GOLDEN OLDIES Young-At-Heart Seniors Are Opening up a Vast New Market with Great Investment Potential in Germany

Issue 2 / April 2014 The Business Magazine markets Germany

GOLDEN OLDIES Young-at-heart seniors are opening up a vast new market with great investment potential in Germany. How can you get involved?

On a Health Trip Medical and health tourism in Germany is booming p10

Digital Ad-Ventures Pop-ups become passé as online marketing goes exponential p14

High in Fiber, Low in Weight Carbon ﬁber: It’s in cars, it’s in planes, it’s the plastics superman! p16 editorial

D ear Reader, When it comes to promoting foreign trade, a network of institutions with different areas of expertise is key to success, and interaction between the various actors is crucial. We at Germany Trade & Invest are lucky enough to have this combination in our partnership with the German missions abroad, with whom we work hand in hand to serve as a central point of contact for interested companies around the world.

The missions represent Germany abroad, negotiate with the governments of foreign countries, foster political ties, and promote economic, cultural, and scientiﬁc cooperation. GTAI’s focus is on marketing Germany as a location for business and technology, providing German companies with information about foreign markets, and assisting foreign companies interested in establishing a presence in Germany.

We consistently cooperate both at home and abroad, as part of a trusting relationship in which each organization is responsible for its own share of the work. In late 2013, we signed a joint partnership agreement with the goal of improving the efﬁciency and effectiveness of the tools and activities used in foreign trade promotion – to the beneﬁt of the export-oriented German economy and foreign investors.

This partnership is complemented by the presence of the German Chambers of Commerce Worldwide Network (AHKs). The cooperation and regular exchange of ideas between the organizations means that companies interested in investing in Germany can expect to receive extensive information and support.

markets Dr. Benno Bunse Chairman/CEO Germany is also available as an app! Just scan this QR code and subscribe! Contents

COVER STORY Golden Oldies ...... 6 A World of Connections ...... 26 Ready, Set, Order ...... 26 LOCATION On a Health Trip ...... 10 MY GERMANY ...... 3 Bye-Bye Bureaucracy ...... 11 NEWS ...... 4 Meet the Mittelstand ...... 12 MEDIA ...... 23 Energy Autarky ...... 13 FACTS & FIGURES: In a Class of its Own ...... 27

BUSINESS Digital Ad-Ventures ...... 14

INDUSTRY Issue 2 / April 2014 The Business Magazine Don’t want to miss an edition High in Fiber, Low in Weight ...... 16 markets Germany of markets Germany? Tiny Technology, Big Ideas ...... 18 Order your free subscription Charging Down the Autobahn ...... 20 on page 25. GOLDEN OLDIES Young-at-heart seniors are opening up a vast The New Buzz ...... 21 new market with great investment potential in Germany. How can you get involved?

SUCCESS Cover On a Health Trip Patricia Toth Mc Cormick/Getty Images/Flickr Open (M) Medical and health tourism in Germany is booming p10 The Need for Speed ...... 22 Digital Ad-Ventures Pop-ups become passé as online marketing goes exponential p14

High in Fiber, Low in Weight Carbon ﬁber: It’s in cars, it’s in planes, it’s the plastics superman! p16 ABOUT US

Integrated Industry ...... 24 Hultsch/LEG Thüringen (M) (p3) (p2); Andreas & Invest Germany Trade Photos:

2 markets Germany 2/2014 my germany

From Australia to Thuringia

My heart chose Germany. The German culture of quality and excellence is what ‘Made in Germany’ is all about. By investing in Germany and manufacturing our wire decking and backing systems here, we plan to “embody this culture as a key part of our product offer. This investment will also see our award-winning EXPRESSIT e-commerce platform directly integrated into an advanced manufacturing environment delivering world-class efficiency. Being here allows us to enjoy the confidence of the business environment, the size of market, and proximity to our customers. In terms of surmount- ing relocation hurdles, Germany Trade & Invest and the State Development Corporation of Thuringia have been absolutely first-class – 10 out of 10!

Stephen Eddowes, Managing Director, Delta Shelving Systems GmbH www.deltashelving.com

Want to know more? Check out OnlinePlus for the full interview! Photos: Germany Trade & Invest (p2); Andreas Hultsch/LEG Thüringen (M) (p3) (p2); Andreas & Invest Germany Trade Photos: news

in brief

INFORMATION TECHNOLOGY

POWERING INNOVATION A pioneer in magnetic data storage and spintronics might soon be coming to Ger- many. Renowned solid state physicist Stuart Parkin, the head of the IBM Al- maden Research Center in San Jose, California, has been invited to become a professor at the Martin Luther University Halle-Wittenberg and the director of the Max Planck Institute of Microstructure Physics for ﬁve years. The award, which comes with EUR 5 million in funding, is granted by the Alexander von Hum- boldt Foundation and funded by the Federal Ministry of Educa- tion and Research.

TREND

OUTDOOR IS IN! Inputs from Germany’s Outdoor sports are enjoying a popularity neighboring countries are boom in Germany – and so is their cloth- becoming increasingly ing. In 2012, German sporting-goods re- important to its export tailers saw sales jump by around EUR trade. 140 million to EUR 7.34 billion, primarily driven by skyrocketing demand for outdoor textiles. This trend has prompted foreign companies, such as The North Face, to boost their presence in Germany. SETTING THE RECORD STRAIGHT FDI Export. Criticism of Germany’s thriving export economy ignores CARNIVAL OF INVESTMENTS how its competitive strength benefits its partners. As Brazil’s economy expands, its investors are increasingly turning their atten- tion to Germany because its companies ermany has recently faced criticism of protection for investors.” In fact, Germa- “stand for quality and technological in- suggesting that its current account ny’s trade surplus relative to those of its eu- novation” and “present attractive means Gsurplus is growing at the expense of its ro-zone partners shrank by almost half be- of diversification,” a 2013 study by Com- neighbors. But there are many reasons to tween 2007 and 2012. merzbank and KPMG stated. Recent believe such criticism is unjustified. Take, Several publications have identified landmark transactions include the for example, the argument recently pre- the presumption that what benefits Ger- Brazilian steel giant CSN purchasing sented by the Ifo Institute for Economic Re- many hurts its neighbors as a flaw in the Stahlwerke Thüringen for EUR 482.5 search. While noting that in 2013 Germany critic’s logic. They point, for example, to million, Brazilian plastics manufacturer likely recorded its highest current account another Ifo study that finds inputs from Braskem acquiring two production fa- surplus to date (an estimated EUR 200 bil- other countries make up a growing share cilities in Germany from the Dow Chem- lion), the Munich-based think tank argues of German exports, as well as to a study ical Company for USD 323 million, and that the surplus “has remained high large- by the Kiel Institute for the World Econo- Indústrias Romi, a leading Brazilian ly as a result of the low competitiveness of my (IFW) which notes that German firms maker of plastic processing equipment many of Germany’s partner countries.” export a disproportionately high share of and machine tools, paying EUR 20.5 Nevertheless, the implications of Germa- these inputs compared with their foreign million for Burkhardt + Weber, a pio- ny’s growth in regard to imports and living competitors. neering maker of high-precision ma- standards in crisis-afflicted euro-zone chine tools in Reutlingen. countries “have largely been mitigated by > www.bit.ly/1binIjt

bail-out credit and the collective promise > http://bit.ly/1h7WH0Q (M) (p5) Vdovin/FotoS.A./Corbis Ivan laif; A-Digit/iStockphoto; (p4); Siemens AG; Vectors Images/iStock lvcandy/Getty Fitzer/iStockphoto; Photos:

4 markets Germany 2/2014 news

KEEPING ON THE DUAL TRACK

Recent years have seen growing interest from abroad in Germany’s traditional system of dual vocational training, a unique combination of learning in classrooms and appren- Germany’s industrially ticeships in companies. Indeed, many strong economy inspires governments believe the system confidence in investors. might help in the fight against youth unemployment and an anticipated shortage of skilled workers. In response to this demand, Germa- ny’s Federal Ministry of Education and Research (BMBF) launched the ON THE UP AND UP Central Office for International Voca- tional Education and Training Coop- Investor Attitudes. Confidence in Germany’s economy eration in September 2013. The new has reached a seven-year high, and predictions for the near office, housed in the Federal Institute for Vocational Education and Train- future remain positive. ing (BIBB) in Bonn, will coordinate all of the federal government’s interna- n December 2013, investment senti- also rose to its highest level since May tional collaborations related to voca- ment in Germany hit its highest mark 2012. This outlook was also reflected tional training. Isince April 2006, according to the in- by the Business Climate Index for investor confidence index of the dustry and trade in Germany, released > www.bibb.de Mannheim-based Centre for European in December by the Ifo economic think Economic Research (ZEW). And the tank. The index found that, as the glob- good news continued into January, al economic environment has im- when the figure only slightly decreased. proved and uncertainty decreased, Economic expectations are “hovering German manufacturers’ optimism has at a high level,” the ZEW wrote, which risen to its highest level since the seems to confirm the economic up- spring of 2011 and that the German swing analysts have expected. The ex- economy is “in a festive mood.” perts’ January assessment of the current economic situation in Germany NURTURING TALENT IN GERMANY Qualification. Education scores highly in AmCham Germany’s annual business barometer.

inety-eight percent is not rated Germany’s well-educat- of gaining a competitive advantage in a bad pass mark for any ed workforce as its greatest key practical industries for a long time. Wirtschaftsstandort exam in any country. So Deutschland 2014 strength when it comes to at- The system ensures that we have the Wie US-Investoren Situation und N Perspektiven einschätzen those in charge of Germany’s tracting foreign investment. brains for innovation, and the well- XI. AmCham Germany Business Barometer education system must be de- Umfrage Frühjahr 2014 The infrastructure (supplier trained ‘brawn’ to put it into practice,” lighted with the grade given networks) and R&D land- says Dr. Benno Bunse, CEO of Germany to them by the members of scape came in second and Trade & Invest. the American Chamber of third with 86 percent approv- Furthermore, nearly 80 percent of Commerce in Germany (Am- al each. For nearly every third surveyed companies anticipate an increase Cham) in March 2014. American company, Germa- in sales in Germany, just under 50 per - In the annual AmCham ny is Europe’s top business cent foresee increased investment, and Germany Business Barometer, location. 41 percent expect to take on more work- a survey completed by the organization’s “We have placed emphasis on our ers. Sixty percent intend to increase busi- 3,000 German-based members, 98 percent unique dual education and vocational ness activity in Germany within the next

Photos: Fitzer/iStockphoto; lvcandy/Getty Images/iStock Vectors (p4); Siemens AG; laif; A-Digit/iStockphoto; Ivan Vdovin/FotoS.A./Corbis (M) (p5) Vdovin/FotoS.A./Corbis Ivan laif; A-Digit/iStockphoto; (p4); Siemens AG; Vectors Images/iStock lvcandy/Getty Fitzer/iStockphoto; Photos: of the American companies questioned training system in Germany as a means three years.

2/2014 markets Germany 5 cover story

By 2035, Germany will have over GOLDEN 24 million people OLDIES aged 65 plus. Silver Economy. Sixty is the new ﬁfty. That’s a crucial message for companies as demographic change opens up a vast new market over the next few decades. This trend is more pronounced in Germany, where the active over-50s age group provides huge potential for investment, innovation, and development.

Europe is facing signi cant demographic change over the next 25 years. However, demographic change is not just a political challenge; it is also an investment opportunity. Photos: Patricia Toth Mc Cormick/Getty Images/Flickr Open (M) (p6); Benjamin Carr/Tuvie Design (M); GTX Corp (M); Fujitsu (M) (p7) Corp (M); Fujitsu Design (M); GTX Mc Cormick/Getty Images/Flickr Open (M) (p6); Benjamin Carr/Tuvie Toth Patricia Photos:

6 markets Germany 2/2014 cover story

The net By 2035, disposable income Germany will have over of married couples aged 65 24 million people and over averages aged 65 plus. EUR 2,440.

hey used to be referred to, perhaps a Melanie Wiegand, leading expert in the little dismissively, as the elderly. Now field of demographic change at Germany Sales of wheeled T they’re being wooed as “Active Agers,” Trade & Invest, the economic devel- walkers like this one “Best Agers,” and “Power Oldies.” Corpo- opment agency of the Federal Republic from the US rate managers and research departments of Germany. “The over-50s already con- company trionic have woken up to the untold market op- stitute an important consumer group in have increased portunities that this fast-growing seg- terms of numbers and purchasing pow- signi cantly in ment of the population offers – especially er. The German market for older people recent years. in Germany, whose rapidly aging society also offers a lot of innovative potential is producing millions of consumers with for products and services. Solutions specific needs and deep pockets. have yet to be found for many require- By 2035, Germany’s over-65 popula- ments. That makes Germany an ex- tion will number 24 million, up from the tremely interesting market for foreign current 17 million. That will be an in- investors.” Wiegand adds, “Because Ger- crease to a third of the total population, many is one of the societies aging most up from around a fifth, according to the quickly, companies that successfully es- Federal Statistical Office. The number of tablish a foothold here will be in a prom- Fit on their feet! GIX people aged 50 and over will amount to ising position to launch into the Euro- sneakers include a half the population, up from 39 percent. pean and international markets.” GPS transmitter that More important, the net disposable in- is ideal for keeping come of married couples aged 65 and Take the development of the wheeled track of patients over currently averages EUR 2,440. Be- walker invented in Sweden and first in- suffering from cause older people tend to live in smaller troduced in Germany in 1990. Initially, dementia. households, their per capita income is they were grey, heavy, and unwieldy con- higher than that of younger people. traptions. But the sector is now booming, with some two dozen companies in It’s an inexorable development, result- Germany providing a range of state-of- ing from weak birthrates and increased the-art, visually appealing walkers for life expectancy. Furthermore, it is one every occasion from hiking excursions that is affecting the whole of Europe. and golf to hunting. Some models come However, the trend is strongest in Ger- complete with umbrella and drink hold- many, which already has a higher pro- ers, integrated shopping bags, horns, portion of over-65s than any other coun- and headlights that switch on automati- Fujitsu has developed try in the European Union (EU). Conse- cally. Developers are even working on a walking stick with quently, Germany is predestined to be navigation systems that help people find a navigation Europe’s leading market in this area, their way home. The premium models system, useful for providing huge growth potential for for- cost upwards of EUR 250. both the walker eign investors in industries as diverse as “The walker has turned into a and family or health, tourism, furniture, household kind of status symbol,” says Thomas carers wishing to appliances, and hygiene. Appel, head of the German subsidiary of locate the user. “The bigger a market for new Topro, a Norwegian manufacturer of products and services is, the faster in- walkers. “The market for them in the pri-

Photos: Patricia Toth Mc Cormick/Getty Images/Flickr Open (M) (p6); Benjamin Carr/Tuvie Design (M); GTX Corp (M); Fujitsu (M) (p7) Corp (M); Fujitsu Design (M); GTX Mc Cormick/Getty Images/Flickr Open (M) (p6); Benjamin Carr/Tuvie Toth Patricia Photos: vestments in it can be recouped,” says vate sector has grown at double-digit

2/2014 markets Germany 7 cover story

Half of people aged 60 to 70 like to experiment with what they wear. Thomas Appel, managing director of Topro, a subsidiary of Norwegian wheeled walker manufacturer Topro AS, and a consultant on product development for older people. rates per year in recent years, and there How will the aging of society im- are two to three million of them on Ger- Computer-based pact the economy? man streets.” Furthermore, he expects technologies, like this Appel: All areas of industry will the growth to continue unabated. easy-to-use have to take account of this demo- Another profitable area stems from keyboard, are graphic trend in their product de- the mounting incidence of dementia. expected to velopment. The upcoming silver This increase is spawning new products take off. generations will be more receptive such as an interactive robot in the form to new technologies than the cur- of a cute baby seal developed by Japanese rent postwar generation because industrial automation company AIST. they already use such products to- Called Paro, it emits soothing noises, day. At the moment, a growing helps reduce stress, and stimulates inter- number of universities is research- action between patients and their car- ing age-specific product developers, the company says. ment in a wide array of fields ranging from architecture and engineer- Demand for such products is set to surge, ing to industrial design. as are computer-based technologies: Argos Information, a company based in the The Volkswagen What areas of industry will be- southern German city of Würzburg, of- Sharan was named come particularly important? fers GPS tracking devices with which rel- the most Appel: Converting residential prop- atives or retirement homes can equip de- senior-friendly car erty to enable people to live at home mentia patients to ensure they don’t get in a survey by ADAC for longer will be a major field. As- lost, for example. Additionally, research- in 2013. sisted living that still enables auton- ers in Japan are even working on a robot omy will also be a very big growth that goes shopping with people and area. We need systems that people helps them choose their groceries. For can trust without feeling that its part, the German government is pro- they’ve got to run around with a red moting research into product develop- emergency button all the time. ment for the silver economy. New technology will help significantly improve What are less immediate effects? older generations’ quality of life and en- Appel: The silver generation is very, hance safety. very careful when deciding on But the boom isn’t just affecting whether to purchase new product industries and services that address the The Paro robot seal is innovations. They have to be tried ailments of age. A recent study by TNS In- an interactive robot and tested, of high quality, and fratest found that 75 percent of people often used in the above all, safe. If that’s guaranteed, aged over 60 feel younger than they are. care of elderly the silver generation is quick to ac- Gone are the days when retirement patients with cept products that will help them meant donning a beige cardigan, tinker- dementia. stay independent, and they have the ing in the garden shed, or knitting sweat- purchasing power. ers by the fire. Older people are much more active

Photos: GTAI; Duka pc (M); VW (M); Technisches Museum Wien (M) (p8); GTAI (p9) Museum Wien (M) (p8); GTAI Duka pc (M); VW Technisches GTAI; Photos: than they used to be. They travel, engage

8 markets Germany 2/2014 cover story

Almost 75 percent of people aged over 60 a third of buyers of new cars in 2012 feel younger were over than they are. 60.

in sport and outdoor activities, and particularly enticing prospect for people One in ten people in Germany carries on want to embrace the Internet and all it of a certain age. Companies are pledging working even though they are old has to offer. They also want to look good major advances in this technology over enough to retire. Their number has dou- while doing it. According to the TNS In- the coming decade – and “Best Agers” bled since 1996 to 425,000, according fratest study, half of people aged 60 to 70 are well placed to purchase and benefit to the Federal Institute for Population like to experiment with what they wear. from such innovative features. Research. In fact, only the 18 to 29 age group is “People who retire today tend to These big numbers send a clear similarly interested in fashion. have considerable financial resources,” message to foreign investors: Jump on The lust for life and for the great says Wiegand. “Compared with younger board, ride Germany’s silver wave, and outdoors is further reflected in the age groups, older people are materially make the most of the opportunities that booming market for electric bikes in better off on average, and they are the “golden oldies” in Europe’s largest Germany, with 420,000 estimated sales frequently property owners. They also economy are presenting. Success here in 2013, up from 50,000 in 2007. “Most of have the option of drawing on lifelong could set up a great launchpad for other the buyers are 55 and over, partly be- savings.” markets, as the silver wave becomes a tid- cause that age group has the resources al force sweeping across Europe. necessary to afford a bike for EUR 1,500 Demographic change will inevitably in- to 2,000,” says Stephan Schreyer, spokes- fluence product design in countless man for the Germany Bicycle Industry areas. The quality of the development of Federation. Sales are set to keep on ris- products and services for older people is WANT TO KNOW MORE? ing. The share of e-bikes, currently at likely to be boosted by the increasing around 10 percent of the four million bi- presence of “silver workers” – also known cycles sold in Germany per year, is likely as Very Experienced Persons (VEPs) – on Melanie Wiegand is to reach up to 17 percent in the next five corporate management boards. Execu- brand strategist for years or so, the association estimates. tives aged over 50 are back in demand, the development and The silver economy is crucial for and companies are starting to regret marketing of products carmakers as well. The average age of car their rush in previous years to nudge and services for the buyers reached a record high of 52 in skilled employees into early retirement. 50-plus age group. 2012, according to a study by the Univer- They’re needed for their know-how and Throughout her sity of Duisburg-Essen. That’s six years their calm seen-it-all-before attitude. professional experience, she has held older than in 1995. Almost a third of They also have got nothing left to prove: various senior marketing management buyers of new cars were over 60, while ego and ambition, which can be destruc- positions and successfully developed just 7 percent were younger than 30. tive forces in the workings of the corpo- products for the 50-plus age group. “Demographic change is being reflected rate world, are less pronounced in older in the new-car market,” says Professor workers. Melanie Wiegand is Germany Trade & Ferdinand Dudenhöffer, head of the uni- “New brooms sweep well. But the Invest’s leading expert in the field of versity’s Center Automotive Research. old ones know where the dirt lies,” says demographic change. She identifies Alfred Odendahl, 66, the head of Bosch innovative business fields and future Greying car buyers are likely to wel- Management Support GmbH, a consul- markets for Germany. come the trend toward self-driving fea- tancy that hires out retired employees tures in cars, which most of the big au- from the Bosch engineering company tomakers are working on. Having your for projects around the world. With ever > MORE INFORMATION car drive you automatically, and then more pensioners working, their dispos- park itself when you arrive, could be a able income will continue to grow. [email protected]

2/2014 markets Germany 9 location ON A HEALTH TRIP “Med in Germany.” Most tourists heading for Germany want to see the Branden- burg Gate, experience Oktoberfest, or wander in the Black Forest. But did you know that Germany’s health-care system also attracts hundreds of thousands each year?

he Romans were some of the first to The volume of medical revenues from hotels. The country also offers excellent experience medical tourism when treating foreign patients in 2011 and affordable shopping.” T they savored the hot springs at amounted to EUR 1 billion. That doesn’t Juszczak says revenues from for- Baden-Baden up to two thousand years include revenues generated by Germa- eign patients have been growing at a rate ago. Following in their sandaled foot- ny’s burgeoning wellness and health of 7 to 9 percent in recent years and ex- steps today, some 200,000 foreign pa- spa sector. The country has more than pects that growth to continue. “There tients visit the country’s hospitals each 350 health resorts and spas that employ has been really big growth in the num- year and benefit from the “Med in Ger- some 350,000 people and generate ber of patients from Russia. In 2004, many” tradition, particularly when it around EUR 30 billion in sales per year. some one thousand inpatients were comes to being treated for serious and heading west. By 2011, the number had complicated diseases. “Germany is attractive because it has increased to six thousand.” Contrary to The sector is expanding rapidly be- such a high-quality medical system; we common belief, the patients aren’t all cause in many countries, health services have a huge number of very good hospi- well-heeled oligarchs and sheikhs, ei- are failing to provide adequate treat- tals, university clinics, and specialist ther. Many, says Juszczak, are ordinary ment for scores of ailments. A large pro- clinics with the latest medical equip- people who have obtained funding for portion of patients visiting Germany ment and therapies,” says Jens Juszczak, essential treatment from their health come from Russia and other countries an economist specializing in medical services, embassies, or governments. of the former Soviet Union, as well as tourism at the Bonn-Rhein-Sieg Universi- Despite its growth and reputation, from Arab countries. In 2011, 83,000 ty of Applied Sciences. “We are centrally Germany occupies middle ground in people came to Germany for inpatient located; cities are close to each other and terms of foreign patient numbers among treatment, and a further 123,000 came have good airport connections. Further- the more than forty countries that at- for outpatient treatment, according to more, there’s a huge range on offer in tract medical tourism. That being said, the Federal Statistical Office of Germany. terms of tourist attractions and upmarket while the United States, Southeast Asian countries, India, South Korea, Jordan, and Israel may have more patients, they often have a different emphasis: “In Ger- many you’ll get patients with serious, complex diseases, whereas in the Philip- pines it tends to be plastic surgery and liposuction, and in Turkey you’ll get la- ser vision correction,” says Juszczak.

Having come a long way since Roman times, today’s “Med in Germany” has built on the tradition of rest, relaxation, and regeneration and now offers the full spectrum. Regional authorities in Ger- many are marketing their outstanding medical services with support schemes that bring together a host of related businesses ranging from hotels to airlines, travel agencies, and chauffeur companies. Alongside excellent medical care, “Med in Germany” offers visitors the only sickness that won’t send them back to the hospital: the travel bug.

> CONTACT Many foreign patients travel a long way to experience the high standard of German health

care, particularly when it comes to remedying serious conditions. [email protected] Klar (p10); Jenny Horne/Getty Images/E+ (M) (p11) Reto Photos:

10 markets Germany 2/2014 location BYE-BYE

Immigration. Laborious paperwork and tedious applications have become a thing of the past as new measures and reforms make it quick and easy for highly qualiﬁed professionals to apply for visas, enter the country, and build a future.

et us tell you a well-known secret: simplifying the procedure for recognizing online portal was developed. The website Germany is the most attractive loca- foreign vocational qualifications, Germa- provides information about possible jobs, Ltion for investment in Europe. This ny now has one of the least bureaucratic legal issues, and life in Germany, all free conclusion was arrived at in the study and most efficient immigration systems of charge. Additionally, the brief guide “Standort Deutschland 2013” (“Germany in the world. In its recently published “Working in Germany” is freely available; as a Business Location 2013”), conducted study “Zuwanderung ausländischer Ar- it contains all of the important informa- by audit firm Ernst & Young. In addition beitskräfte: Deutschland” (“Immigration of tion that non-EU professionals might to first-rate infrastructure, international Foreign Labor: Germany”), the Organisa- require. investors were particularly impressed tion for Economic Co-operation and Devel- In India, Indonesia, and Vietnam, with Germany’s excellent education sys- opment (OECD) complimented Germany’s “Make it in Germany” consultants already tem, which serves as the foundation for highly transparent application system for offer comprehensive, personalized con- training its highly qualified workforce. immigration. Compared to other coun- sulting services that start with the job Yet demographic change means tries, the processing time for immigration search and end with the integration that there is no guarantee that the coun- of the employee and his or her family try will be able to continue providing a into German society. Moreover, a number sufficient pool of qualified professionals of community-level organizations offer in the future. As a center for high technol- A highly trans- career-oriented language and integration ogy, Germany’s innovative strength de- courses to help ease the transition. pends strongly on ensuring that it has parent system The “Make it in Germany” portal is enough skilled employees to offer compa- part of the “Qualified Professionals Initia- nies. For this reason, the German govern- for immigration. tive.” Among other things, the initiative ment has cooperated with trade associa- highlights the manifold options for at- tions and companies to implement an tracting skilled employees from abroad – extensive package of measures. applications in Germany is short, especial- particularly to small and medium-sized ly for those with desirable professions companies. It also presents suggestions One such example is the Konzept Fach- such as health-care workers and engineers. for creating a welcoming, immigration- kräftesicherung (Concept for Securing Processing an application takes just 30 to friendly culture within a company as part Skilled Employees), which aims to facili- 35 days according to the OECD. Moreover, of the integration process for foreign em- tate access to the German labor market the Federal Republic does not set a limit ployees, so that employers can ensure that for qualified foreign workers. Further- on the number of highly qualified immi- their business, and subsequently the Ger- more, the introduction of the EU Blue grants allowed into the country each year. man working world, remains young, in- Card as part of the European Union’s di- novative, and well qualified. rective on highly qualified employment is Germany’s overall goal is to establish and also intended to make it easier for highly embody an immigration-friendly culture skilled professionals from non-EU coun- for foreign workers, and to communicate > MORE INFORMATION tries to immigrate to the European Union. this aim to the outside world. Non-EU pro- As a result of reforms that came fessionals should hear about the excellent http://www.make-it-in-germany.com/en/ along with these measures, such as ex- career prospects and quality of life in Ger- > CONTACT tending the job-search period for foreign many and want to build a future here.

Photos: Reto Klar (p10); Jenny Horne/Getty Images/E+ (M) (p11) Reto Photos: graduates of German universities and This is why the “Make it in Germany” [email protected]

2/2014 markets Germany 11 location MEET THE MITTELSTAND SMEs. They make up 99.6 percent of all companies, educate future workers, and contribute signiﬁcantly to the economy and labor market.

ermany’s economy has performed as suppliers, there is a growing need for Regional expertise also plays an impor- well in international rankings for these companies to work together to re- tant role. The renowned medical cluster Gyears. One important factor behind fine their products. To that end, non-uni- in the city of Tuttlingen in Baden-Würt- its success is the German Mittelstand – versity research institutions, universities, temberg arose back in the early nine- Germany’s large contingent of small and and companies work together to improve teenth century as a growing number of medium-sized companies – which, in re- or develop new products and services in knife manufacturers settled in the region cent years, has also become an important the context of cooperative industrial re- and – as the city’s history goes – estab- part of the media’s coverage of business search or as part of numerous specialized lished the first surgical instrument pro- and finance. The German Federal Minis- clusters. This cooperation makes it possi- duction company sometime around 1866. try for Economic Affairs and Energy ble for small companies, in particular, to Today, the cluster comprises approxi- (BMWi, formerly the Federal Ministry of take part in research and development mately four hundred medical technology Economics and Technology) views the without the need to construct their own companies – most of which are SMEs – German Mittelstand as the “backbone of costly research laboratories. that invest a great deal in research and the country’s economy.” However, the success of companies development. in the Mittelstand often goes unnoticed, According to estimates by the Institut für as they tend to operate in profitable Another reason that Germany has so Mittelstandsforschung (Institute for Re- niche markets – frequently for industrial many hidden champions, says Simon, is search on Small and Medium-Sized Enter- goods – rather than try to establish a rec- that companies in Germany focus on in- prises – IfM) in Bonn, 99.6 percent of all ognizable brand in the consumer goods ternational exports at an early stage. companies in Germany fall into the cate- market. That’s why many of them are also Today, more than 40 percent of medium- gory of small and medium-sized enter- known as “hidden champions.” According sized companies in Germany are export- prises (SMEs). With 21 million employees to the calculations of consultant Her- oriented. The more than 150,000 who account for 80 percent of all em- mann Simon, with 1,307 of the world’s companies in the German Mittelstand ployed people in the country, SMEs are more than 2,700 hidden champions, Ger- comprise 97.5 percent of all German ex- also Germany’s largest employer. As part many leads the global hidden champions port companies, making them the largest of the dual-track vocational education ranking by a wide margin. In second place group of exporters. The exporters in the and training system, they educate ap- is the world’s largest economy, the United Mittelstand generated approximately 18 proximately 1.3 million young people States, with just 366 companies. percent of their turnover – or more than each year, which consequently secures Simon attributes the enormous EUR 195 billion – abroad in 2011. the next generation of employees. SMEs number of hidden champions in Germa- also create nearly 55 percent of net added ny to a number of special factors particu- value, making a significant contribution lar to the country: Germany’s excellent to the success of all German companies. dual-track vocational education and train- > CONTACT With SMEs increasingly being inte- ing system, its central location within Eu- grated into large companies’ value chains rope, and its strong industrial foundation. [email protected]

Research expenditures and available personnel at German SMEs

R&D Expenditures in million EUR Research staff

88,366 +86% 79,905 76,017 9,491 8,263 8,683 61,780 There was an 50,581 86 percent increase 6,559 in R&D expendi- 5,098 tures at companies with 500 employees or less between 2004 and 2011.

2004 2006 2008 2010 2011

Source: Stifterverband, 2013. Photos: Energiequelle GmbH; Langrock/Zenit/laif (p13) GmbH; Langrock/Zenit/laif Energiequelle Photos:

12 markets Germany 2/2014 location

The small village of Feldheim, southwest of Berlin, is Germany’s first energy-self-sufficient village. ENERGY AUTARKY Energiewende. It looks idyllic, and it is. This countryside community has taken energy self-sufficiency to the next level and is now pioneering new technology.

eldheim, a tiny German hamlet with as well as wind and solar farms. Visitors (formerly the Federal Ministry of Econom- around 130 residents, is in the van- range from local school groups to munici- ics and Technology) “go cluster” initiative Fguard of the Energiewende, Germa- pal, government, and industry represent- in 2012, Hessen-based deENet is taking ny’s effort to shift to a sustainable ener- atives. The technology mixes which com- self-sufficiency to a regional level, work- gy system. In 2010, the community munities use to achieve energy independ- ing with larger towns, such as Bebra and southwest of Berlin was declared Germa- ence are as diverse as the number of Alheim, to see them become energy-inde- ny’s first energy-self-sufficient village. programs to support the shift to pendent by 2030. Feldheim residents emit less carbon di- renewables. Villages can receive backing oxide and pay less per kilowatt-hour for from state governments or organiza- Back in Feldheim, they are still pioneer- energy than before. tions such as the Specialist Agency for ing. The community is now working with Working in cooperation with Ener- Energiequelle GmbH to set up a EUR 14 giequelle GmbH of Kallinchen, Feldheim million, 10-megawatt battery – likely to be set up its own utility company and power Europe’s largest – in the village. grid. Now the village is expanding its tech- Werner Frohwitter of Energiequelle nology mix from wind, solar, wood, and GmbH says, “The battery has two purpos- biogas to include energy storage. es: to provide balancing energy if there is over-frequency on the medium voltage op- The idea has caught on. Germany’s Fed- erator’s grid and to store the energy gener- eral Ministry of Food and Agriculture ated by the wind turbines. Wind fluctu- (BMELV) currently counts Glonn, Düng- ates. We will use what is stored when strup, and Theuma among the 137 villag- there is too little wind. Initially, we want- es meeting their own energy needs. Ener- ed to buy a 400-kilowatt battery, but it was gy-self-sufficient villages and those ap- too expensive, so we’ve chosen the larger proaching autarky, like Mitwitz, Zepkow, one. We expect to install it this fall.” and Quickborn, are spreading across the Energy self-sufficiency comes in many forms Meanwhile, for more municipali- country. A map shows at least one is lo- and makes full use of available technologies. ties interested in following in Feld- cated in twelve of Germany’s sixteen fed- heim’s footsteps, deNEet is holding the eral states. Renewable Resources (FNR). Established Fourth Congress of Energy-Self-Suffi- Interest in the development has in 1993, FNR provides guidance under cient Communities from April 2 to 4, spread abroad. Feldheim offers tours of the auspices of the BMELV’s renewables 2014, in Freiburg. its facilities through the New Energy program. Forum – Feldheim (NEFF). It says people Another organization, deENet, is an come from all over the world – places as industry, business, and research initiative > CONTACT far away as Brazil and South Africa – to see that was set up in 2003. Included in the

Photos: Energiequelle GmbH; Langrock/Zenit/laif (p13) GmbH; Langrock/Zenit/laif Energiequelle Photos: the woodchip heating and biogas plants German Ministry for Economic Affairs’ [email protected]

2/2014 markets Germany 13 business DIGITAL AD-VENTURES Online Marketing. The advertising world is mass-migrating to the virtual sphere, and as more and more funds ﬂow in this direction, promising opportunities are arising for foreign companies and investors.

ermany’s digital economy is booming will have been broken in 2013, with in- affiliate networks (in which businesses and becoming a major force in the vestment in online advertising increas- pay affiliates to attract visitors or cus- Gcountry’s overall economy. In 2011, ing by 12 percent to reach EUR 7.23 bil- tomers to their websites, such as Ama- turnover generated with or by means of lion. In fact, the combined figure could zon Associate) will climb by 7 percent to the Internet surpassed EUR 75 billion. even jump to close to EUR 10 billion total EUR 440 million in revenue Furthermore, with 63 million residents, by 2016, according to a re- (6.1 percent). Together, or over two thirds of its population, regu- cent study by the Associa- this represents a EUR larly online, Germany boasts the most tion of the German Inter- 1.49 billion increase in Internet users in Europe and is a crucial net Industry (eco) and The digital the volume of Germany’s market for the global digital economy. the business consultancy digital advertising mar- Arthur D. Little. advertising ket since 2011. This pro- To adapt to consumers’ increasing use of Of course, classic gressive digitalization of digital media, the advertising industry in online advertising, such market is ad communications is a Germany is sharpening its focus on the as web banners, pop-ups, trend that can be seen Internet. In the first half of 2013, gross in- and text ads, continues to far from with advertisers from vestments in conventional online adver- make up the biggest slice every branch of industry, tising continued their steep climb. Ac- of the total advertising saturated. the OVK notes, and repre- cording to the Circle of Online Marketers pie (58.5 percent), with sents a “paradigm shift (OVK), an association of the nineteen larg- the OVK predicting that in the media landscape.” est online marketers in Germany under it will have grown 12 percent in 2013 to the umbrella of the German Association reach EUR 4.23 billion in sales. Nonethe- As more advertising funds flow toward of the Digital Economy (BVDW), the Inter- less, the surge in growth is also being the Internet, spending in other media net’s share of total advertising spending driven by less traditional means of on- genres such as television is stagnating will have grown to 23.5 percent in 2013, line advertising. The OVK forecasts that or declining. The increasing dominance up from 21.8 percent in 2012, and thereby search-engine marketing, aimed at in- of online marketing is driven by its myr- remain the second-strongest medium in creasing a website’s visibility, will also iad advantages: interactive dialogue Germany’s media mix. The OVK also pre- increase by 12 percent to generate EUR with target groups, improved media dicts that the barrier of 7 billion euros 2.56 billion in sales (35.4 percent), while continuity, superior campaign targeting,

Online marketing revenues by segment in EUR million

Classic online advertising Search word marketing Affiliate networks

7,226 6,470 5,736

3,775 4,228 3,286

2,076 2,284 2,558

374 411 440

OVK statistics 2011 OVK statistics 2012 OVK forecast 2013

Source: OVK Online Report 2013/02 Photo‚: Dmexco Köln (p15) Dmexco Photo‚:

14 markets Germany 2/2014 business

The Digital Marketing Exposition & Conference is Europe’s top industry event and attracts many thousands each year.

acknowledges that Germany “still has some catching up to do.” However, as businesses and investors know, behind every need lies opportunity – and conditions in Germany for those wishing to capitalize on this opportunity are excellent.

For one, the digital advertising market in Germany is far from saturated and in need of companies and investors eager to bring the country up to speed with the front-runners and then help it keep pace in this dynamically evolving mar- more precise tracking tools, and the ket. Furthermore, the fact that this ability to launch and hone campaigns Digital market – like Germany’s economic land- more quickly. 23.5% advertising scape as a whole – is populated by small Speaking of speed and efficiency, will have made up 23.5 and medium-sized companies rather particularly explosive growth can be than dominated by big firms means that seen in real-time advertising conducted percent of total advertis- there are fewer barriers to entry and via real-time bidding (RTB), which sees ing spending in 2013. more opportunities for companies offer- companies bidding for impressions on ing innovative products, services, or busi- websites. Once bought, the buyer’s ad- ness models to secure a foothold in the vert is immediately shown. According to market. an International Data Corporation (IDC) Germany also hosts a number of the study released in September, German industry’s leading events, where estab- RTB spending rose 82 percent between lished players and newcomers can get a 2012 and 2013, from EUR 63.8 million to feel for the market and business environ- EUR 116.5 million, and from 7 percent to ment. For example, the Digital Market- 12 percent of total display ad sales. The ing Exposition & Conference (dmexco), IDC predicts that this figure will sky- held each September in Cologne, has rocket to almost EUR 469 million by emerged as Europe’s premier industry 2017 to claim 28 percent of the spending Investment event. In 2013, it broke three records, at- figures. in mobile tracting 742 exhibitors from 26 coun- 75.6% tries as well as over 26,000 trade visitors. What’s more, this investment trend can display ad spending grew This year, the dmexco will take place be seen in mobile display advertising on 75.6 percent from January from September 10 to 11. mobile devices. According to the Mobile Advertising unit (MAC) within the to June 2013. BVDW, between January and June 2013, > CONTACT gross investment in mobile display ads as well as mobile and tablet apps saw a [email protected] year-on-year climb of 75.6 percent to reach EUR 44.5 million. For 2013 as a whole, MAC forecasts EUR 105.1 million > MORE INFORMATION in gross revenue, or EUR 43.3 million more than in all of 2012. Definitive re- “Germany’s Digital Economy: Opportu- sults are expected in early summer. nities for International Investors” fact Despite the growing strength of sheet: bit.ly/1k6RRpu online advertising and public receptive- German real- ness to it, the Federal Ministry for Eco- time bidding On Germany’s digital economy in gen- nomic Affairs and Energy (BMWi; for- 82% eral, please see our markets Germany merly Federal Ministry of Economics spending rose 82 percent issue 1/2013:

Photo‚: Dmexco Köln (p15) Dmexco Photo‚: and Technology) 2012 monitoring report from 2012 to 2013. bit.ly/1hvr31I

2/2014 markets Germany 15 industry

A wide range of investment possibilities is available to foreign investors in the CFRP sector in Germany. HIGH IN FIBER, LOW IN WEIGHT Composites. Carbon-ﬁber-reinforced plastic is like a dieter’s dream: It packs a ﬁbrous punch without any of the weighty, undesired baggage. So much so in fact, that it is expected to take over the plastics world in no time at all.

lobal demand for lightweight com- Germany is likewise Europe’s top loca- organization, Composites Germany, which posite materials is skyrocketing. tion for plastics and the biggest magnet aims to pool know-how and resources G This is due in large part to trends in for related FDI. Companies and research to bolster their combined innovative reducing carbon dioxide emissions and establishments are determined to be strength (see interview on next page). improving resource efficiency. Thanks to CFRP pioneers along the entire idea- Recognizing the myriad location its weight, versatility, durability, and innovation-implementation chain – from advantages and business opportunities, strength, the rising star among the light- finding the chemical formulations need- foreign companies big and small have weight composites is carbon-fiber-rein- ed to make the strongest materials and been setting up CFRP-related businesses forced plastic (CFRP). Indeed, a 2012 designing state-of-the-art manufacturing in Germany, investing in German compa- McKinsey study found that CFRP will enjoy automation to integrating them into the nies, and entering into collaborative ef- the highest growth rate of all lightweight products of the future. forts with German firms and research materials over the next two decades, as its This future-oriented drive bene- institutions. costs drop by up to two thirds. Another re- fits from Germany’s unparalleled R&D port estimates that demand for CFRP will landscape and tradition of close coopera- This BMW is just one more than triple between 2012 and 2020, tion among companies as well as be- example of how CFRP from 65,000 to 208,000 metric tons. tween science and industry. In May 2013, is used in vehicle What’s more, the field of applica- for example, the German Aerospace Cen-Cen production. tion for CFRP is virtually unlimited and ter (DLR) celebrated the opening of its can range from making lighter prosthe- Augsburg branch of the Center for Light-Light- ses and faster canoes to constructing weight Production Technology (ZLP), more durable rebars. At the moment, its where it now works with other partners advantages are currently being exploit- to develop flexible production processes ed primarily in the automotive, aero- for CFRP using automated robotic sys-sys- space, and wind energy sectors – three tems. Two months later, Germany’s four areas in which Germany has positioned leading clusters in the CFRP industry

itself as a global leader. teamed up to found an umbrella trade (p17) (p16); AVK Huber/laif; BMW AG Hans-Bernhard Photos:

16 markets Germany 2/2014 industry

A FIBROUS ADVANTAGE Interview: Excellent business opportunities in carbon-ﬁber-reinforced plastic (CFRP) await investors in Germany, says Dr. Elmar Witten.

What are the current trends in the CFRP sector in Germany? Dr. Elmar Witten: Manufacturing CFRP components is among the key technologies in Germany, and products ﬁnd application in cutting-edge ﬁelds, such as electromobility, wind energy, and new infrastructure projects.

How competitive is Germany’s CFRP research, production, and investment? Witten: Germany holds a leading glob- Dr. Elmar Witten al position in several key application In 2007, the US-based company Hexcel fields, such as the automotive, aero- opened a plant in Stade, Lower Saxony, space, and machine-building sectors. Dr. Elmar Witten is spokesman for to be close to the Hamburg-based opera- Currently, resource efficiency, Germa- Composites Germany, founded in tions of Airbus, a major customer of its ny’s energy revolution, and the relat- July 2013. Composites Germany carbon-fiber-preimpregnated fibers (pre- ed investments are driving R&D. promotes innovation, technology, preg). In 2012, with the assistance of and the development of standards. Germany Trade & Invest, the supply What does the future hold? As Europe’s largest composites chain became even more concentrated Witten: There is great potential for network, it helps foreign inves- and efficient when Web Industries, an- Germany in automating and linking tors make contact with key players other US firm, opened a facility at the high-volume production processes. We along the entire CFRP value chain. same location to convert Hexcel’s pre- already have a leading role thanks to preg into composite slit tape for use in our innovative power and automation aerospace components. know-how. Witten: Our most recent survey found that the investment climate continues Toray Industries represents an example Where are the largest investments to develop positively: companies plan to of both successful investment and collab- being made? boost employee numbers as well as in- oration. In 2008, the Japanese carbon-fi- Witten: At the moment, the biggest investments in processing equipment. ber giant purchased a 21 percent stake in vestments are primarily going into re- Germany is also expected to be a major ACE Advanced Composite Engineering search related to manufacturing and driver within the European composites GmbH, a specialist in molding, forming, integrating the individual steps of pro- sector, with CFRP stimulating the most and machining CFRP automotive parts, duction. growth on the material side. based in Immenstaad, Baden-Württem- berg. Three years later, it launched a What role can small and medium- Where are the most promising oppor- joint venture, Euro Advanced Carbon Fi- sized companies (SMEs) play in devel- tunities for foreign companies? ber Composites GmbH, with the German oping and integrating CFRP? Witten: Because carbon fibers are automaker Daimler in nearby Esslingen, Witten: In many cases, CFRP is still be- mainly produced abroad, the best op- to design, manufacture, and market ing used in special segments and in portunities in Germany are found in CFRP automotive parts. The company is limited quantities. So, given their spe- the downstream stages of the supply therefore making the most of investment cialization, SMEs can play an enormous chain, such as in product improve- opportunities in Germany’s innovative role in driving innovation. Further- ment, product innovation, and coming CFRP landscape. more, thanks to their structure, SMEs up with new applications (R&D and can often respond to changing require- joint projects). ments and general conditions better than large companies.

> CONTACT > MORE INFORMATION What is the German CFRP investment [email protected] climate like? www.composites-germany.org

Photos: Hans-Bernhard Huber/laif; BMW AG (p16); AVK (p17) (p16); AVK Huber/laif; BMW AG Hans-Bernhard Photos: [email protected]

2/2014 markets Germany 17 T industry Germany ntaie Nn i Germany.” in “Nano initiative the and Nanotechnology of Association German the nanotechnology: promote to founded were networks national ed, interconnect- two years, few past the In ehooy eesr fr n aging an society.Mobility, for com- and information, necessary technology medical the in mention to not – juries in- heal and disease prevent and treat, detect,to used methods and equipment the in examplefor important, be tainly cer will medicine and health in nology has it position achieved. leading the taining main- to committed is and areas these in deal great a invested has Germany materialsnewenergy.for of wind ment develop- the and systems, photovoltaic buildings, energy-efﬁcient materials, insulation new (LEDs), light- diodes emitting nanotechnology, without sible impos- be will This transportation. and storage, generation, its of the ﬁeld in broad problems many solve to need still but energy, renewable on rely We not just be use in of the nuclear energy. ize that the future of energy supply can- real- all us made has Fukushima in ter Dr. Ralph Nonninger: is now quite substantial. spectrum practical established its an technology; becoming to way the needs. I would say nanotechnology is on differing with sectors various in takes that technology interface an is it cause gy. Applications are very broad-based be- fornanotechnoloconcreteapplications - in recent years, and there are now many Prof. Andreas Leson: of theGermannanotechnology scene: We began by asking them for a snapshot Association ofNanotechnology. German the and initiative Germany” in “Nano the of Nonninger Ralph Dr. and 18 and developedsuccess are decreasing inother economies. sign ofhigh-quality presence andleadinginnovation intimeswhen industry Interview. nanotechnology global trend: ItisstillGerman a isbuckingthe INY TE INY Additionally, the use of nanotech- of use Additionally,the pk t Po. nra Leson Andreas Prof. to spoke Much has changed The nuclear disas- C markets markets HNOLO - n avnae ht emn hs over has Germany that advantage one ry out applied research. That is certainly Institutes, car which Gesellschaft, Leibniz the and Planck Max the sellschaft, Ge- Fraunhofer the as such lishments estab- research non-university among as well as universities our in structure research excellent an There’s strengths. Prof.Leson: player? makes ita global nanotechnology Germany offer inthisarea? What What advantages and strengths does spearhead. its is nanotechnology and industrialrevolution, new a experiencing are we look, you wherever – on so and teries, bat- lithium-ion cells, fuel cars, Electric further examples of the way society is changing. are technologies munication Beam Technology IWS inDresden. Fraunhofer Institute for Material and Germany“ andVice Director ofthe person oftheinitiative “Nanoin Prof. Andreas Lesonisheadspokes- Prof. Andreas Leson Germany has a number of number a has Germany G Y, Y, BIG -

further internal industry discussion. internal industry further to also but public the to across topic the whole, a onlytowenot getwhich needed felt was as Germany in scene nology nanotech- entire the for spoke that tion organiza- one no but field, the in tions associa- and networks of lot werea there tember 2012. Our founding members felt Sep- in established initiative, new tively Prof. Leson: our interests. nology is not only successful, but also in nanotech- on dependent is that lution revoindustrial- the that ensures mately ulti- and research, defines people, cates edu- projects, joint pursues politicians, and scientists, businesspeople, decision- makers, connects that club, rotary a aim is to create an elite circle, similar to important most our However, funding. and risks, uses, its nanotechnology, on advise that authorities and ministries the of committees the in voice a SMEs and individuals give and gaps existing bridge to want We We goals. field. big two have nanotechnology the in ing a home and a voice to the people operat- of giveto established Nanotechnologywas Association German The trust. ate cre- they assets; greatest our are pertise Nonninger: Dr. What are your aims? products are beingdeveloped. what and are there prospects and tions applica- what show to lengths great to going public, general broader the with nanotechnology about dialogue a velop de- tohavewe tried always that is factor key Another nations. other from apart us sets also That applications. different many with ahead pushing is that sector enter prises (SMEs). Germany has a strong SME medium-sized and small our of advantage is the strength and dynamism developed important Another and nations. industrial players global other IDEAS “Nano in Germany” is a rela- needne n ex- and Independence markets Germany markets

2/2014 -

Photos: Privat; DV Nano e.V.; Magnilion/iStockphoto (M) industry

Who are your members and how are Prof. Leson: In addition to informing in Tokyo with several hundred exhibi- you structured? the public and providing a platform for tors and 50,000 to 60,000 visitors. “Nano discussion and the exchange of ideas in Germany” was there to demonstrate Prof. Leson: We currently have around and information between our members, Germany’s strength in nanotechnology 110 members in three fields: a lot of we also consciously set out to address and present various developments and SMEs, various research institutes, and the issue of location marketing. At trade products. We’re also looking into activi- several regional networks. However, the fairs, especially abroad, we have taken a ties in the United States and have had in- main body is made up of small and me- number of concrete steps, setting up quiries from South Korea. dium-sized companies, which gain joint stands under the umbrella of the many advantages from this platform. initiative to provide small companies Dr. Nonninger: The German Association with a platform where they can be no- of Nanotechnology does have members Dr. Nonninger: The German Association ticed more easily than if they were stuck outside Germany, and the number is of Nanotechnology is an association of manning a small stand at the back. steadily increasing. Our aim of building individuals – people for people, similar a European Nano-alliance means that to the Association of German Engineers we are interested in foreign partners (VDI). Universities, research institutions, and members. Initially, these will be- networks, and SMEs are also welcome to come our centers of excellence in the re- join the association and support our spective regions, which we can use to work as contributing members. We aim reach others. to create a network of four to five thousand members spanning the whole of How are you working with GTAI? Do Europe. In the first step toward achiev- you have specific plans or intentions? ing this goal, we have incorporated the most important people and companies Dr. Nonninger: Our cooperation with in the sector into the network, and all GTAI started about a year and a half ago, relevant nanotechnology networks and because we have similar goals. They sup- centers in Germany into the association port us in finding appropriate partners as regional branches (a total of fourteen in Europe, and we in turn try to help by so far). At the same time, the first points providing expertise from the scene. In of contact are being set up in Dublin, 2013, we went on a “discovery tour” to- Ireland, and Madrid, Spain. We are cur- Dr. Ralph Nonninger gether through the Czech Republic in rently using these networks to approach order to identify suitable partners for

the people who are important to us and Germany. I hope that this will remain a Dr. Ralph Nonninger is President involve them in the association. part of our cooperation. of the German Association of Nanotechnology and Managing What are your international aims? Are Prof. Leson: Director of cc-NanoBioNet in We’ve already done quite a your organizations working together Saarbrücken. lot with GTAI – for example workshops, on them? including in Japan, where we organized a special one that also considered the Dr. Nonninger: As mentioned, we want topic of location marketing. That’s one to build up a European Association for of GTAI’s specialties, so we complement Nanotechnology that, in accordance Do you have foreign members or each other well. We would really like to with Germany’s goals, connects people partners? expand this further, not necessarily just working in the nanotechnology sector so focusing on Japan. GTAI has also joined that they can develop projects, ideas, and Prof. Leson: Currently not; as the name the “Nano in Germany” initiative be- our future. We want to be a voice that is “Nano in Germany” implies, our focus is cause we both recognize that, by work- heard in Berlin, and in particular, in on unifying the German market. But al- ing together, we can do a lot to promote Brussels. The German Association of Nan- though we’re not actively pursuing for- Germany as a location. otechnology is a founding member of the eign members right now, we are happy Nano in Germany initiative, and I was to talk to partners abroad and have done their representative spokesman in 2013; so to a great extent. The initiative has a we want to create a structure and a brand high proﬁle, and we have had many in- > MORE INFORMATION that is recognized as a point of contact terested parties approach us. One coun- abroad for those wanting to cooperate try we are focusing on is Japan: at the www.nanoingermany.com with Germany. end of January there was a big trade fair www.dv-nano.de ; Magnilion/iStockphoto (M) ; Magnilion/iStockphoto Nano e.V. DV Privat; Photos:

2/2014 markets Germany 19 industry

Tesla aims to install forty to ﬁfty charging stations around Germany by the end of 2015, making it even easier for customers to enjoy its Model S electric car. CHARGING DOWN THE AUTOBAHN E-mobility. California-based Tesla Motors has brought the Model S to Europe and is aiming to see it driven around Germany’s high-speed autobahns by automobile enthusiasts, speed demons, and the ecologically minded alike.

or Tesla Motors, one of the world’s technology and is therefore extremely im- the number of service centers through- most dynamic automakers, Germany portant to us. It is a decisive step for Tesla out Germany by the end of the year. In F has become the main focus of its inter- that the market introduction of the Mod- the long term, Musk sees Germany as the national expansion. Established in Palo el S in Germany has been so well received company’s third-largest market behind Alto, California, in 2003 and led by bil- by customers.” the United States and China as well as lionaire entrepreneur Elon Musk, the the one with the highest per-capita sales. company designs, manufactures, and sells In a customer-oriented move, Tesla will Tesla’s link to Germany is not only electric cars and electric vehicle power- offer a free high-speed performance up- based on car sales. The company devel- train components. In fact, it is so sought- grade for the Model S to all customers in oped the drivetrain for the Mercedes- after that its shares were the fastest-grow- Germany, so that they can benefit from Benz B-Class Electric Drive, which will be ing auto stock in the world last year. all that the car has to offer on the coun- launched in 2014. The batteries for the The electric car manufacturer first try’s high-performance roads. second-generation Smart Fortwo electric enjoyed success with its popular but pric- The company’s first major invest- drive, the best-selling electric car in Ger- ey Roadster. Then came the Tesla Model S, ment in Germany will be in the installa- many, are also from Tesla. a full-sized electric five-door hatchback tion of its Supercharger stations country- Furthermore, German automaker first shown to the pub- wide. Initial construc- Daimler acquired a 10 percent stake in lic at the 2009 Frank- tion began in November the group for USD 50 million in 2009. Al- furt Motor Show. It 2013, with fast-charging though Daimler has since reduced its went on sale in the Tesla expects stations planned on au- holding to 4 percent, the company said United States in June tobahn routes between in December 2013 that it would contin- 2012 and then in Eu- to sell some Munich and Stuttgart, ue to work with Tesla on new and exist- rope in August 2013. Munich and Zurich, and ing projects, adding that the companies Now that the car 10,000 cars a Cologne and Frankfurt. now intend to broaden and deepen their is being rolled out inter- year. Tesla plans to rapidly ex- partnership. nationally, Germany pand the network with “We made the right decision by has become a key mar- between forty and fifty acquiring a stake in Tesla at an early ket and “top focus” for Supercharger stations stage,” said Bodo Uebber, member of the manufacturer, says CEO Musk – who planned throughout Germany by the end Daimler’s management board in charge is also founder and CEO of space trans- of 2015. Tesla has already set up a similar of Finance and Controlling, Mergers and port company SpaceX and chairman and network in the United States. Acquisitions, and the Daimler Financial major shareholder of solar energy firm From the end of 2014 on, Tesla ex- Services division, adding, “Tesla’s inno- SolarCity. Visiting the country in October, pects to sell some ten thousand cars a vation, which is helping to drive the ris- Musk said, “Tesla is investing a lot of year, Musk told German newspaper Welt ing demand for electric vehicles, proves money in Germany,” adding that it is “a am Sonntag. In addition, the company is that we are cooperating with the right

country that appreciates automotive looking to open 25 ofﬁces and expand partner.” (p20); NASA (M) (p21) Liﬂand/Polaris/laif Brandi Kim suk bj/Imaginechina/laif; Jessica Photos:

20 markets Germany 2/2014 industry THE NEW BUZZ Standardization. Smart cities of the future will need international technical and managerial standards. The newly founded multinational Systems Evaluation Group (SEG) has taken on the difﬁcult task.

ities worldwide are growing at an un- Buzzwords, however, can have a positive that are going to be incorporated into fu- precedented rate and will most likely effect on technological, environmental, ture cities in particular. Ccontinue to do so. More than half of political, and societal developments. In The group’s inaugural meeting took the world’s population lives in or near cit- this case, this is certainly true for many place at DIN (Germany) in December 2013 ies. For years, organizations like the Or- Asian countries. with many countries’ representatives ganisation for Economic Co-operation from industry and research participating and Development (OECD) and the World In an effort to establish technical and and discussing the many different facets Health Organization (WHO) have been managerial standards in the realm of of city development, and the individual pointing out potential problems associat- (smart) city development, companies in Ja- approaches of cities across Europe, the ed with urban growth and the demo- pan and city developers in China reached Americas, Asia, and Africa. The group’s graphic changes that are especially preva- out to the German Institute for Standardi- work, however, has only just begun, with lent in industrial countries. zation (DIN). Together the parties formed future meetings planned in September The challenges of maintaining or a new Systems Evaluation Group (SEG) 2014 in New York, among others. increasing the quality of life in large met- that reports to the International Electro- DIN welcomes active participation ropolitan areas become apparent when technical Commission (IEC). Based in Ge- from all interested parties in both topi- considering the rising demand in energy, neva, Switzerland, IEC is one of the oldest cal discussion and the work they have clean water, and transportation chan- international standardization organiza- ahead of them. nels, all of which need to be addressed in tions, helping to develop and establish in- sustainable ways in order to accommo- dustry standards since 1906. date future generations. Too often, these The goal of IEC/SEG is the systematic > CONTACT challenges are summarized under the evaluation of the smart city phenomenon nondescript buzzword Smart Cities. in general, and the various technologies [email protected]

AN INSTITUTION

Founded in 1917, DIN (German Insti- tute for Stan- dardization) is one of the most established and internationally active standardization organizations. DIN organizes and steers activities in a transparent manner for the beneﬁt of society, industry, and research. The results of DIN’s work serve to advance innovation, safety, and communication, and to support quality assurance, rationaliza- Urban areas tion, and consumer protection. in 1990 Some 30,000 experts contribute their knowledge to the process. DIN Growth is the ofﬁcial national standards 1990–2000 body representing German interests internationally. Watching cities grow: How Chengdu in the Sechuan Province of China grew from 1990

Photos: Kim suk bj/Imaginechina/laif; Jessica Brandi Liﬂand/Polaris/laif (p20); NASA (M) (p21) Liﬂand/Polaris/laif Brandi Kim suk bj/Imaginechina/laif; Jessica Photos: to 2000. Most urban growth centered around roads and highways.

2/2014 markets Germany 21 success THE NEED FOR SPEED R&D. Chinese telecommunications giant Huawei is extremely pleased that it chose Germany for the headquarters of its European research institutes.

e make the highest-speed fiber-optic the R&D that Huawei conducts in coop- have a strong work ethic. These top re- cable in the world, and the technol- eration with various universities and researchers come to Huawei because they Wogy behind high-speed light trans- search institutions. For example, the Chi- want to achieve something meaningful, mission was developed at our European nese company has signed contracts with and we can give them the platform to do research sites,” Jin Yangbao proudly states the renowned Fraunhofer Institutes in that,” says Jin, explaining the secret of in an interview with markets Germany. Germany in order to conduct joint re- the research center’s success. Jin, an engineer, is the head of Huawei’s search and develop products and cut- European research institute and has been ting-edge technology for Huawei’s pro- Germany’s expenditures for non-universi- working at the company for 16 years. Un- duction lines. The second is a fund set up ty research and development facilities der his leadership, the institute also devel- by the company, christened the Huawei amounted to EUR 8.1 billion in 2011 – oped the world’s most efficient UPS (unin- Innovation Research one of the highest lev- terruptible power supply). Program (HIRP). Univer- els in the world. And sities and research insti- the unique potential of In 2012, Huawei made its Munich re- tutes can apply to re- Every year, it German innovation is search institute the headquarters for its ceive financial support well known in the up- European research activities. It oversees from this fund; the reinvests 10 per echelons of interna- six institutions with more than 400 em- projects that the fund tional companies. In a ployees in five different countries. The supports have long- to 20 percent study conducted by staff of the Munich institute is interna- term objectives and aim Ernst & Young, a quar- tionally diverse: 28 different countries are to develop future-ori- of its turnover ter of all decision-mak- represented in its 150-person research ented products for the ers surveyed rated Ger- and development team. “Bavaria’s attrac- next five to ten years. in R&D. many as the world’s tive, multicultural capital is home to first- most attractive location rate talent. The city provided ideal condi- After serious consider- for R&D, ahead of the tions for our European R&D headquarters ation, Huawei finally chose Germany as United States and Switzerland. A survey to grow into an exceptional platform,” Jin the location for its research headquarters. by the American Chamber of Commerce says with a smile. The country is home to Europe’s largest Germany (AmCham) indicated that Ger- The Chinese company places par- research community – 20 percent of Euro- man R&D institutions are considered “in- ticular emphasis on research and devel- pean researchers live and work here. ternationally first-rate at delivering effi- opment. Every year, it reinvests 10 to “Germany is an ideal location for cient results.” Twenty-nine percent of 20 percent of its turnover in R&D. Hua- R&D. German engineers work very hard those surveyed hoped to expand their wei’s R&D activities can be broken down and are extremely assiduous. They always R&D activities in Germany. into two different categories: The first is have a plan behind their work, and they

The company’s European research headquarters in Munich oversees R&D conducted in the region, a product of which is the world’s fastest ﬁber-optic cable. Photo: Arican/iStockphoto (M) Arican/iStockphoto Photo:

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ECONOMIC OVERVIEW GERMANY: Market, Productivity, Innovation

ECONOMIC OVERVIEW INDUSTRY OVERVIEW POWERHOUSE EASTERN Issue 2013/2014 POWERHOUSE EASTERN GERMANY – FERTILE GROUND FOR YOUR BUSINESS GROWTH IN EUROPE

Since German reuniﬁcation in 1990, Eastern Germany GERMANY GERMANY has attracted high levels of foreign direct investment GDP AND ANNUAL GROWTH RATES IN (FDI). In Eastern Germany, investors beneﬁt from the EASTERN GERMANY buying power of western European markets and short- er roads to new markets in central and eastern Europe. Annual GDP growth (in percent)

Issue 2014 Internationally renowned centers of academic and sci- GDP in nominal terms (in EUR billion) entiﬁc excellence, most advanced logistic networks, 400 competitive productivity costs and short roads to new 25% markets and attractive incentive packages provide the The Medical Technol- 300 20% fertile ground for your business growth in Europe. 15% 200 As six of the sixteen German federal states, the re- 10% gion of Eastern Germany consists of the “new federal states” Brandenburg, Mecklenburg-Vorpommern, Sax- 100 5% ony-Anhalt, Saxony, Thuringia, and the city state capital 0% 0 of Berlin. The region is home to a population of around -5%

16 million people, of which more than three million live 2006 2007 2008 Market, Productivity, ogy Industry in Fertile Ground for 2009 2010 2011 2012 in Berlin alone.

Source: Federal Statistical Office 2013 An industrial “new beginning” was the overarching aim of the fledgling republic’s economic policy after reunification in October 1990. Since then, more than EUR 1.4 German reunification has proved a resounding economic trillion has been spent on the reconstruction of Eastern success. The new federal states have proven particu- Germany. larly resilient in staving off the effects of the worst international financial crisis in recent history, recording Innovation Germany Your Growth in Concerted and forward-looking development policies positive economic and GDP growth in 2012. Foreign involving both public and private partners at national direct investment and public and private partnership and international levels have transformed the eco- have played a defining role in radically transforming the nomic landscape. GDP levels have more than doubled fortunes of the new federal states. in the intervening years. Major investment in road, rail, air, and telecommunications infrastructure has helped set the path for the steady growth being witnessed today. The on-the-ground presence of internationally Order number: 14783 Order number: 13899 Germany renowned universities, technical universities, and research institutes has driven the rapid development of forward-looking industry sectors like biotechnology and renewable energies.

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3/20132/2014 markets Germanygermany 23 about us

The Internet of Things and INDUSTRIE 4.0 will revolution- ize production processes and help Germany achieve its ambitious goals. INTEGRATED INDUSTRY INDUSTRIE 4.0. Google’s billion-dollar acquisition of Nest Labs in California has put the “Internet of Things” ﬁrmly on the map. In Germany, the Internet of Things and INDUSTRIE 4.0 are playing a major role in the country’s ambitious energy plans.

nternet multinational Google’s pur- fourth industrial age, the country’s bring together important actors from chase of the Palo Alto–based home au- INDUSTRIE 4.0 integrated-industry proj- science and industry to outline possible Itomation provider Nest Labs was met ect is being held up as a major driver of integrated-industry scenarios. with headlines proclaiming that the the new energy system, with the future Central among these is the Ener- company was “betting” on the Internet energy system also being intrinsic to the giewende (energy transition) – Germa- of Things (in which physical objects and success of INDUSTRIE 4.0. ny’s shift from fossil fuels to renewable devices are wirelessly connected and energy sources. Part of the country’s “en- identifiable to each other in an Internet- These and other integrated industry– ergy concept,” and the largest single like scenario). The subtext of this deal is related themes were the subject of a spe- project undertaken in Germany since that if Google is investing in it, then it cial podium discussion with high-profile unification in 1990, the Energiewende is must be a surefire thing. representatives from science and industry an energy revolution in everything but While Google’s foray into the In- hosted by Germany Trade & Invest at the name. Greenhouse gas emission levels ternet of Things remains very much a HANNOVER MESSE 2014 at the beginning are to be cut by at least 80 percent by home-based affair, in Germany the In- of April. Coming hot on the heels of the 2050 compared to 1990 levels, at least 80 ternet of Things is taking on industrial recent publication “INDUSTRIE 4.0 – percent of energy generated should dimensions. As well as promising to Smart Manufacturing for the Future,” come from renewable energy sources by

transform industry and usher in the the event saw Germany Trade & Invest 2050, and, last but by no means least, IGD; Deutsche Messe Fraunhofer iProduction: & Co. KG; AG Festo Photos:

24 markets Germany 2/2014 about us

energy provision should also be reliable connected, intelligent manufacturing INDUSTRIE 4.0 and Internet of Things and affordable. through smart factories, products, and technologies will play a central role in To achieve all these goals, the old services. Boundaries between the real and connecting the different parts of the en- centralized energy system will be swapped virtual worlds melt into air as value ergy system, and new value chains and out for a new decentralized system – creat- chains are redrawn in the Internet of market opportunities will be created. To- ing in effect an “Internet of Energy.” Ger- Things. gether, INDUSTRIE 4.0 and the Internet of many’s power grid needs to be rapidly ex- The cost savings realized through Things allow “virtual” power stations to panded, and the grid needs to become not optimized manufacturing – up to 30 per- be set up, providing decentralized reserve only more efficient but cent production effi- capacity and demand-side management “smarter.” This task is ciency savings accord- of renewable energy trading. no minor undertaking: ing to some – will make The next steps in Germany’s billions in investment The Internet a real and lasting contri- INDUSTRIE 4.0 adventure will see the are required to realize bution to Germany’s en- new government further promote the in- the country’s ambitious of Things is ergy efforts, but it is the creased digitalization of classical indus- energy vision. This is actual deployment of try, and the integrated-industry portfolio where the Internet of taking on INDUSTRIE 4.0 technol- extended to “smart services” (which sees Things and INDUSTRIE ogies in the energy sec- companies integrating intelligence and 4.0 enter proceedings industrial tor that will have the connectivity into products themselves). stage left and right greatest impact. Further projects and measures in the respectively. dimensions. area of Green IT are also foreseen. INDUSTRIE 4.0 INDUSTRIE 4.0 tech- represents a paradigm nologies are already be- shift from “centralized” to “decentral- ing deployed in Germany’s energy land- > CONTACT ized” smart manufacturing. (Germany scape, with intelligent networks (or has set itself the goal of being an integrat- smart grids) counting as one of the first [email protected] ed-industry lead market and provider by application areas for the Internet of [email protected] 2020.) Advanced embedded technologies Things. Smart grids enable fluctuating or “cyber-physical systems” foster intelli- renewable energy power generation and Scan the QR code to download gent machine-to-machine (M2M) commu- consumption to be optimally managed “INDUSTRIE 4.0 – Smart nication, creating an Internet of Things by facilitating a shift from consump- Manufacturing for the that enables an evolutionary shift from tion-oriented generation to generation- Future“ free of charge. conventional industrial production to optimized consumption.

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uccessful international German market. Visitors can allows English- and German-speaking trade requires access to iXPOS obtain information about members to share experiences and ideas S reliable resources and Germany, its industry sec- about their latest business activities. Reg- expert support. The official platform for tors, distribution chan- istered users can create a customized foreign trade promotion iXPOS, the foreign of the Federal Republic nels, market entry regula- homepage, communicate with other trade portal that tradition- of Germany, hosted by tions, upcoming trade members, and discuss trade-related top- ally supports German com- Germany Trade & Invest. shows, and as supporting ics on the iXPOS Forum. Furthermore, in- panies looking to enter foreign www.ixpos.de institutions. In addition, ser- terested compa- markets, now offers information vice businesses from EU mem- nies can publish in English for international entrepre- ber states can inform themselves their business neurs seeking to tap into the German about the German service market and inquiries and market. The portal also features a B2B the Points of Single Contact in the federal find potential community, where professionals can states. business part- network, market their business, and ners free of find expert advice. With Export Community, iXPOS comple- charge. ments its services by providing a platform In the iXPOS section “Your Business in where members can interact and connect Germany,” foreign entrepreneurs find with potential business partners world- guidance and support for entering the wide. The iXPOS Export Community

READY, SET, ORDER E-commerce. Want to know how to make e-commerce work for you? Contact us or meet us at the Internet Retailers Conference & Exhibition in Chicago in June.

ccording to the German E-Com- 22.9 percent compared to 2012. E-com- country the clear continental leader merce and Distance Selling Trade merce alone generated more than 80 per- when it comes to e-commerce customer AAssociation (Bundesverband des cent of the industry’s turnover, roughly potential. Experts agree that more than Deutschen Versandhandels), German EUR 40 billion in 2013. half of German GDP will be generated by B2C multichannel online and mail-or- The German e-commerce market e-commerce in 2017 and that by 2020 der business generated a total turnover generates 25 percent of the total Europe- Germany will generate e-commerce turn- of EUR 48.3 billion in 2013 and was up an e-commerce turnover, making the over of EUR 100 billion, impressive ﬁg- ures that highlight the signiﬁcant potential in both B2C and B2B environments.

Get in touch for more information on the fastest-growing e-commerce market in western Europe or to set up an ap- pointment with us during the leading trade show Internet Retailers Confer- ence & Exhibition (IRCE) 2014 in Chica- go, IL, USA, between June 10 and 13 (Booth #223).

The German e-commerce market > CONTACT generated EUR 40 billion in 2013.

[email protected] Studio/Getty Images/E+ (M) (p27) (p26); Hocus Focus (M); Tashka2000/Fotolia Alexsl/iStockphoto Photos:

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27 INDUSTRIE 4.0. Talking ‘bout a Revolution.

Integrated industry technologies being developed in Germany are driving the 4th Industrial Revo- lution. Cyber-physical systems and digital networks are creating an Internet of Things where boundaries between the real and virtual worlds cease to exist. Connected factories, intelligent products and smart services become the norm in the new production age. Join us on a journeywhich will reinvent industrial production as we know it – one in which new markets and market opportunities are created. Join us in shaping the manufacturing revolution now taking place.

Call +49 (0)30 200 099-0 or visit us at www.gtai.com “Integrated Industry – NEXT STEPS” is the key theme and motto of the Hannover Messe 2014 (April 7-11, 2014)

Supported by the Federal Ministry for Economic Affairs and Energy on the basis of a decision by the German Bundestag.

Anzeige_Markets_2014.indd 1 21.02.14 11:04