
Japan Germany Netherlands USA France UK Czech Rep. Spain Slovak Rep. Poland China
0 1 2 3 4
6.5 6.3 6.0 5.6 5.6 5.5 4.6 4.5 4.4 4.0 4.0
5 6 7
1=labor-intensive methods or previous generations of process technology 7=the worlds best and most efcient process technology Source: World Economic Forum 2011
Annual average growth expresssed as percentage of industry, construction and services. Source: Eurostat 2011
Highly Skilled Workforce Germanys excellent workforce is decisive to the countrys high productivity rates. It comprises over 40 million people making it the largest pool of ready labor in the EU. Germanys world-class education system ensures that the highest standards are always met. More than 80 percent of the German workforce has received formal vocational training or is in possession of an academic degree. Dual Education System Germany provides direct access to a highly qualied and exible labor pool. For vocational training the country developed the dual education system unique in combining the benets of classroom-based and on-the-job training over a period of two to three years which is specically geared to meet industry needs. There are currently around 350 occupations recognized by the system. The German Chambers of Industry and Commerce (IHKs) ensure that exacting standards are rigidly adhered to, guaranteeing the quality of training provided across Germany. Engineering Excellence According to the OECD, Germany has an excellent standard in higher education. In 2010, some 443,000 students at more than 400 universities embarked on a course of academic study. Technical elds of study experienced an undergraduate enrollment level increase of more than eight percent. Germanys share of university students in the sciences, mathematics, computer sciences, and engineering is the second highest in the EU, with 31 percent of all students. German universities have introduced masters and bachelor degrees for improved international acceptance and comparison.
8.09 7.24 7.14 6.88 6.47 6.05 5.96 5.70 5.24 5.00 4.95 4.82 4.42
4 5 6 7 8
10=highest motivation level Note: IMD WCY Executive Opinion Survey based on an index from 0 to 10 Source: IMD World Competitiveness Yearbook 2011
In addition, the country can be proud of one of the highest rates of graduates with a doctoral degree. With 312 PhD graduates per million inhabitants, it ranks second in a comparison of OECD countries. Outstanding Reputation German labor exibility is reected in higher than average employee motivation levels exceeding those of most leading industrialized nations. In fact, according to the IMD World Competitiveness Yearbook, German
employee motivation levels are greater than those of their counterparts in the US, China, Poland, France, and the UK. A direct corollary of this is the fact that Germans work more than their international peers (41.8 hours per week) and lose less days per annum to strike action than other European nations (signicantly below the EU-27 average according to Eurofound).
POLAND
Thuringia Hungary
LUXEMBOURG
Rheinland-Pfalz Poland
CZECH REPUBLIC
Saarland Croatia
Cartography: roccomontoya istockphoto.com
Bavaria Russia
FRANCE
Germany
France
Value Added Through Innovative Technologies A 2011 study carried out by the German Institute of Economic Research (DIW) found that no other industrialized country produces a larger share of gross value added in research-intensive manufacturing industries than Germany. The share of total value creation in research-intensive industries in Germany exceeds Japan and US levels and is more than double the share of France, UK, and Italy.
High-Tech Products Made in Germany German companies are global leaders in the development of new technologies. Standing for high quality and innovation, the Made in Germany brand has been a seal of quality for over a century. In 2009, Germany exported high-tech goods to the value of EUR 102 billion making it the top high-tech goods exporter in Europe and second worldwide.
UK
Public R&D Support: Germanys High-Tech Strategy An unprecedented campaign to foster the advancement of new technologies has been launched by the German government. Annual R&D funding of approximately EUR 4 billion has been set aside to develop cutting edge technologies. R&D projects can accordingly count on numerous forms of nancial support. Interestreduced loans and special partnership programs complete Germanys public R&D project support. World Class Know-How While Germany is home to the largest population of researchers in Europe (20 percent of all EU scientists live and work in Germany), German scientists work on projects all over the world. For example, research results within the Max Planck Society are achieved through fruitful partnerships with more than 6,500 partners in research institutions across 123 countries. Cooperation projects between companies and academic research institutes provide an efcient way to close knowledge gaps. Scientists can be easily integrated into the company team of developers and researchers and, increasingly, institutes provide for the necessary laboratory facilities. Europes Patent Leader With over 12,000 patents granted at the European Patent Ofce in 2010, Germanys share of patents is almost twice that of France and the UK combined. This shows the commercial viability of innovations made in Germany. The country is also the leading European nation in triadic patents (patents registered at the three major global patent ofces: the European Patent Ofce, the United States Patent and Trademark Ofce, and the Japan Patent Ofce).
As a global company, Alcatel-Lucent relies on Germanys excellent R&D landscape. A culture of efciency, creativity, and entrepreneurship creates the ideal environment for us to innovate.
Alf Henryk Wulf, Chairman of the Board, Alcatel-Lucent Deutschland AG
France 18%
UK 15%
Intellectual property rights enjoy a high level of protection in Germany. For technical and commercial innovations, property rights can be registered in the form of patents, utility models, trademarks, and designs. The same conditions apply to foreigners as they do German nationals when registering property rights. These are just some reasons why Taylor Wessing ranked Germany rst in its Global Intellectual Property Index 2011. Proting from Innovation Clusters The German R&D landscape is best exemplied by close cooperation between the worlds of science and industry. Germanys publicly funded research bodies provide an internationally unique selling point. The applied research institutes of the Fraunhofer Society and Leibniz Association provide companies
particularly SMEs with unparalleled access to world-class research. With about 60 institutes and more than 13,000 employees, the Fraunhofer-Gesellschaft utilizes EUR 1.6 billion in research funding every year. The Leibniz Association has established a network of more than 80 research institutions with almost 12,000 employees. Some of the worlds most renowned fundamental research institutes are also located in Germany. The Max Planck Society and the Helmholtz Association allow companies to outsource costly research activities. This eases the access of developing new products and decreases research and development costs. Numerous spinoffs underline the ability of German research organizations to capitalize on technology.
Sweden
p lan e >
Finland
Russia
Helsinki
Norway
Oslo
3 h by
Stockholm
Tallin
Moscow
Estonia
1,5 h >
Riga
Latvia Lithuania
Minsk
Edinburgh
Denmark
Copenhagen
RU
Vilnius
Dublin
Belarus
Ireland UK
Cardiff London Amsterdam Berlin
Warsaw Kiev
Netherlands Belgium
Brussels
GERMANY
Prague
Poland 15 h >
Luxembourg
Paris
Moldova
Chisinau
France
Bern
Austria
2 <1
Switzerland
Romania
Bucharest
<
Portugal
Lisbon Madrid
24
by
u tr
ck
Italy
Rome
Bulgaria
So a Ankara
Podgorica
Pristina
Skopje
Tirana
Macedonia
Albania Greece
Athens
Source: Germany Trade & Invest 2011 Cartography: www.fotolia.de Antnio Duarte
Turkey Spain
Valletta
Malta
Greifswald Lbeck Bremerhaven Oldenburg Achim Vechta Hanover Bielefeld Paderborn Dortmund Unna Duisburg Velbert Dsseldorf Aachen Potsdam Berlin Braunschweig Gatersleben Stade Hamburg
Gttingen
Wiesbaden
Hanau Gerbrunn
Bayreuth
Neumarkt Cham
Industrial Focus of Networks of Competence Biotechnology Micro-Nano-Opto Production and Processing Transport and Mobility Health and Medicine Energy and the Environment New Materials and Chemicals Information and Communication Aerospace
Karlsruhe Stuttgart
Oberkochen Augsburg
Regensburg
Gppingen Gilching
Freiburg
Source: Kompetenznetze Deutschland 2011
Weling
perience in identifying the business locations which best meet their specific investment criteria. We help turn your requirements into concrete investment site proposals; providing consulting services to ensure you make the right location decision. We coordinate site visits, meetings with potential partners, universities, and other institutes active in the industry. Our team of consultants is at hand to provide you with the relevant background information on Germanys tax and legal system, industry regulations, and the domestic labor market. Germany Trade & Invests
experts help you create the appropriate nancial package for your investment and put you in contact with suitable nancial partners. Incentives specialists provide you with detailed information about available incentives, support you with the application process, and arrange contacts with local economic development corporations. All of our investor-related services are treated with the utmost confidentiality and provided free of charge.
Strategy
Project Management Assistance Business opportunity analysis and market research Market entry strategy support
Evaluation
Location Consulting /Site Evaluation Identication of project-specic location factors Cost factor analysis Site preselection Site visit organization Final site decision support
Support Services Identication of relevant tax and legal issues Project-related nancing and incentives consultancy Organization of meetings with legal advisors and nancial partners Administrative affairs support Accompanying incentives application and establishment formalities
Contact
Imprint
Publisher Germany Trade and Invest Gesellschaft fr Auenwirtschaft und Standortmarketing mbH Friedrichstrae 60 10117 Berlin Germany T. +49 (0)30 200 099-555 F. +49 (0)30 200 099-999 invest@gtai.com www.gtai.com Chief Executives Dr. Jrgen Friedrich, Michael Pfeiffer Authors Thomas Bozoyan, Market Intelligence Germany Germany Trade & Invest, thomas.bozoyan@gtai.com Dr. Hans-Peter Hssen, Market Intelligence Germany Germany Trade & Invest, hans-peter.huessen@gtai.com Marc Lehnfeld, Market Intelligence Germany Germany Trade & Invest, marc.lehnfeld@gtai.com Editor William MacDougall, Germany Trade & Invest Layout Germany Trade & Invest Print CDS Chudeck-Druck-Service, Bornheim-Sechtem Support Promoted by the Federal Ministry of Economics and Technology and the Federal Government Commissioner for the New Federal States in accordance with a German Parliament resolution. Notes Germany Trade & Invest, September 2011 All market data provided is based on the most current market information available at the time of publication. Germany Trade & Invest accepts no liability for the actuality, accuracy, or completeness of the information provided. Order Number 14783
About Us
Photo: istockphoto.com Claudia Dewald
Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. The organization advises and supports foreign companies seeking to expand into the German market, and assists companies established in Germany looking to enter foreign markets. All inquiries relating to Germany as a business location are treated condentially. All investment services and related publications are free of charge. Promoted by the Federal Ministry of Economics and Technology and the Federal Government Commissioner for the New Federal States in accordance with a German Parliament resolution.
Germany Trade & Invest Friedrichstrae 60 10117 Berlin Germany T. +49 (0)30 200 099-555 F. +49 (0)30 200 099-999 invest@gtai.com
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