Ai's Time Has Come

GERMANY 3/18

AI'S TIME HAS COME From healthcare to production, logistics to sales and marketing, there are few sectors that will not be transformed by artificial intelligence (AI). We survey Germany’s thriving and upcoming AI clusters. page 4

Technology: Entertainment: Manufacturing: Old to gold: a Berlin Why eastern Germany is Manufacturing processes startup is now Europe’s attracting international are being rapidly trans- biggest used car dealer film productions formed by 3D printing

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AI’s Time Has Come

German engineers and entrepreneurs are pioneering the artifical intelligence applications of the future.

page 4 Fotografie Illing & Vossbeck Photo:

»Not only is Germany a highly attractive market for AI; it is also a world leader in research and development.«

Dear Reader,

Global accountancy firm PwC estimates that the consistent use of artificial intelligence (AI) could ENTERTAINMENT MANUFACTURING boost the global economy by €13.4tn – a truly auspicious sum. AI is forecast to increase Ger- Lights, Camera, many’s gross domestic product by 11.3 percent und Bitte! over the same period. This reflects the country’s position as a highly attractive market for AI and Berlin-Brandenburg and Görlitz are in- a world leader in research and development in ternational hotspots for film production, this field. These are two good reasons to invest attracting big talent and funding. in Germany: we explain how, where, and why in page 14 the “Focus” pages of the current issue of Markets Germany. MANUFACTURING Have you ever heard of Görliwood? Maybe not, The Spirit but you know probably Wes Anderson’s movie Foot off the Brake! of Bauhaus The Grand Budapest Hotel, which was shot in Görlitz in Saxony. Görlitz – known as Görliwood From automobility to aerospace, 3D print- Product design still plays a big role in in the film industry – is one of the favourite lo- ing is being adopted across industry as it Germany’s exporting success. Industrial enters a period of super-charged growth. design expert Uwe Gellert explains why. cations for European and Hollywood film pro- page 16 page 18 ductions in Germany’s eastern federal states, alongside Berlin and the legendary studios in Potsdam-Babelsberg. In the article “Lights, Camera, und Bitte!” we look at what makes the MORE ARTICLES IN THIS ISSUE: TECHNOLOGY region a true Eldorado for filmmakers.

In Brief: carbon-fiber plastics, salt processing and What do the cities of Munich, with 1.5m inhabi- algorithms for jet lag and recruitment..... page 12 tants and home to the headquarters of BMW and Siemens, and Bottrop, with 117,000 inhabitants, Old to Gold: Berlin-based startup Auto1 is Eu- have in common, apart from the fact that both rope’s biggest used car dealer...... page 22 cities are in Germany? They are both laboratories for the development of an emerging phe- Coworking in Madrid: GTAI and AHK Spain share much more than just an office...... page 23 nomenon known as the “Smart City.” Around the world, more and more people are making Speaking for Germany: Peter Altmaier, minister cities their home, and in Germany, solutions are for economic affairs ...... page 24 being developed to optimize urban living, which A Tale of Two will benefit both people and the environment. Free GTAI Publications: information Find out more in the article “A Tale of Two Smart for your success ...... page 27 Smart Cities Cities.” From transportation and energy to waste ____ The Digital Magazine and lifestyle efficiencies, Germany’s Dr. Robert Hermann, CEO Online at: Smart Cities are ushering in a new era. Email: [email protected] www.marketsgermany.com page 20 Lauri Karp,Lauri a catalystforwhat waspossible,”hesays. products and a boom on exchanges. It was zation: therewere lotsofnewecommerce phase which saw the first wave of digitali- jor playersinbanking.“Itwas an exciting Frankfurt in1998toworkforone ofthema- ing economicsinHeidelberg,he movedto 20-year experienceinfinance. After study- The venturedrawsonKarp’sextensive tomers moreefficientlyandeffectively. to communicatewithandservetheircus- European financialservicesinstitutions er of Frankfurt-based emformX helps former financial consultant and co-found- in Estoniathatisnowpartofabank.The banking – at least he was born in a building Perhaps LauriKarpwasdestinedtobein

co-founder andCEOofemformX co-founder emformX is seizing the opportunities in in the opportunities emformX isseizing thenewventure network, and professional them andtheyemergedstronger. ily, theirpublicsectorclients stuckwith 0% –sowhoneedsarisksolution?” Luck- Meanwhile, theInterestratehad shrunkto disappeared, soourmarketshrank rapidly. and the public sector. Suddenly customers management aimedatcustomersinbanks product wasaboutinterestrateanddebt “These were really tough years, because the ing, whentheglobalmeltdownhappened. brother Margo. They had just begun cod- ware company TreasuryView with histwin to 2008beforedecidingsetupthesoft- He wasafreelanceconsultantfrom2001 Benefiting from Karp’sBenefiting experiences past business looking to see what ispossible.” to see looking business a to support infrastructure ment andlegal environ business - growth: “It has the best forinnovation therightbase offers and – – and Frankfurt in particular Germany sense.”content to thatmakes ourcustomers data smart,” hesays, “and deliver automated dataanalysis: “We transaction makedumb financialand time-consuming fy otherwise to simpli- and provides aplatformthat helps tion programming interface (API) product anapplica- EmformXoffers cloud services. the fast-moving ofdigitalizationand forces arisingfrom industry services the financial Karp ismore convinced thanever that www.emformx.com

Photo: Feinkorn-Gaby Gerster 4 MARKETS GERMANY | Focus

Patient-side cart Positioned where the patient is during surgery, the machine has up to four robotic arms Vision system to carry out the surgeon’s Equipped with a high-def precise commands. 3D endoscope and im- Surgeon console age-processing equipment The surgeon operates the that provides true-to-life Da Vinci system: their manual anatomical images. movements are translated seamlessly into robotic surgical operations in real time. Photo: Intuitive Surgical, Inc. Surgical, Intuitive Photo: MARKETS GERMANY | Focus 5

Endowrist instruments Each has seven degrees of motion and is designed for a specific task e.g. clamp- ing, dissecting, suturing. AI’s Time Has Come

Artificial intelligence (AI) will fundamentally change the nature of industry. German companies, researchers and developers are pioneering the disruptive AI applications of the future. Little wonder foreign investment is flowing into German R&D.

da learns fast. She has to. That’s western medicine and applies it through an because Ada is a frontline health algorithm. “We’ve spent seven years working A worker who consults with people intensively on AI data processing and building who are in pain and feeling unwell. To do a global network of medical experts to support her best for her patients, Ada needs to know us,” says Nathrath, CEO and founder of Ada all the relevant medical basics. She must ask Health. “This gives us a real head-start here the right questions and analyze in minutes whether the symptoms suggest a serious illness, if she should bring in a doctor; or al- ternatively, if a few soothing words, a day in bed, or a trip to the pharmacy are enough to treat her patient. Ada does not have a medical qualifica- tion or even a university degree. Everything she knows she learned in a Berlin backyard from entrepreneur Daniel Nathrath and his GTAI Market Presentations @Medica 2018 team. Ada’s creators have programmed her Meet our industry experts in hall 15 @booth 15F37. to be a health consultant and trained her www.gtai.com/medica with the combined knowledge of more than 70 physicians, mathematicians, data scientists and computer scientists. By now you in Berlin and makes us the world’s leading may have realized that Ada is not human but software for diagnostic support.” Over three an Artificial Intelligence (AI). million people are already using the Ada app When users of the Ada app enter their worldwide and last year €40m of capital was symptoms into the chat program, “she” collects ploughed into the startup to develop the ser- and maps the collective medical knowledge of vice further. Investors included prominent 6 MARKETS GERMANY | Focus

Wolfgang Wahlster »Germany has produced many pioneers.«

It is thanks to innovators like Wolfgang Wahlster, head of the German Research Center for Artificial Intelligence DFKI, that Germany has been pioneering arti- international financiers such as U.S. billion- ficial intelligence since the 1980s. He tells This focus on AI applications is one of the key aire Leonard Blavatnik, Google business chief Markets Germany about the strengths of strengths of German research and develop- Philipp Schindler, and British AI professor Germany as a business location. ment (R&D). “With regard to AI, the bound- William Tunstall-Pedoe, who developed the ary between basic research, application-ori- Mr Wahlster, how long have you been technology behind Amazon’s voice-driven ar- ented research and transfer to industry is involved with artificial intelligence? tificial intelligence “Alexa.” Since the early 1980s when I did some basic fluid,” says Hermann. The development of research into AI for my dissertation on how machine learning technology is progressing KI: “Made in Germany” to teach a computer to understand natural so fast that there may only be a few months Ada is just one of many examples of inno- language. At that time, I was a lone warrior between the idea stage and a first application. vative startups under the Künstliche Intelli- in the field in this country. The DFKI was “Many AI applications have what it takes to genz (KI) “Made in Germany” banner, whose founded in 1988 together with the Federal make a profound change to entire industries Ministry of Education and Research and our pioneers of future tech are revolutionizing and branches once they pass the field test,” industry partners. It is now the largest AI whole sectors and attracting investment research center in the world. he adds. from all over the world. Supporting the new A study by the consulting firm PwC con- generation are research institutes like the How important is Germany as a location cludes that the growth potential for the global German Research Center for Artificial Intel- for AI research? economy through innovative products that use ligence (DFKI), where scientists and com- We have produced pioneers in many ar- AI, combined with gains in efficiency, could panies have been working together since eas. For example, in the analysis of image reach €13.4tn by 2030. In Germany alone, GDP sequences and in autonomous driving. The the 1980s to teach machines how to think. will rise by 11.3 percent over the same period first autonomous car did not drive in Silicon With more than 900 employees, DFKI is the Valley, as some people mistakenly think, thanks to developments in intelligent technol- world’s largest research center in this field. It but in Munich 15 years ago. At that time the ogy. The study identifies a large proportion of has spawned more than 80 spin-off compa- Federal Armed Forces College developed a industries within Germany (healthcare, ener- nies and has big league partners and share- Mercedes van and sent it down the Auto- gy and the auto industry in particular) that will holders such as Airbus, Nvidia, Intel, Google, bahn at a speed of 100 kilometers per hour. benefit from significant productivity gains by Microsoft and Ricoh. adopting AI applications. Is the Federal Republic still competitive Unsurprisingly, there has been a surge today? Upcoming AI clusters Artificial intelligence is now found in nu- in interest in joint research projects from the Germany’s younger research clusters such merous industries. Automobile companies corporate sector and foreign investors. From as Cyber Valley in southern Germany are such as BMW and the world’s largest sup- machine tool manufacturers to medtech ap- also gaining influence and considerable mo- pliers Bosch and Continental have their plication developers, makers of household mentum. Founded just two years ago by the own AI laboratories. The laser scanner man- appliances through to energy suppliers, com- Max Planck Institute for Intelligent Systems ufacturer Sick is also a beacon in this field: panies are queuing up to find out how their almost every AI laboratory worldwide uses (MPII) together with auto groups Bosch, products and services could be improved with their sensors. German companies are very Daimler, BMW and Porsche, the cluster has good at linking physical products to the In- AI. “There are also many exciting German AI just secured €1.25m investment from Ama- ternet, and we have a big head start in the projects in the field of Industrie 4.0,” says Her- zon for a research cooperation. The U.S. gi- smart home market. mann. In factories, for example, intelligent ant has also established its own AI research machines can now evaluate the data from center in Tübingen. “Research into artificial Does this lead to foreign companies thousands of sensors to optimize production intelligence in Germany clearly focuses on investing in German tech? and improve product quality. Meanwhile, Of course. For example, the agricultural ma- the question: how can AI make international- businesses and scientists are testing the use of chinery manufacturer John Deere has built ly successful German industries, services and an R&D center next to the DFKI. This was collaborative AI robots and linking augment- products even better?” explains the manag- no coincidence: the region is home to many ed reality technology to AI-based production

ing director of GTAI Robert Hermann. important companies. planning systems. © DFKI GmbH 2018 Photo: MARKETS GERMANY | Focus 7

FACTS & FIGURES

Asia-Pacific Con- AI – the trillion dollar technology ference of German Business (APK) €13.4tn €430bn The conference is the flagship event for Potential contribution to the global Potential growth of the German top business leaders, executives and gov- economy by 2030 from AI economy by 2030 resulting from ernment representatives to discuss and (More than the current GDP of adoption of AI technology, applica- promote economic relations between Asia China and India combined) 1) tions and services across all sectors. and Germany. This year’s APK will dive into the latest developments in mobility, urbanization and artificial intelligence (AI). GTAI is once again a partner organization and will AI: the new engine of value host – together with DIHK – a panel of experts to discuss the “hype vs. reality” of AI The worldwide automotive industry could increase its value by €184bn as well as promising applications. by 2025 due to the cost savings and boost in revenue that AI promises. www.apk2018.com € = Added revenue potential and cost savings due to AI 2)

A number of trending tech topics come together in the German automotive industry. Global groups such as Volkswagen, BMW Production Procurement Intralogistics & supply Sales and marketing and Daimler are investing heavily in modern, chain management AI-controlled factories. At the same time, €52bn €43.5bn €18.8bn €26.5bn manufacturers are working on solutions for assisted and autonomous driving, intelligent Growth accelerator AI operating systems, entertainment systems and navigation systems at their German AI’s impact on economic growth rates across different industries by 2035 3) R&D centers. The auto companies are open Baseline AI steady state to collaboration on joint development proj- 4.8% ects with foreign partners and investors. One 4.4% 4.3% 4.0% 4.0% of China’s largest virtual reality companies, 3.8% 3.4% 3.4% 51VR, is planning to invest in an R&D facility in Frankfurt, for example. 51VR uses software developed for the gaming industry to cre- 3.4% ate elaborate virtual realities that are hardly 2.4% 2.3% 2.2% 2.3% distinguishable from the real world. It now 2.1% 2.0% 2.1% wants to combine these virtual worlds with artificial intelligence – hence their interest Information Manufacturing Financial Wholesale Transportation Professional Healthcare Construction and investment in projects in Germany. & Communi- Services & Retail & Storage Services cation

VR used to train intelligent machines 3.4% 51VR’s core concept is that intelligent ma- 3.2% 3.1% 3.1% 2.8% chines can test their skills and train in virtual 2.3% reality environments. Just as human beings 1.7% 1.6% acquire skills by interacting with the real 1.9% world, AI machines will be able to practice 1.3% 1.4% 1.4% 1.6% 0.9% 0.9% decision making and action patterning in a 0.7% complex VR environment that mimics the real Agriculture, Accomoda- Utilities Arts, Enter Social Public Other Education world. This could have benefits for German Forestry tion & Food tainment Services Services Services & Fishing Services & Recreation car manufacturers, who could train intelligent navigation and control systems for their 1) Source: PwC study “Sizing the price of AI” 2018; 2) Source: McKinsey 2018, Accenture 2017; 3) Industry growth with/ vehicles in the virtual traffic of a 51VR pro- without using AI technology, Source: Accenture 2017 8 MARKETS GERMANY | Focus

German Research Center Leading AI clusters for Artificial Intelligence (DFKI) Founded 1988

in Germany Kaiserslautern, Saarbrücken, Bremen, Berlin All over Germany there are hundreds 200+, including SAP, Harting, Google, of research facilities and companies Microsoft, Volkswagen that have partnered to develop artifi- University of Bremen, Technical Univer- sity of Kaiserslautern

cial intelligence applications. Internet of Things, robotics, machine SCHLESWIG- learning, smart data HOLSTEIN MECKLENBURG- www.tinyurl.com/dfki-eng VORPOMMERN

BREMEN HAMBURG Fraunhofer Cluster of Excellence Cognitive Internet Technologies (CIT) Bremen Founded 2018

Munich, Dortmund, Kaiserslautern, NIEDERSACHSEN BERLIN Erlangen, Chemnitz, Dresden, Berlin, Karlsruhe, St. Augustin Berlin 100+, including Allianz, Bayer Healthcare, Boehringer Ingelheim Pharma, Deloitte BRANDENBURG Fraunhofer IoT-COMMS, Fraunhofer Data Spaces, Fraunhofer SAXONY-ANHALT Center for Machine Learning Agile and mobile production systems, autonomous driving, data sovereignty, Dortmund machine learning, informed learning

NORTH RHINE- SAXONY www.cit.fraunhofer.de WESTPHALIA Dresden

Chemnitz St. Augustin THURINGIA Cyber Valley

HESSEN Founded 2016

Stuttgart, Tübingen

7+, including Amazon, BMW, AIV, RHEINLAND- Daimler, Robert Bosch, ZF Friedrichs PFALZ hafen, Porsche

University of Stuttgart, University Erlangen of Tübingen, Max Planck Institute for SAAR- Intelligent Systems LAND Kaiserslautern Machine learning, robotics, computer vision

Karlsruhe www.cyber-valley.de/en Saarbrücken BAVARIA Stuttgart

Tübingen De:hub Karlsruhe

Founded 2017 BADEN WURTTEMBERG Munich Karlsruhe

50+, including 1&1, Grenke, Adesso

Fraunhofer IOSB, FZI Forschungszen- trum Informatik, Karlsruhe Institute of Technology

Energy, mobility, production

Year founded Location Members/project partners Research facilities Research Focus Web Address www.de-hub.de/en/the-hubs/karlsruhe MARKETS GERMANY | Focus 9

»Artificial Intelligence has the potential to transform entire industries profoundly.«

Robert Hermann, CEO Germany Trade & Invest

FACTS & FIGURES grammed model. The German energy market As a location for AI innovation, Germany has is another interesting and rapidly-developing the great advantage of having a large pool of arena for AI investment projects. Since 2012, highly trained specialists and experts. They the Energiewende (the government’s national then team up with the entrepreneurs and level energy transition project) has been lead- startups that are clustered around the uni- ing Germany to a decentralized system of en- versities and research institutes (see map ergy supply in which renewable energies and 72% “Germany’s AI Clusters”). “Germany also of German employees think that energy efficiency technology play a central attracts many foreign researchers and spe- the economy and society at large role. For Peter Geisel, energy market expert at are going to benefit from AI. cialists, because they find good working and the Swiss energy company Alpiq, this is rea- living conditions here,” says Ada Health’s son enough to invest in R&D in the German CEO Nathrath. His team in Berlin employs energy market. Alpiq, which develops intel- mathematicians, software engineers, phy- ligent solutions for modern energy services sicians and data scientists from all over the such as Gridsense, has recently opened a world. “We receive inquiries from entrepre- branch in Germany. “The energy sector is un- neurs, insurers, scientists and health poli- dergoing dynamic change,” explains Geisel. cy-makers around the world who want to col- Households and businesses are increasingly laborate with us to work together to develop becoming energy producers, and renewable smart solutions for the healthcare systems of energy and e-mobility need to be integrated 11 the future,” he says. “We are convinced that The number of times AI is men- into energy networks. “New smart solutions over the next few years we will be able to fur- tioned in the coalition agreement and artificial intelligence make a major con- of the German governing parties ther extend our lead in Germany through our tribution to managing this new complexity in CDU/CSU and SPD. very good research infrastructure in the field everyday life.” of AI.” Intelligent assistants such as Ada, the German health assistant, could soon find job AI sparks energy developments opportunities opening up all over the world. Alpiq has developed an “Energy Artificial Intelligence Platform” which can record, an- Contact: alyze and evaluate data from power plants, [email protected] consumers, energy markets and weather GTAI expert for Mechanics stations in real time. On this basis, the “arti- & electronics ficial brain” of the platform makes optimal €30m [email protected] decisions for energy customers and power of public funding to flow into four GTAI expert for Smart grids stations such as when and how much energy new AI clusters/R&D centers in & renewable energy Berlin, Dortmund/St. Augustin, should be produced and which energy source [email protected] Munich and Tübingen from 2018. to use at what time. “In Germany, customers GTAI expert for Chemicals and are open to these new solutions,” says Geisel. healthcare “The framework conditions for companies [email protected] such as Alpiq, which offer innovative, new en- GTAI expert for Digital & service Source: Bitkom 2018, German Ministry

Photo: Illing & Vossbeck Fotografie Illing & Vossbeck Photo: ergy services, are therefore very good here.” of Education and Research industries 10 MARKETS GERMANY | Focus Silicon Valley, Deutschland

Since the 1980s the region around Karlsruhe has been the nucleus for innovations in artificial intelligence. The Federal Ministry for Economic Affairs and Energy (BMWi) recently brought it into the de:hub fold, awarding it its own Digital Hub Initiative.

FACTS & FIGURES n February, a press release from the It was no surprise, then, when the BMWi de- startup Things Thinking caused a stir: cided to award Karlsruhe its own Digital Hub, I “Artificial intelligence from Karlsruhe as a part of the de:hub initiative, in the special- examines coalition agreement: SPD performs ist area of Applied Artificial Intelligence. Since well,” read the headline. The machine ex- the launch of the de:hub initiative in early perts had examined whether the contract – 2017, twelve digital hubs have been launched which sets out the future cooperation of the 25% under the umbrella brand. They form an over- political parties in government – contained arching network that strengthens the Federal more content from the CDU/CSU parties or Republic as a digital location and makes it eas- the SPD. The result surprised technologists ier for foreign companies to invest. as much as it did political commentators: Within the network there are many start- Percentage of all students at for an algorithm to analyze various texts and ups that claim to be producing groundbreak- the Karlsruhe universities who draw comparisons was a huge step forward, are enrolled in degree pro- ing products, services and disruptive tech- because until now human brains have been grams in the field of ICT. 1) nologies. There are also bigger companies streets ahead of algorithms in terms of un- such as the internet service provider 1&1, derstanding speech. Now Things Thinking is the software manufacturer Adesso and the shifting this paradigm. financial services provider Grenke, which is The startup from Karlsruhe is part of a joining forces with the newcomers to drive cluster of institutes, companies and educa- forward innovation. “We are currently work- tional institutions now widely recognized as ing on attracting foreign companies to the Germany’s most important location for the network,” explains project leader Simon development of AI. The second biggest city Sulzer, who coordinates de:hub activities in in the state of Baden-Wuerttemberg is home 4,400 Karlsruhe. Karlsruhe is a magnet for foreign to 26 research institutes, ten incubators and companies who come not only to invest but Number of companies from 4,400 digital companies. Within a 400 me- to find qualified professionals: roughly a the digital economy that ter radius you can find renowned research have settled in Karlsruhe and quarter of the 44,000 students in the region institutions such as the FZI Research Center the surrounding area. 2) are studying information and communica- for Computer Science, the corporate network tion technology. Cyberforum, the Fraunhofer Institute for Optronics, Systems Engineering and Image Contact: Evaluation, and the Karlsruhe Institute of [email protected] 1) Source: DIZ – Digitales Innovationszentrum; Technology. 2) Source: De:hub GTAI expert for digital hubs MARKETS GERMANY | Focus 11 Artificial Intelligence Will Save Lives

Earlier this year, the Chinese startup Infervision set down roots in the city of Wiesbaden, near Frankfurt. Its representative in Germany, Yipeng Sun, is hoping to transform the healthcare market all over Europe and prove that thinking machines can save lives.

Infervision’s intelligent algorithms can detect lung cancer and strokes in X-ray and CT scans with an accuracy of up to 90 percent.

ipeng Sun only arrived in Wies- baden in the spring, but already Y he is determined to transform the German healthcare market through AI. His company Infervision is developing machine-learning algorithms that can detect strokes and lung cancer in X-ray and CT scans with an accuracy of up to 90 percent. Their technology is already widely used in radiolo- gy in clinics across China and has been pilot- ed in Japan. “We entered the German market in March 2018,” says Yipeng, “and already we have one strategic partner and are looking to increase this number significantly.”

Helping doctors make quick decisions Infervision has set the bar high and plans to expand its network of hospitals to cover the whole country. The startup’s promise to healthcare providers is straightforward: to supply them with reliable data to help doctors make clinical decisions faster and more data in an instant to decide if the patient holds Germany’s workforce and its universi- accurately. “We used more than 100,000 needs urgent surgery or not. ties in high esteem: “German engineers are annotated medical images to train the al- Infervision started in China in 2016, very creative and work hard.” To strengthen gorithms,” Yipeng explains. For example, where it has already partnered with over 140 its position in Europe, Infervision already the algorithms can now measure the exact hospitals. Opening a subsidiary in Germany plans to make more investments including a volume of blood lost in hemorrhagic strokes was the next logical step. The Wiesbaden of- dedicated R&D facility in Wiesbaden. “There from brain CT scans. “Traditionally, doctors fice will also serve the Spanish, Austrian and is huge potential here,” says Yipeng. use a mathematical formula based on the Swiss markets, with France and Italy further health condition and the age of the patient down the roadmap. “Germany is central to Contact: to estimate the amount of blood lost,” Yipeng Europe and also enables us to assemble a [email protected] GTAI expert for digital health Photo: iStock by Getty Images/Nerthuz Getty by iStock Photo: says. The algorithm now provides this vital competitive workforce,” Yipeng explains. He 12 MARKETS GERMANY | In Brief

Textile Innovation ’s no Problem Artificial ski slopes made from mats Textile snow is a tough but glidant high-tech fabric that makes popular winter sports such as skiing, snowboarding, and tobogganing Hate waiting for winter to roll around be- possible all year round. The new material does not require additional power or water. fore you can do your favorite sports? You’re not alone. This same frustration inspired a trio of German entrepreneurs with a shared passion for winter sports and backgrounds in textiles and engineering to develop textile dry slopes. The high-tech fabric of Mr. Snow is grippy and robust while allowing for easy gliding, and doesn’t require regular watering or oiling as similar products do. Whether for downhill or cross-country skiing, tubing, snowboarding or tobogganing, as the startup’s website says: “Just roll out the sliding mats and it’s already winter!”

www.mr-snow.de Photo: MR.SNOW Photo:

Chemical Industry Digital HR Compounding Success Beyond The Grade Huge salt plant for food & pharma Finding the truth behind the numbers

The Warsaw-based chemicals giant CIECH Group is investing All recruiters know that the grade point average (GPA) on an appli- €109m in a new plant in Stassfurt, Saxony-Anhalt, to produce salt cant’s résumé really doesn’t say much given the varying grading stan- for the food and pharmaceuticals industries starting in 2020. The dards, degrees of subject difficulty and competitiveness at different plant – the biggest greenfield investment in the Group’s histo- institutions and in different years. To give HR staff a rounder picture ry – will produce approximately 450,000 tons of evaporated salt of the top talent, the Cologne-based startup Candidate Select (CASE) a year for western European markets, making it the third-largest has developed an algorithm and extensive database. Besides rating producer in Europe. Products will include food-grade salt, salt for academic achievement, the analysis also looks at the psychological electrolysis, tablets for water treatment and pharmaceutical salt. and personality traits that can predict on-the-job performance. The The state is providing €11.25m in subsidies, assisted by GTAI. service will soon be available in six European countries.

www.ciechgroup.com/en www.candidate-select.de MARKETS GERMANY | In Brief 13

Future Plastics Aerospace Renewable Energy Not Heavy. An Algorithm Rotor Blade Not Metal. for Jetlag? Recycling “Made in Germany” carbon fiber Optimally adjusting the Turning glass fiber into super plastics body clock cement

You might never know what CFRTP is, but Sixty percent of people who take long-dis- Looming out there on the horizon with all your back will be thankful for it. Made up of tance flights suffer the disconcerting ef- those wind turbines is a big problem: from carbon fibers impregnated with polycarbon- fects of jetlag. This figure might soon de- 2020, large numbers of them will have to be ate, the material is formed into unidirection- cline, however, thanks to the innovations of taken out of service. And while most of the al reinforced tapes and sheets that can be jetlite. The startup, based at the Center for revolving giants can be easily recycled, un- tuned to infinite combinations. Layering, cut- Applied Aviation Research (ZAL) in Ham- til recently there has been no eco-friendly ting and laminating them generates a met- burg, offers an algorithm-based concept to way to dispose of the glass-fiber-reinforced al-like material that is extremely strong, stiff improve lighting in aircrafts and airports, plastic (GFRP) that makes up most of the and lightweight. In fact, CFRTP – exclusive- as well as customized nutrition concepts rotor blades. Luckily, the Bremen-based ly manufactured by the German polymers for airline catering and airport services, to disposal specialist Nehlsen has launched an giant Covestro – boasts the best strength- mitigate jetlag and thereby enhance trav- award-winning subsidiary to do just that. to-weight ratio of all standard composites eler comfort and wellbeing. What’s more, it Neocomp GmbH shreds the GFRP, mixes it on the market and even outperforms many is developing a smartphone app that tells with residue generated in waste paper re- metals, making it ideal for applications such passengers the ideal bedtime, light and nu- cycling, and produces a fine granulate that as portable electronics, luggage, auto parts trition starting a few days before a flight. can be used to make cement. Germany’s and sports equipment. What’s more, unlike Through the brand chronolite it is also de- only glass-fiber recycling facility currently many other advanced materials, the ul- veloping solutions for other setting and serves the domestic wind power industry tra-customizable solution enables flexible, sectors, such as using light in Porsche cars but it is also set up to process GFRP from cost-efficient mass production. to boost driver attentiveness. other sectors and countries. www.cfrtp.covestro.com www.jetlite.de www.neocomp.eu

Environment

A deposit system for eco- friendly, reusable coffee cups Pfand-tastic has been rolled out across more than 1000 German cafés. Idea to Go Coffee cups join Germany’s recycling culture

Anyone who’s lived in Germany is familiar with the deposit (Pfand) system that keeps cans and bottle out of the streets and landfills. Recup, a Munich-based startup launched in December, has trans- ferred the concept to the realm of coffee-to-go cups, which have a huge environmental downside. Recup has formed a network of more than 1,000 cafés and bakeries across Germany offering its unique reusable coffee-to-go cups made of recyclable plastic in three sizes. The concept: cafés and bakeries – locatable via an app – pay about €1 a day to participate in the program, offering reusable cups to customers for a €1 deposit. The customer benefits by getting a small discount. Cafés and bakeries benefit by saving on paper cup expenses and from potential sales from customers returning cups. And we all benefit from the reduced environmental impact of our usual morning pick-me-up! www.recup.de Photo: reCup GmbH reCup Photo: 14 MARKETS GERMANY | Entertainment Lights, Camera, und Bitte!

Eastern Germany is a magnet for foreign film productions and, with them, foreign investors. From The Grand Budapest Hotel to Bollywood blockbuster Don 2, the German capital and other cities in the region are stealing the production limelight.

FACTS & FIGURES erlin has long been a darling of the by funding and investment from service pro- spy thriller genre, especially movies viders. And these funds have given, and still B set in the era of cold war intrigue. The give, a certain incentive to film here.” unique history of the city, its impressive and varied architecture from Neoclassical gran- One of the key attractions of eastern Germa- deur to Modernist functionalism, and the €26m ny is the range of funding options on offer widely-varying climate are all conducive to a to help foreign film companies shoot in the Berlin-Brandenburg’s Medien- range of atmospheric settings and storylines. perfect location. Berlin-Brandenburg Medi- board’s (BBM) annual film fund The Hunger Games, Bridge of Spies and popu- enboard’s (BBM) film funding department lar TV series Homeland are just three of Ber- has an annual budget for films shot in the re- lin’s most recent backdrop appearances. gion of around €26m (MDM’s is similar), but The number and prominence of films funds obtained from here can be combined being shot on location throughout eastern with other federal funds, such as the German Germany is rising. The Saxon city Görlitz is Film Promotion Fund (Deutscher Filmförder- known in the film industry as Görliwood for €1.25bn fond or DFFF) or the German Motion Picture the number of times it has been used in pro- Fund (GMPF). Investors looking for bargain ductions. It was voted “Film Location of the The annual German production fund locations or well-funded support are unlike- Decade” by the European Film Commissions of the Deutscher Filmförderfond. ly to leave the region unsatisfied and emp- Network for the scenery and architecture on ty-handed. show in Wes Anderson’s The Grand Budapest

Hotel. Potsdam’s Babelsberg studios have Source: BBM, DFFF Film services hotspot Babelsberg been instrumental in many other films where Meanwhile, German film studios, film in- the locations were less accessible. Leipzig/ says Oliver Rittweger of the Central German dustry service providers and studio special- Halle airport was the setting for many Film Promotion Agency (MDM), which cov- ists have a good and growing reputation on scenes in The First Avenger (featuring Tom ers the states of Thuringia, Saxony and Sax- the international stage. A study by EY shows Cruise), while Quentin Tarantino’s Inglorious ony-Anhalt. “East Berlin was the center of that it is the sheer diversity of eastern Germa- Basterds was filmed all over Saxony, Berlin the East German film industry but there was ny’s locations, such as the Berlin Exhibition and Brandenburg. nothing else notable in the eastern states. grounds, or the abandoned chemical factory “The eastern German states have become But there’s a fountain of new locations now, in Rüdersdorf, which sets it apart, while an popular locations since the fall of the wall,” backed up by a good infrastructure created association with the world-class studios in MARKETS GERMANY | Entertainment 15

Ralph Fiennes in Wes Anderson’s film The Grand Budapest Hotel, which was shot in a magnificent disused Art Nouveau department store called Görlitzer Warenhaus in Görlitz. Five big international films shot in eastern Germany

Don 2 The First Hindi film shot in Berlin, the Babelsberg can actually help to secure invest- town’s big screen fame by running movie- second in the blockbuster Bollywood ment. Babelsberg-based special effects mae- themed hotels and day tours. crime thriller series. stro Gerd Nefzer and his colleagues won an But it is Berlin-Brandenburg that remains Inglorious Basterds Oscar for their work on Blade Runner: 2049. the location of choice for film and series pro- Tarantino’s multiple award-winning story about concurrent Hitler assassina- Berlin-Brandenburg (which includes duction. The list of reasons why is long: it tion plots. Babelsberg) and Görlitz remain the two has the big town factor and a cosmopolitan The Grand Budapest Hotel hotspots. Görlitz in particular has built a feel, it has a diversity of locations, competent Wes Anderson’s film about a concierge unique local town economy on its “cinetas- studios; and of course it’s a magnet for cre- proving his innocence won four Oscars. tic” credentials. The Saxony town was almost ative filmmakers, well-known producers and The Ghost Writer completely untouched by the Second World home to some famous actors. Accessibility is Roman Polanski’s thriller was filmed in War and is home to some 4,000 historical also a factor: Babelsberg’s back-up services, Berlin and Babelsberg’s studios, despite buildings spanning 500 years of history – studios and post-production houses are close being set in London and Massachusetts. enough to cover most aspects of modern by on the autobahn. Around the World in 80 Days Western history. In 2008, Görlitz’s Landskron Despite the title, the only filming lo- brewery and surrounding streets were even Contact: cations outside of Germany were New remodeled into the harbor area of New York. [email protected] York, San Francisco, China and Thailand. GTAI expert for eastern Germany Photo: Sunset Box/Allpix/laif Sunset Photo: Local people have been able to cash-in on the 16 MARKETS GERMANY | Manufacturing Foot off the Brake!

The additive manufacturing industry is entering a period of accelerated growth. As the machines become more economically viable, 3D printing is being adopted across manufacturing, particularly in automobility and aerospace.

Thanks to 3D printing, it was possible to individually customize the radiator hoods of the motorcycles used in the BMW Motorrad International GS Trophy Central Asia 2018. The CAD data was enhanced with the names and start numbers of the drivers and then printed using additive manufacturing. Photo: © Daimler AG © Daimler Photo: MARKETS GERMANY | Manufacturing 17

FACTS & FIGURES $7.8bn

Projected value of the n January 2018, a small but signifi- The two industries that are set to be revolu- AM industry in 2018 – cant world record was set in Hamburg. equivalent to 21% growth tionized by 3D printing according to EY are I Bugatti, the Volkswagen-owned luxu- aerospace and automobility: industries in ry sports car manufacturer, with help from which Germany is traditionally strong. Aero- Germany’s renowned Fraunhofer institute, Sales data space, which demands ever-lighter, more made the largest brake caliper the auto- geometrically complex parts in ever-smaller motive industry has ever seen. For motor- batches, has become an early adopter of the ing enthusiasts that in itself was a massive technology. The auto industry’s take-up of achievement, but the caliper also happened AM is projected to increase from $365.4m in to be the largest functional titanium compo- 2015 to $1.8bn in 2023, resulting in a stagger- nent and the first brake caliper of any kind to ing 19.51 percent Capital Annual Growth Rate be produced by additive manufacturing. (CAGR). 80% 37% Additive manufacturing – or 3D printing Increase in sales of German companies Other industries will also benefit from the as it is more commonly known – is becom- metal AM systems be- already using 3D infinite versatility that 3D printing methods ing more widespread and more economical- tween 2016 and 2017 printing solutions offer. “The advances in prototyping, where ly viable for industrial usage. It has come a we began, to low-volume production, small- long way from chess pieces: there are now a Growth sector batch manufacturing and mass customiza- plethora of viable products produced in this tion is relevant to all industry sectors and is way, from dentures, body parts and bikinis, 135 growing proportionately across all markets,” to essential industrial components like parts Sorkin points out. for airplanes. 97 Germany is one of the leading additive New age of manufacturing manufacturing (AM) markets in the world Bugatti’s achievement earlier this year was right now: a market that is forecast to create to a large degree enabled by the R&D activ- significant value and is attracting investors ities of the Fraunhofer IAPT in Hamburg.

from all over the world. 37 percent of German 2016 2017 Unsurprisingly perhaps, the Fraunhofer re- companies already use AM. The machinery search family is a major stakeholder in the Number of companies around and equipment sector (a traditional German the world producing and selling growth of additive manufacturing R&D. The stronghold) is increasingly looking at 3D industrial AM systems Fraunhofer Additive Manufacturing Alliance solutions from both the supply and demand brings together 17 institutes throughout Ger- side. The clamor from customers for the The product many and along the additive manufacturing kind of tailored machine parts that only a 3D process chain. printer can produce easily grows by the day. Formlabs’ Form 2 3D printer delivers For a young industry, 3D printing “has To match the rising demand, machine man- high-resolution parts at a fraction of come a long way in a remarkably short space the cost of industrial printers and with ufacturers are turning out cost-effective and of time,” comments Max Milbredt, GTAI ex- a small carbon footprint. efficient machines for faster printing. pert for additive manufacturing. “Achieve- ments such as Bugatti’s caliper, or statistics in Germany leads in 3D printing surveys such as the recent VDMA finding that Oliver Sorkin, vice president Europe at Form- nearly every other machine-building compa- labs, an American 3D printing company with ny is using 3D-printed parts, show this.” He an office in Berlin, explains why Germany is believes the technology is on course to funda- capable of meeting the demand. “Three fac- mentally transform manufacturing process- tors are always critical in Germany,” he says. es. “On the current trajectory, it seems that “Firstly, Germany is a place for manufactur- additive manufacturing is not only useful to ing, both for hardware generally, and specifi- end-product consumers, but also approach- cally in the field of medicine. Secondly, a large ing readiness for industrial usage, which number of our customers, CAD/CAM users in would be a huge business opportunity.” advanced dental technologies, are in Germa- ny. And last but not least, the conveyor belt of Contact: talent in Germany, together with the world-re- [email protected] nowned universities and education institu- GTAI expert for additive

Photo: Formlabs, Inc. Formlabs, Photo: tions make Germany a hub in central Europe.” Source: Wohlers Report manufacturing 18 MARKETS GERMANY | Manufacturing The Spirit of Bauhaus

Foreign companies and investors value Germany’s product design expertise as much as they rate Germany as a first class industrial location, explains industrial design expert Uwe Gellert.

MASTERS OF DESIGN

Mr. Gellert, what can you tell us about Bauhaus values and traditions and use them Germany’s reputation as a center for in new fields. For example, we offer an inte- good product design? grated degree program that includes corpo- UWE GELLERT: Germany has a good reputa- rate and editorial design as well as product tion. We still benefit from the Bauhaus era. In design or digital publications, utilizing all the fact, many German product developers still new interactive and smart applications. We follow its design principles. Their role is not For some years now, Germany has been also see a product as a multi-faceted concept simply to beautify products, to decide on ma- known as a global export champion. The in which various factors are at play. terial, color and shape, but rather to develop “Made in Germany” label is recognized as a concept that promises easy handling of the seal of quality and reliability worldwide, What do these developments mean for product. Design is a complex process – the while demand for German products – from Germany as a design location? automobiles to washing machines and ra- value and benefits of a product are deeply GELLERT: In my opinion, German designers zors – remains high. Product design plays rooted in its design – and German develop- a significant role in Germany’s export are increasingly under pressure from inter- ers approach this process particularly strate- success, maintains the industrial design national competitors and must be careful gically. The design language in this country expert Professor Uwe Gellert. Gellert to remain on top. The Dutch, Spanish, Dan- is still strongly characterized by ergonomics has worked for internationally-renowned ish and especially the Chinese are getting and usability. companies in a number of industries. Af- stronger in the design field. While Germa- ter gaining experience abroad, he founded ny’s traditional strengths such as the use the design office Quantis and designed, Which recent global design trends have of high-quality materials are important to among other things, laboratory technology their roots in Germany? and machine tools. He now teaches prod- consumers and companies, they also come GELLERT: Germany is a giant in industrial uct design at Anhalt University of Applied at a price. So, as design gets increasingly technical products and stands for precise and Sciences in Dessau, one of the leading de- similar and the playing field starts to level reliable technology. German design is char- sign cities during the Bauhaus period from out, I wonder what is more important in our acterized by clever ideas, pared down to the 1919 to 1933. Markets Germany spoke to him fast-paced society: a long shelf-life or just a essentials, and without unnecessary embel- about why German design is so attractive cheap price? to foreign companies. lishment. There are numerous examples of successful German design trends, such as the How can Germany assert itself? design classics produced by electrical appli- man universities. That’s why more and more GELLERT: I hope that while keeping its rep- ance manufacturer Braun in its early years. foreigners are coming to Germany to study. utation for reliability and quality, Germany will also be a pioneer in terms of sustainabili- Is it fashionable for foreign companies to Why are product design courses at Ger- ty and environmental issues. New and smart have new products designed and devel- man universities so popular with foreign materials have great potential and many oped in Germany? students? high-quality materials can and should be re- GELLERT: Yes, absolutely. It is not only fash- GELLERT: Our universities have understood used. As a global export champion, Germany ionable but relatively straightforward: for- that there are no more pure product or graph- has a certain responsibility. eign companies can either set up a business ic designers. Many applicants to our univer- here or hire German design service providers sity in Dessau want to study groundbreaking Contact: and agencies. There’s also a trend for foreign Bauhaus design but they must appreciate [email protected] GTAI expert companies hiring design graduates from Ger- that the requirements have changed. We take Jacobshagen Uwe Photo: MARKETS GERMANY | Manufacturing 19

Design Legacy The Bauhaus Phenomenon

The Bauhaus is still remembered as the most famous school of design of the modern era. In 1919, Walter Gropius founded the school of art in Weimar, Germany with a dream of combining art and craft. For the last hundred years Gropius’s ideas have set the standard for successful design. If The iconic MR10 Side Chair designed something is functional, it is also estheti- in 1927 by Mies Van Der Rohe. In cally pleasing. Bauhaus products are “fit- 1930 he accepted the appointment for-purpose”: form follows function and as director of the Bauhaus in Dessau utility and efficiency are valued more high- and began his academic teaching. ly than decoration. With this philosophy at its heart, Germany has established itself on the international design market as the true North for industrial designers and has taken the lead with high-quality, simple products. Even a century on, Bauhaus design principles still serve as the basis for many successful products. Photos: picture alliance/Arcaid, Berthold Steinhilber/laif alliance/Arcaid, picture Photos:

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handelsvertreter.de is supported by Centralvereinigung Deutscher Wirtschaftsverbände für Handelsvermittlung und Vertrieb e.V (Federal Association of German Associations for Commercial Agencies and Distribution) 20 MARKETS GERMANY | Technology A Tale of Two Smart Cities

Urbanization and climate change are creating mounting challenges for cities around the world. Smart city projects across Germany are developing and testing new solutions and sustainable models for the cities of tomorrow.

DIGITAL CITIES

What’s in the Smart City tool kit? ith 55 percent of the world’s struction. This diversity makes the area ideal There are few aspects of urban living population now residing in which will not be transformed in the for testing new ideas,” he says. W built-up areas, humanity has be- smart cities of the future... The project aims to refurbish around 600 come an urban species. In just over 30 years, residential apartments to make them more another 2.5bn people will reside in cities. Smart city approaches encompass techni- energy-efficient. In addition, the project is Across Germany, smart city projects have cal, digital and social innovations that aim providing funding to modernize building to make cities more efficient, ecological been launched that employ urban tech, ICT envelopes and heating systems, as well as for and resilient in the face of urbanization, and the Internet of Things to address the so- shifting demographics and climate change. new solar-thermal and PV systems. cial, economic and environmental challeng- The smart city tool kit includes digital ap- “The PV systems can send surplus gener- es caused by growing urbanization. The proj- proaches based on big data, the Internet ation to a central virtual power plant with bat- ects are often run in collaboration with the of Things including sensors, the ubiquity of tery storage, which helps improve grid stabil- private sector, universities and local utilities the smartphone and “analogue” concepts ity. The district heating network, which is fed and aim to develop solutions for the cities of such as intelligent city planning and social from a local geothermal plant, is being fitted initiatives. the 21st century. with ten innovative heat substations to ensure “We need to change our approach toward low return temperatures to the grid, which everything from transportation and energy to in cities with fewer than 500,000 inhabitants, greatly improves efficiency,” Klassen notes. climate resilience and resource efficiency if which means the smart living labs here are Specially designed smart LED lampposts our conurbations are to continue to function perfect for developing solutions that can be with extra space inside for additional equip- and provide citizens a good quality of life,” replicated around the world,” he explains. ment have been erected. Environmental says Rob Compton of GTAI, who helps com- monitoring, parking management, adaptive panies offering urban solutions to expand to Modernizing Munich lighting, free Wi-Fi, traffic control and adap- Germany. “We’re seeing international invest- Nevertheless, one of the largest smart city tive lighting are just some of the ideas being ment coming from the ICT, e-mobility, logis- projects is being carried out in Munich, which tested. “We’re keen for companies to get in- tics, green construction and environmental by 2035 is expected to see its population rise volved through the regular calls for tender,” technology sectors especially.” by about 300,000 to reach 1.85m. Bernhard says Klassen. Compton says German smart cities pro- Klassen, project leader of the E.U.-funded vide an ideal model for urban planners world- project “Smarter Together Munich” in the Small and smart: Bottrop wide because many of the country’s cities and City of Munich, outlines the scope of the proj- At the other end of the scale, Bottrop, with towns have a broad range of buildings and ect: “We’re working in two neighborhoods a population of just 117,000, is one of Ger- infrastructures and are not especially large. that have around 30,000 residents and build- many’s smaller cities. In 2010, Bottrop was “Half of the world’s urban population resides ings from the 60s and 70s as well as new con- selected by the InnovationCity Ruhr com- MARKETS GERMANY | Technology 21 The Tetrahedron is a viewing platform which stands over the Beckstrasse slag- heap in Bottrop, North Rhine-Westphalia. Part of the Route of Industrial Heritage, it offers a panoramic view of the Ruhr area. Photo: Gaasterland/laif Photo:

TRANSPORTATION

petition as a “typical town” to become a role E-mobility powers as to create an attractive cityscape and devel- model for the renovation of the entire Ruhr op climate-resilient land use.” region, the largest conurbation in Germany ahead in Munich The project has seen 1,000 buildings un- with more than five million inhabitants. The dergo energy-efficient renovation and the in- initiative comprises 300 projects in a neigh- From EV charging stations to electric tri- stallation of a heat network and 100 cogenera- cycles, there are green solutions for all. borhood of 70,000 citizens. tion plants. Green façades and living roofs are “The Ruhr region has long been home Eight new e-mobility stations will be in- being created to assess their ability to reduce to heavy industry such as iron and steel stalled in Munich to complement existing the heat island effect, where urban areas are foundries and coal mining,” says Rüdiger public transportation. The stations bring significantly warmer than surrounding rural Schumann from Innovation City Manage- together the city’s car sharing scheme in- areas. “Model City Bottrop has proved a great ment, which runs the project. “However, the cluding ten extra electric cars, the existing success in so many ways,” says Schumann. “It public bike rental system, electric bicycles industrial landscape has changed and now has now been rolled out to 20 further areas and electric freight trikes, EV charging sta- Bottrop is pursuing a rigorous program of ur- tions and a central information display. Two and that’s something we’re very proud of.” ban redevelopment that respects its industri- of the stations will feature district sharing “Perhaps most importantly, civic engage- al heritage,” he continues. boxes, which resemble the luggage lockers ment has been at the heart of both projects,” “Many of the buildings in the project at train stations. Companies can use them Compton notes. Germany’s living labs are be- area were built between the 1950s and 70s, so as central delivery points, reducing the ing watched closely and will help shape the we’ve had a strong focus on energy-efficient volume of delivery traffic. Local shops can future of cities around the world. also deliver to the boxes, some of which are building renovation. Other central elements refrigerated. This means residents can pick are energy storage and new renewable gen- up regional produce that is delivered while Contact: eration capacity, e-mobility and new ways to they are at work, thus benefiting the local [email protected] reduce freight and passenger traffic, as well economy. The first station opened in July. GTAI expert for energy efficiency 22 MARKETS GERMANY | Technology Old to Gold

Berlin-based startup Auto1 has quickly become the biggest used car dealer in Europe, thanks in part to foreign investors who saw the potential in the fast-growing company and the rising demand for used cars over new vehicles.

uto1 Group operates online car in Auto1 through its SoftBank Vision Fund mann. Annual revenue last year rose 47 per- trading platforms that enable in- in return for a 20 percent share. The invest- cent to €2.2bn, while the number of car sales A dividuals and dealers to buy and ment increased the group’s value to €2.9bn, reached 420,000, up from just 224 in its first sell cars throughout Europe, including making it the most highly-prized startup in year. Its success reflects the current boom in wirkaufendeinauto.de and autohero.com for Europe after Spotify, and will support its in- Germany’s used car market – last year twice consumers and its B2B arm auto1.com. Auto1 ternational expansion plans. as many used cars were sold than new cars. guarantees that it will buy every used car Established in 2012 by joint CEOs Chris- regardless of make, model or condition and tian Bertermann and Hakan Koç with a team Revving up the market it also takes the hassle out of selling by han- of seven employees, Auto1 now boasts a work- In an interview with German newspaper dling the red tape for customers, for example force of more than 3,000 and operates in over Handelsblatt, the CEO of SoftBank Invest- canceling car registrations. 30 countries through 45,000 dealer partners. ment Advisers Rajeev Misra said Auto1 was Earlier this year SoftBank Investment Auto1 is experiencing strong organic “very well positioned” to fundamentally Advisers, a division of Japanese technology growth, both in sales and the expansion of its change the used car market. “We want to turn giant SoftBank Group Corp., invested €460m on-site branch presence, according to Berter- Auto1 into a global company,” he added. In addition to its European presence, the com- INNOVATORS pany is set to expand into the U.S., China, Ja- pan and other markets. Auto1’s proprietary technology – in par- The joint CEOs and ticular an algorithm that determines the co-founders of the Auto1 Group Christian value and price of a car that the company is Bertermann (left) and prepared to pay a private seller in seconds – Hakan Koç at their is what piqued interest from the fund’s oper- Berlin headquarters. ators. “Auto1 Group has built a fast growing, data-enabled platform introducing efficiency and transparency to the fragmented used car market, which is worth more than $300bn annually,” says Akshay Naheta, a partner at SoftBank Investment Advisors, who is now on the Auto1 board. Describing SoftBank as a strategic partner “who shares our vision of connecting the world’s supply and demand for mobility,” CEO Koç comments that the Vision Fund investment and technology expertise will support Auto1’s continued growth. Auto1 will 420k €2.2bn 7.3m €85bn keep its foot on the accelerator until it reach- Total number Total revenues Total number of Total value of es its long-term goal of ten percent European of vehicles sold taken by Auto1 vehicles resold in used cars sold in market share. by Auto1 1) in 2017 1) Germany in 2017 2) Germany in 2017 2)

Contact: [email protected]

1) Source: Auto1; 2) More than double the number of new cars. Source: Handelsblatt/Federal Statistical Office GTAI automotive expert GmbH Group AUTO1 Photo: MARKETS GERMANY | Investors 23

Common Goals in Madrid

Germany Trade & Invest and the German-Spanish Chamber of Commerce complement their services in order to create business opportunities for German and Spanish companies in both countries. How exactly do they cooperate and what binds these two major euro economies together?

Working together to promote Spanish-German economic relations: Miriam Neubert, GTAI correspondent in Madrid since 2014 and Walther von Plettenberg, CEO of the German-Spanish Chamber of Commerce since 2010.

he German-Spanish Chamber of Commerce (AHK Spain) celebrated T its 100th Anniversary 2017, while Germany Trade & Invest sent its first correspondent to Madrid 60 years ago. The two have been at the same address for a long time and the current renovations within the AHK are tending toward it becoming a co-working space. Markets Germany asked Miriam Neu- bert, head of GTAI Madrid and AHK Spain CEO Walther von Plettenberg what makes the Iberian peninsular country so interesting for Germany.

Mr. von Plettenberg, Spain fell into a deep recession during the global financial crisis, but is now recovering. How is the feeling about the economy at the moment? VON PLETTENBERG: Positive. The domestic top producer of plasma-based medicines, has Spain and Germany we can always rely on. economy has shown three consecutive years spent €220m buying 35 German plasma-do- AHK Spain advises German and Spanish cli- of three percent-plus growth and is expected nation centers. The ties in the car industry are ents, organizes bilateral entrepreneur meet- to grow more moderately but still robustly in traditionally close as Spain is the second-larg- ings, promotes a German-Spanish startup eco- 2018 and 2019. Many companies did not sur- est car producer in Europe after Germany. system and implements vocational training. vive the recession, but the more competitive NEUBERT: We coordinate our efforts. When in- ones have managed to export their way out Is the “Made in Germany” brand signifi- terested parties come to our doors, our services of the crisis. While the large companies have cant in Spain as a mark of quality? complement each other. The latest example is been active in Germany for a long time, more NEUBERT: Very much so. Germany is fre- an “Observatory” in which the AHK Spain pub- medium-sized companies are also muscling quently a benchmark, not only for technology, lishes GTAI fact sheets in Spanish on interest- in on the action now. But at only 0.6 percent reliability and efficiency, but also for its domes- ing investment industries in Germany. of all Spanish companies, this group is over tic assets such as the mid-sized manufacturers four times smaller than in Germany. known as Mittelstand, its industrial strength and vocational education and training. Contact: [email protected] Ms. Neubert, which industry in Germany VON PLETTENBERG: This positive percep- Director of the GTAI office Spain tion is backed up by the German companies is most interesting to Spanish companies and Portugal right now? operating in Spain due to their success and [email protected] Those industries in which Spain their long-term engagement. NEUBERT: Executive Unit Strategic Part- is strong; renewable energies, for example. nerships (GTAI) and liaison to the The energy company Iberdrola has invested How do the AHK Spain and GTAI support German Chamber Network €1.4bn in the Wikinger Offshore Windpark, each other? [email protected] close to the Island of Rügen in the Baltic Sea, VON PLETTENBERG: The GTAI office pro- Dr. Walther von Plettenberg, and is developing its capacity further. The vides comprehensive market reports, special CEO of the German-Spanish

Photo: AHK Spanien Photo: health industry is also interesting: Grifols, a sector analysis and actual economic data for Chamber of Commerce 24 MARKETS GERMANY | Opinion Speaking for Germany

Peter Altmaier is the Federal Minister for Economic Affairs and Energy. Markets Germany talks to him about prospects for the automobile and energy industries, the “Made in Germany” brand, and what is attracting foreign investors.

r. Altmaier, Germany has the sions scandal and the somewhat drawn- in the wake of the scandal the government largest population in Europe, out process of forming a government itself has put into place a series of concrete M the “Made in Germany” brand have harmed that image. Is it lasting measures to prevent any repeat – for exam- is unique and is often a decision-clincher damage? Or is it simply a case of the coun- ple, producers must now perform the test for success overseas. Germany’s research try having problems just like any other? procedures on their emissions systems pub- landscape is at the forefront in the world, ALTMAIER: I don’t really see much damage licly, emissions testing in real road condi- its workers are well-educated and mo- to the overall image. The diesel emissions tions has been extended and a public testing tivated. Yet there is a shortage of skilled scandal is a warning for the leadership and laboratory is being built at the Federal Motor workers, the expansion of broadband is governance in the companies involved. But Transport Authority. And while it is correct lagging behind and – in comparison with that the process of forming a government other European countries – the energy took some time, there were extraordinary prices are high. How would you convince circumstances surrounding that process that a foreign investor to come to Germany? are unlikely to be repeated. PETER ALTMAIER: Germany is an open, at- »Germany tractive and world-renowned investment The automotive industry is crucial to location. Investors can build upon the foun- is an open, Germany’s economy. In electromobility, dations of well-educated workers, a stable, however, there is already very strong com- quality environment and great legal secu- attractive petition and the industry is facing huge rity. Foreign direct investment in Germany challenges. Can Germany remain at the pin- has risen consistently since 2010, 20 percent and world- nacle of the global automobile industry? overall against the 2010 level, and in 2015 it ALTMAIER: The automotive industry is by reached a value of €466bn. Some 80,000 renowned some distance the most important industrial foreign companies, employing around 3.7m investment sector in Germany’s economy, with 820,000 people, are located in Germany. These stats employees and a turnover of €423bn in 2017. paint a very clear picture: Germany is a good location.« It is a world leader in product and process in- location for foreign investors. novation. The industry has to start using this Peter Altmaier know-how actively if it is to continue playing Federal Minister for Economic Reliability and Germany – these used to a leading role in a continually changing glob- Affairs and Energy be synonymous in German products and al market. The industry must set itself the tar- in German politics. But the diesel emis- get of remaining a global leader. MARKETS GERMANY | Opinion 25

In March, Peter Altmaier was appointed Federal Minister for Economic Affairs and Energy.

2013-2018 Head of the Federal Chancellery, Federal Minister for Special Tasks and the refugee coordinator of the German Federal Government (since 2015). 2012-2013 Federal Minister for the Environment, Nature Conser- vation and Nuclear Safety. 2009-2012 Parliamentary secretary of the CDU/CSU parliamentary group. 2005-2009 Parliamentary state secretary in the Federal Ministry of the Interior. 2004-2005 Parliamentary legal counsel of the CDU/CSU parliamentary group. Photo: Jonas Holthaus/laif Photo:

Peter Altmaier is a passionate believer in free trade. He openly welcomes foreign investors to Germany but remains cautious of what he calls “state-driven strategic investments.”

How would you convince an energy-in- for energy-intensive companies are, relative supply the ideas for the energy transition either, tensive company to locate to Germany? to other parts of Europe, low – and that with rather they contribute to the process with their ALTMAIER: For the same reasons as any oth- an extremely reliable supply. energy efficiency optimizations, increased flex- er company: they can rely upon excellent We have made huge steps in Germany to- ibility and improved load management. infrastructure and superbly-educated labor. ward restructuring our energy supply while There are innovative clusters and an excel- keeping energy-intensive industries in mind. Are Chinese investors still welcome in Ger- lent R&D landscape. High energy prices are This will remain so, as we know that energy-in- many? The attitude toward Chinese com- not a competitive disadvantage. Under the tensive companies are at the centre of industri- panies seems recently to have been some- existing balancing system, the energy costs al value creation in Germany. They don’t just what critical, both in public and in politics. 26 MARKETS GERMANY | Opinion

»Germany is in a better state than it’s ever been, in spite of global

uncertainty..«

Peter Altmaier, Federal Minister for Economic Affairs and Energy

ALTMAIER: The E.U. and Germany are open current global uncertainty, Germany’s out- tunity for companies and the population. It is investment locations. This is a good thing look is positive. The global economy contin- now up to companies to recognize the signs and should remain so. Local and foreign ues to grow and strengthen Germany’s export of the times and adapt to them, particularly companies are, as a rule, treated exactly sector. Germany’s economic health is closely those producing for the global market. We the same. But our open doors must not be linked to the global economy. A strong export will stand close by and consult with the com- an invitation for the industry-political or economy needs open markets. So we need to panies to some extent in the Mittelstand 4.0 geo-strategic interests of other states, with continue our trade interests without escalat- competence centers. As artificial intelligence state-owned or state-sponsored companies ing any conflicts. That can only exist with our is becoming the key technology of the future who endanger our critical infrastructure and European partners: even if other countries we must be leaders in this field and not de- thereby threaten national security. And we seem to be shying away from multilateral co- pend on others. And crucially, Germany and demand fair competition both in trade and operation, the E.U. has to be a fair and reli- Europe must be leaders in transferring and investment. For example, trade barriers and able trading partner. sharing innovative solutions. unequal treatment of foreign companies prevent German companies in some locations Employee rights in Germany are extreme- Germany, and especially Berlin, is one overseas from realizing their full value po- ly strong. Many businesspeople in other of the world’s most attractive locations tential. We will therefore continue to make countries just don’t get the institutions for startup founders. But the debates on representations for the removal of all barriers of works councils or the voting rights of refugee immigration and the success of and a level playing field. employees within companies. How do populist political parties could cause for- you convince potential investors about eigners to doubt whether they really are Can Germany still afford to strongly rep- the “German model”? welcome. Against this background, how resent free markets and be so open to for- ALTMAIER: Employee representation in Ger- would you convince a foreign founder to eign investors, given the current protec- many is a major foundation of our social mar- come to Germany? tionist tendencies throughout the world? ket economy and an integral part of German ALTMAIER: Germany is and will remain an ALTMAIER: I have always been clear on this: corporate and company culture. The “Ger- open country and a good location for inter- an end to open markets is useless for us. Se- man model” provides a regulated system for national companies and their employees. The clusion negates growth. We stand for a free, conflict resolution that contributes to social current debates, however heated they may fair and well-regulated trade environment. harmony, which makes it an important loca- get, don’t change that. Fortunately, the rel- And we are now standing together with It- tion factor for investors. Not least because of evance of populist parties is much less here aly and France to call for the creation of an this was the German economy able to survive than in other major countries in the world, de- E.U. framework to examine foreign direct in- the effects of the global financial crisis better spite the fall-out from the 2015 refugee crisis. vestments. Member states must be equipped than many other industrial countries. So em- In pretty much every industry there are suc- with the right regulatory systems in order to ployee representation is a location advantage cessful entrepreneurs with immigrant roots. detect, regulate and/or prevent state-driven to investors. There are generous assistance programs for or state-financed strategic investments. innovative founders and ideas, such as the How important is digitalization for Busi- EXIST program, where almost 20 percent of Do you still think that Germany benefits ness Location Germany? Is it an opportu- the participants are of foreign origin. The pilot from a free market and foreign investors? nity or a threat? project “Startup your future” actively targets ALTMAIER: Yes I do. Germany is in a better ALTMAIER: Above all, it is unstoppable. But introducing refugees to experienced entre- state than it’s ever been. In spite of all the the digital transformation brings huge oppor- preneurs in the Brandenburg-Berlin region. 1. Register: at MARKETS GERMANYwww.gtai.com/ | Opinion 27 publications

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