GERMANY 2/18

THE CLUSTER REPUBLIC Germany’s strong economy is built on its network of “clusters” – groups of firms and research institutions with a common focus that use their regional proximity to support each other and to innovate.

This striking pavilion in the court- yard of the University of Stuttgart was made from carbon fiber-­ reinforced composites by SGL Group, part of the MAI Carbon Cluster.

Automotive: Entertainment: Technology: The electric vehicle (EV) Gaming in Germany is Platform development industry gets ready for experiencing a period of for the Internet of Things mass market penetration exponential growth reaches the next level

page 20 page 16 page 19 FOCUS

Welcome to the Cluster Republic

From Bavaria’s medtech hub to Munich’s auto engineering hub, to Silicon Saxony, Germany has a cluster-based ecosystem Photo: Illing & Vossbeck Fotografie Illing & Vossbeck Photo: page 4

»This issue introduces Germany’s leading clus- ters; foreign entrepre- neurs share their experi- ences and offer tips.«

ENTERTAINMENT TECHNOLOGY Dear Reader,

Smart Thinking Are you looking to develop – or redevelop – your products, work closely with top scientists, join Leipzig and Dresden’s new digital hub, a network of highly innovative companies, or with a focus on smart infrastructure and smart systems, is coming of age perhaps even find the ideal partner or buyer? All page 14 this is possible in one of Germany’s top clusters. In this issue’s “Focus” story, Markets Germany introduces Germany’s leading clusters, while foreign entrepreneurs share their experiences AUTOMOTIVE and give tips on how to benefit from the “Cluster Republic.” Game On You can’t hope to earn money just by playing With multiple niches and a growing in Germany’s gaming industry, where competi- “middle-­youth” user base, the virtual tion is extremely fierce. But with games sales of gaming industry is offering real returns €2.13 billion, Germany is Europe’s largest mar- page 16 ket. That alone would be reason enough to be present in the industry there, but there are also highly trained game developers, outstanding in- frastructure and moderate overall costs making MORE ARTICLES IN THIS ISSUE: an investment worth looking at more closely.

In Brief: mini satellites, sharing sunshine, e-shuttles, Vive La e-Volution! Finally, with big plans, massive investments and urban farming and Dr. Smartphone ...... page 12 a market worth billions, e-mobility in Germany From energy charging stations to battery is gaining momentum. Markets Germany looks CEBIT 2018: Europe’s major IT fair has reinvented life improvements, the e-mobility at how international investors can best benefit itself to be more relevant than ever ...... page 18 ­industry is ramping up for 2020 from the “Auto-transition.” Machines in Flow: has there ever been a more page 20 exciting time to invest in IoT? ...... page 19

Free GTAI Publications: information Dr. Robert Hermann, CEO INVESTORS for your success ...... page 22 Email: [email protected]

Hello to Hydrogen: the HYPOS cluster shows the benefits of H2 as a clean energy carrier ... page 23 Collaboration Northern Highlights: how Finland, Latvia, Estonia on Campus and Lithuania can invest in Germany ...... page 26 How the Technical University of Munich Germany’s Image in the U.S.: by Omar Oweiss, cooperates with the corporate sector GTAI’s man in Washington, D.C...... page 27 page 24 are draining out. The planet has a closed vation.” Hegoes on:“Freshwaterresources sitive tothetopic ofwastewaterandconser- key tothecountry’ssurvival,Beery is“sen- Israel (Haifa),wherewaterengineering is nology forcleaningseawater.”Coming from recalls. “Wedeveloped a lowenergytech- because desalinationissoexpensive,” he into techniques for seawaterpre-treatment commercial potential.“Wewerelooking hit uponanideathathethoughthadgreat cal University(TU)ofBerlin,MatanBeery PhD inchemicalengineeringattheTechni- While workingonaresearchprojectforhis Matan Beery,

CEO ofAkvola Technologies

AkvoFloat™ was born. wastewater”. on industrial gan to focus The chemically we andthermally be robust,so onaceramicmembrane, is which isbased ter from theRiver technology, Spree. “The ment fundingto develop usingwa apilot - govern - pre-seed themsecure which helped were plan, abletoabusiness pull together vation center, andhisMAassistant Beery of thebiggestchallenges21stcentury. wastewater in an energy-efficientwayis one tion orreuse.”Thequestionofhowtoreuse water cycle – the answer is either desalina- Making use of the TU’s business inno oftheTU’s business use Making - - have brought him alongway. tion with finding environmental solutions, lab,try - andhisundergraduate preoccupa child playing chemis inhisgrandmother’s fordiscovery,passion asa whichbegan hind” inwastewater Beery’s management. na andIndia,where theyare “20years be The nextterritoriesto Chi- break into willbe ThyssenKrupp, Siemens,DaimlerandBP. suchas clients andboasts in centralEurope and gas,metalworking markets andrefinery theoil Akvola now inBerlin, serves Based www.akvola.com - -

Photo: Gordon Welters/laif Photo: ©ICD/ITKE Universität Stuttgart 4 Clusters are groups of firms and research institutions with a common focus that use their proximity to provide andwork mutualsupport towards shared aims. These high-tech Cluster Republic MARKETS Welcome to the hubs are idealentry pointsfor foreign companies that want to innovate. GERMANY|Focus MARKETS GERMANY | Focus 5

Fabrication of a pavilion made from carbon fiber-reinforced composites is underway, using fiber-winding robotic arms and an autonomous drone “weaver.” For this commission for the University of Stuttgart’s Institute for Computer-Based Design, SGL Group was tasked with delivering 104 kms of SIGRAFIL® 50k carbon fiber. The design technology was modeled on the larvae of the apple leaf moth, which spins its cocoon on apple tree leaves using long threads.

t all began with beer and pretzels. Jim »The Medical for Interfacial Engineering and Biotechnol- Walls, CEO of OrthoMedex, a young ogy, a renowned German research hub, who I U.S.-based orthopedic implant compa- Valley­ cluster­ is was traveling with a delegation of the Medical ny, had traveled to Cambridge, Massachu- not only profes- Valley medtech cluster from southern Germa- setts, to attend a gala evening for a delegation ny. “I left the discussion thinking Ms. Walles of German scientists and entrepreneurs who sionally equipped, seemed very interested in what OrthoMedex were visiting the area’s Life Science Cluster it also has an en- was attempting to accomplish; or was that in an effort to encourage high-tech U.S./Ger- simply my entrepreneurial exuberance?” man collaboration. trepreneurial vibe “The evening proved well worth my trav- to it that I enjoy Bavaria's innovative medtech hub el,” says Walls, who was looking for partners Eighteen months later, Jim Walls is himself and a suitable location for his company to when on site.« a member of the Medical Valley cluster. Or- develop a new bioactive glass for orthopedic thoMedex’s German subsidiary will begin Jim Walls, applications. Over beer and pretzels, he met work on a research project with the Fraun- CEO of U.S.-based medtech Heike Walles from the Fraunhofer Institute startup Orthomedex LLC hofer Institute for Silicate Research in spring 6 MARKETS GERMANY | Focus

FACTS & FIGURES 2018 with other medtech companies from the ambiance”, says Walls. “A small, manageable cluster and researchers from Yale University academic community with lots of young peo- Medical School. “At the same time, we use ple doing exciting things.” the facility and location within the Medical Valley cluster for launching new implants in Investment opportunities in clusters Germany and the EU,” explains Walls. “The Throughout Germany there are numerous cluster is not only professionally equipped, regional networks that bring together large it also has an entrepreneurial vibe to it that 58% companies, SMEs and startups, which then I enjoy when on-site.” The cluster, which is of companies in German pool resources with local research institutes situated in northern Bavaria, has world-class ­clusters say that their ­economic and universities toward a common goal: to academic and research institutions nearby, ­situation is better than the develop innovative products and services sector­ average. lots of early-stage medtech startups as well as for the global market. “The diverse research established medium-sized companies. The and development infrastructure these in- global headquarters of Siemens’ healthcare novation ecosystems offer in Germany is business is just down the street. “To me, the unique,” says Gabriel Flemming, Senior

cluster possesses a small-town Boston-like Source: Clustermonitor Germany Manager in the Chemicals and Healthcare

Thomas Mader, Head of Automation and Controls at GEA Group »We couldn’t have done it by ourselves.«

Thomas Mader, Head of Automation and Controls at GEA How does the technology work? Group, talks about the leading-edge cluster “It’s OWL”, which The system collects data about the condition of the separator is revolutionizing food production processes using intelligent through sensors. If the system detects certain abnormal patterns, technology. Since 1893, German technology supplier GEA has it intervenes without the assistance of an engineer. The AI-based been building food processing machines for the food industry, system also ensures process security in future. The intelligent sep- and now serves several industries including pharmaceutical, arator is currently a first-of-its-kind prototype. We believe there is chemical and marine. Three years ago the company’s engi- huge market potential. neers joined forces with its cluster partner Fraunhofer IEM to develop a system based on machine learning. How did you collaborate with cluster partner Fraunhofer IEM? We shared both the coordination of the project and the imple- Mr. Mader, tell us about the technology you developed? mentation of the actual technology. We are experts in mechanical For the past three years, GEA has been working on what we call engineering but it was Fraunhofer that provided the data-science an intelligent separator. Centrifugal separators separate solids and expertise. They taught us how to analyze datasets and together we liquids by centrifugal force. Together with Fraunhofer IEM, which is created a great model for how to leverage these technologies in our also a member of the cluster, we have developed a software system future portfolio. In the long term, we really have to focus on being based on machine learning that detects anomalies in the machine’s more data-driven and hire more data scientists ourselves. And this operation and compensates for these automatically. The machines is where the cluster with its many partners comes into play: we are usually monitored by an expert who controls and operates the all share our experience and knowledge to tackle the challenges system and fixes errors as necessary. Traditionally, the engineer is ahead. required to monitor the machines regularly, but this demands the full attention of the engineer who could be used elsewhere. This

costs money and can result in production delays. GEA Group Photo: MARKETS GERMANY | Focus 7

FACTS & FIGURES Cluster crunching

team at Germany Trade & Invest (GTAI). Since the aim of the clusters is to develop products and services for the world market, 8,500 €120m the companies in these networks are partic- companies work in internationalization funding ularly interested in foreign members joining together in Germany’s top 100 will be spent by 30 German innovation clusters 1) clusters starting in 2018. 2) and participating in the cluster activities, he says. “That’s why German clusters are an ideal starting point for foreign investors to gain a foothold in the German market and find partners for innovation projects and product development.” 12 €360m Foreign companies will find coopera- high-tech clusters form a network has been invested by the German tive, pragmatic development partners here. that works on current topics such ­Federal Ministry of Education and as artificial intelligence, new mobility Research (BMBF) to support 15 “Science is not being conducted here for the and smart infrastructure. 3) ­leading-edge clusters since 2008 4) sake of science; it is about bringing products and innovations to market maturity efficient- ly and at the highest level,” says Flemming. Monetary benefit to cluster players in relation to investment in the cluster 5) “Companies from abroad will find in the clusters an infrastructure of suppliers, poten- tial customers and world-class partners for research and development. There is a lot of potential for new synergies.” “The German clusters are strongly supported by the Ger- man government. Specific programs even 7% 27% 66% fund international research and develop- ment partnerships. The clusters are open to foreign members and actively seek partners from abroad to help them innovate on future Less benefit Benefits equal Benefits are greater issues.” than investment ­investments than investments

Making waves in Industrie 4.0 Financial sustainability of German clusters 6) As one example, Günter Korder, Managing Director of the high-tech cluster “It’s OWL,” is looking for foreign investors interested in Secure in the long term 70% getting involved in the network of innovative Secure in the middle term 28% companies. The cluster pools the resourc- Critical 1% es of global market leaders in mechanical Very critical 0% engineering and the electrical, electronics and automotive supply industries, as well Types of cooperation between German clusters and foreign clusters 7) as internationally-renowned, cutting-edge research institutes. “We are one of the lead- ing clusters in Europe on the topic of Indus- trie 4.0,” explains Korder. “This is because medium-sized industrial companies have traditionally engaged in very close cooper- ation. The cluster management meetings are attended by the heads of the participat- No cooperation Non-specific R&D or business R&D and business ing companies and university presidents, as at all ­cooperation collaborations collaborations 18% 16% 33% 33% opposed to just the project managers. The cooperation has a very high strategic signif- icance for all the companies involved. Many 1) Source: go-cluster/clusterplattform.de; 2) Source: BMBF; 3) Source: www.de-hub.de; 4) Source: BMBF publication “Deutschlands Spitzencluster”; 5) Source: Clustermonitor Germany; 6) Source: European Secretariat for Cluster Analysis of the companies in northwestern Germany (ESCA); 7) Percentage of competence networks and clusters in Germany, Source: Clustermonitor Germany. Life Science Nord Leading clusters WAB 8 5 6 Hamburg Aviation in Germany

Germany has many clusters, each with a different industry focus (e.g. micro­ 1 electronics, aviation, or life sciences) but It’s OWL all sharing a common format. In these re- 3 gional networks, large companies can be Silicon Saxony found working with startups, SMEs and local universities or scientific institutes to develop innovative products and services Forum Organic 4 EMN European 7 for the global market. Electronics ­Medical Valley

MAI Carbon 2

1 2 3 4

Silicon Saxony – EMN European It’s OWL MAI Carbon Cool Silicon ­Medical Valley

Founded: 2012 Founded: 2012 Founded: 2000 Founded: 2010 Location: Paderborn (head office), Location: Augsburg (head office), Location: Dresden (head office), Location: Erlangen (head office), Bielefeld, Gütersloh Munich, Ingolstadt Leipzig, Chemnitz Nürnberg, Würzburg, Bayreuth, Members: 180+, e.g. Beckhoff Members: 120+, e.g. Audi AG, Members: 300+, e.g. Infineon Bamberg Automation GmbH & Co. KG, BMW AG, SGL Group Technologies Dresden GmbH, Members: 160+, e.g. Bio-Gate AG, Miele & Cie. KG, GEA Westfalia Research facilities: i.a. Fraun- GLOBALFOUNDRIES, X-FAB e.Bavarian Health GmbH, medi Separator Group GmbH hofer Institute, Augsburg Univer- ­Semiconductor Foundries AG GmbH Research facilities: i.a. University sity of Applied Sciences, Munich Research facilities: i.a. Dresden Research facilities: i.a. Fraun- of Bielefeld, University of Pader- University of Applied Sciences University of Technology, Fraun- hofer Institute, Friedrich- born, Fraunhofer Institute Industries: materials ­processing, hofer Institute, Leibniz Institute Alexander-University­ Erlangen-­ Industries: machinery & equip- automotive engineering, aero- for Solid State and Materials Nürnberg, TITV Greiz – The ment, automotive engineering, space Research Dresden Institute for Special Textiles and electrical & electronics industry Research focus: carbon-fiber-­ Industries: microelectronics, infor- Flexible Materials Research focus: Industrie 4.0 reinforced plastics, lightweight mation and communication tech- Industries: healthcare, medical and intelligent technological design nology, mobile communications engineering systems Research focus: nanotechnology, Research focus: healthcare smart systems

5 6 7 8

Forum Organic Life Science Nord Hamburg Aviation WAB Electronics

Founded: 2004 Founded: 2008 Founded: 2008 Founded: 2002 Location: Hamburg, Lower Location: Hamburg Location: Heidelberg (head Location: Bremerhaven (head Saxony (head office) and Kiel, Members: 150+, e.g. Airbus office), Karlsruhe, Darmstadt, office), Bremen, Berlin Schleswig-Holstein Operations GmbH, Lufthansa Mannheim Members: 350+, e.g. Deutsche Members: 500+, e.g. Basler AG, Technik AG, Hamburg Airport, Members: 30+, e.g. BASF, SAP, Merck Windtechnik AG, GE Grid GmbH, Beiersdorf AG, Philips GmbH, Henkel, Schenker Deutschland AG, Research facilities: i.a. Univer- Hanseatic Power Cert GmbH Evotech AG, Sanofi Hutchinson Aerospace sitites of Karlsruhe, Heidelberg, Research facilities: i.a. German Research facilities: i.a. Kiel Research facilities: i.a. Hamburg Darmstadt, and Mannheim, Karls­ Aerospace Center (DLR), Fraun- University, Hamburg University of University, German Aerospace ruhe Institute of Technology hofer Institute, Bremen University, Technology, Fraunhofer Institute Center (DLR), Hamburg Center of Industries: electronics and photon- Siemens Industries: medical engineering, Aviation Training ics, nanotechnology, biotechnology, Industries: wind energy, maritime biotechnology, life sciences, inno- Industries: aviation information and communication industries vative medicine Research focus: aircraft construc- technology, environmental sciences Research focus: wind energy, Research focus: biotechnology tion, airlift systems Research focus: organic electronics onshore and offshore MARKETS GERMANY | Focus 9

»With our locations in ­Silicon Valley and ­Silicon Saxony, we are part of the two most powerful ­industry clusters world- wide for our sector.«

Gregory Waters, President and CEO of semiconductor company Integrated Device Technologies (IDT)

are so-called “hidden champions,” meaning member when it invested more than $300m the infrastructure of the semiconductor clus- they are hardly known to the general public (€243m) in the acquisition of the Dres- ter since the 1990s. The investment has paid but are world market leaders in their sector or den-based company ZMD in 2015. IDT’s U.S. off. The Technical University of Dresden has market niche. headquarters is situated in the Silicon Valley earned a worldwide reputation for excellence The cluster’s members are currently cluster in the San Francisco Bay Area. ZMD’s in engineering and natural sciences and its looking for partners for artificial intelligence location within the German cluster was a graduates provide the cluster with a qualified (AI) projects. “We have already identified major factor in the investment decision, says labor pool. The researchers from local Fraun- the first companies, scientists and investors IDT’s CEO Gregory Waters: “With our loca- hofer research institutes carry out practical we would like to work with in the United tions in Silicon Valley and Silicon Saxony, we research on strategically important topics in Kingdom, China, Finland and Canada,” says are part of the two most powerful industry the industry. Korder. “Our model of close research coop- clusters of the world.” “Foreign investors often buy into es- eration on future topics such as Industrie 4.0 Dresden has been a location for technol- tablished companies or startups in order to and artificial intelligence has generated a lot ogy since the days of East Germany. “Since benefit from the high-tech skills of the clus- of interest there.” reunification we have followed this tradi- ter employees, especially the well-trained tion,” explains Frank Bösenberg, Managing German engineers,” says Bösenberg. Silicon Saxony's “Silicon Valley" Director of Silicon Saxony Management. Saxony has an industry-wide reputation for Silicon Saxony is another highly success- Many billions of euros in public funding its outstanding specialist staff training re- ful and internationally active cluster. The have flowed into the high-tech region, the sources and availability, excellent scientific network has more than 320 partners in the research and educational institutions, and infrastructure, and broad base of suppliers semiconductor, electronic, microsystems and service providers. While Silicon Saxony and software industries, several of which are might be exceptional in terms of its singular FACTS & FIGURES international companies. The PEER Group achievements, it is not unusual: it is a typical is a Canadian systems integrator that serves example of a successful German cluster. the global semiconductor, photovoltaic and other high-tech industries. The company Contact: currently generates more than 40 percent [email protected] GTAI expert for Chemicals of its annual turnover at its branch office in & Healthcare Dresden. €600m [email protected] The capital of Saxony has attracted a number of high-profile international inves- in government funding has GTAI expert for Electronics & Microtechnology tors, including UAE-owned semiconductor been invested in Germany’s manufacturer Globalfoundries, which is in- leading-­edge clusters over [email protected] the last decade. vesting €1.5bn in the expansion of its Dres- GTAI expert for Industrie 4.0 den site over the next three years to increase and IoT its local production capacity by 40 per cent. [email protected] The U.S.-based semiconductor company In- GTAI expert for Machinery tegrated Device Technology (IDT) became a Source: BMBF & Equipment and Industrie 4.0 10 MARKETS GERMANY | Focus Carbon-fiber ­Musclepower

The groundbreaking cluster MAI Carbon set itself the ambitious goal of developing ­carbon fiber-reinforced plastics that could be mass-produced by 2020. Here’s how its members are revolutionizing production processes to reach that target.

MAI CARBON: HARD FACTS €80m total funding received by MAI Carbon to date

ack in 2012, the cluster MAI Car- coordinates and supports the different proj- bon set out an ambitious eight- ects, tracks their progress and evaluates the B year plan. The Managing Director results – that so far have been more than sat- Tjark von Reden had just received €40m in isfying. “We have made progress much faster funding from the German Federal Ministry 35 than we expected,” he says. of Education and Research (BMBF). The in- ongoing projects in the field of In the last six years, the network has man- vestment raised the profile of MAI Carbon as carbon fiber-reinforced plastics aged to reduce waste by about 60 per cent on one of the most innovative and elite clusters average for different production processes. in the country, and its goal to produce carbon “When we started working on the project, 30 fiber-reinforced plastics suitable for mass to 50 per cent of the fibers were tossed during production provoked interest from across the the production process,” he says. “We now industry. 20 have new processes that reduce waste to less Although carbon fiber-reinforced plastics than ten per cent and are much faster, which new companies join the ambi- are now a key component in the production saves a lot of money.” tious cluster every year of lightweight products in the aerospace in- The cluster was able to cut costs sig- dustry, they are not yet suitable for mass pro- nificantly, especially in the final stage – the duction. They still lack the process security, finishing of fiber composites. To make this short cycle times and economic scalability ­happen, six cluster members – cutting expert necessary to become a go-to material in the Hufschmied Zerspanungssysteme, Airbus automotive and engineering industries. To 120 Helicopters, BMW, The Institute of Struc- achieve their goal, the cluster members real- more than 120 partners, includ- tures and Design, The Corporation for Dia- ized they needed to bring about multiple in- ing BMW and Airbus Helicopters mond Products and carbon specialist Schunk novations along the supply chain: they had to Kohlenstofftechnik – worked on the MAI revolutionize the production process. ProCut project for three years. With funding of €2.1m, they created a milling head that is Redesigning and recycling of high quality and economically efficient. “We really needed to cut production costs 60% Whereas traditional milling heads consist of and reduce production cycle times,” says hundreds of small diamond pieces that work waste reduction in the last six von Reden. The cluster identified multiple like sandpaper, the newly-­developed tech- years across the production cycle projects, each one being realized by a hand- nology has a diamond-coated defined cutting ful of members working together. Von Reden edge that cuts as sharp as a knife due to its Aerospace beats all competition

Worldwide sales of carbon composites by ­industry in 2016 (in billions of US dollars)

11.7 2.4 1.6

Aerospace Automotive Wind power

Photo: Hans-Bernhard Huber/laif Hans-Bernhard Photo: & defense 1.4 0.4 1.9

Carbon fiber production in progress at the Technical Sports & Constructional Others University Munich, Garching, showing the interweaving recreation engineering and bundling of the carbon fibers. The technology is used widely in aerospace production and in multiple applica- tions including shock absorbers, suspension in bikes and vehicles, and in advanced industrial production processes. Automotive sector growing

Quantity of carbon fiber-reinforced ­plastics processed for the European automotive special geometry. This not only cuts costs but south of Munich. Since the summer of 2017, ­industry through 2020 (in 1,000 metric tons) also saves energy. “Fiber production needs a it has been an active member of the cluster. lot of energy. We therefore aim to reduce cy- “KDX made it very clear that they see high 34.19 47.36 59.05 cle times to improve our ecological footprint potential in the region,” says von Reden. “We 2018 2019 2020 as we go,” says von Reden. “With MAI Enviro, are bringing about innovation constantly. So we conducted our own studies that showed it is only logical for carbon specialists such as the MAI Carbon projects reduce the ecologi- KDX and Kangde to want to be part of it.” cal impact significantly.” KDX may be the first Asian member but it Demand for carbon is not the only foreign company to play an ac- Asian members take an active role tive role in MAI Carbon. In August 2018, Jap- composites increases The pace of progress is impressive: as soon anese chemical company Toray Industries Forecast of demand for carbon fiber-­ as one project is finished, the next starts will open a research facility close to Munich. reinforced plastics worldwide through 2022 straight away – there are currently 35 proj- U.S. companies such as Boeing and European (in 1,000 metric tons) ects underway. Furthermore, the cluster is businesses such as Faurecia are also part of growing: about 20 companies join each year. the cluster and operate subsidiaries in Mu- 124 156 194 One of the latest additions to the network is nich and Augsburg respectively. 2018 2020 2022 Chinese automotive specialist KDX, a sub- sidiary of the Beijing-based carbon specialist Contact: Kangde. In 2016, KDX invested in the MAI Source: Carbon Composites, Novev, [email protected] ANP Management Consulting Carbon-region and opened an R&D site just 12 MARKETS GERMANY | In Brief

Aerospace Networks in Orbit Making constellations of mini satellites

There’s plenty of room in space for big satellites, but you still have to get them there. So the smaller, lighter and cheaper the satellite, the more you can do. A start- up recently launched in Würzburg is aiding efforts to minimize satellite size, mass and cost. S4 (“Smart Small Satellite Systems”), a spin-off of the Zentrum für Telematik, produces complete, custom-made pico-­ satellite systems – often in the standard- ized CubeSat size – as well as advanced components and subsystems, such as for handling data, determining altitude and for use in telecommunications and earth observation. In addition to offering test- ing and development facilities, it can also realize formations of several mini satellites that can act as a sensor network in orbit, as well as networking devices across the world. The S4 can therefore bring the In- ternet of Things to remote locations, such as mines and oil platforms.

www.s4-space.com The mini cube satellite “Uwe 3” was launched using a Russian rocket from the test lab of the University of Würzburg on February 19, 2013, and has been orbiting the earth ever since. The purpose of the extra-terrestrial project is to provide data and practical training for students. Photo: Photo: © dpa

Food FDI Modern Mobility Going Nuts in NRW! Hey! Coming My Way? Turkish FMCG brand builds on success in Germany Ridesharing e-shuttles to debut in Hamburg

Another tale of Turkish success in North Rhine-Westphalia (NRW): The world’s first on-demand zero-emission shuttles will be hitting Tadim, the country’s leading packaged nuts and dried fruits brand, the streets of Hamburg in late 2018 as part of a collaboration between expanded abroad for the first time in 2014, setting up a production MOIA, a mobility startup owned by the Volkswagen Group, and the facility in Emsdetten. Since then, the family-run firm based in Geb- city’s public transport company. Customers order a minibus on a ze has invested around €7m in the plant, which exports to Europe, smartphone app, which then uses a pooling algorithm to combine the U.S. and Canada. In just two years, annual sales have reached passenger requests and calculate the fastest, most efficient routes. €12m. Now Tadim is investing an additional €12m into building a The Volkswagen-built electric shuttles can comfortably fit six pas- bigger production hall and office complex to boost output and in- sengers, travel 300km, and reduce traffic and pollution. The fleet is creasing its presence on European store shelves. expected to grow in Hamburg in 2019 and then spread to other cities.

www.tadim.com www.moia.io MARKETS GERMANY | In Brief 13

Green Innovation Digital Health Renewable Energy Just Add Diagnosis by Power to (and from) Water “Dr. Smartphone” The People Urban farming for the freshest fish New app combines healthcare and AI Sharing sunshine peer-to-peer

ECF Farmsystems has set up a novel urban Thanks to a new technology marrying tele- The German startup gridX is combining the farming system in Berlin, in what used to medicine and artificial intelligence, the days power of small rooftop solar installations be Europe’s largest malt house. While one of “self-diagnosis by Google” may now be across Germany to help energy prosumers area houses tanks full of tilapia, a 1,000 over. Using a chatbot interface (which has make more money and consumers get green sqm greenhouse holds endless rows of basil led some to dub it the “Alexa of health”), energy at a fair price. The company’s small plants – and both are sold at local stores. the Ada app helps users narrow down what gridBox allows private homeowners with Unlike most aquaponics systems, this one might be ailing them. After asking about solar panels to save money by intelligently boasts two water circulation systems, al- symptoms and other health data, it match- and efficiently monitoring, storing and us- lowing each to be set at the optimal pH val- es the information with earlier cases and ing the energy they generate. More impor- ue and the plants to be fertilized without supplies possible explanations. U.K. custom- tantly, the company acts as a digital power harming the fish. The fish circuit provides ers can also pay an extra fee to be put in broker, helping prosumers sell any excess water, CO2 and nitrates to the plant circuit, contact with a real doctor, who will review energy – at a fair price – to others across and the plant circuit supplies oxygen in re- the assessment, discuss it by phone and Germany via the national grid using the turn. This allows for a 70 to 90 per cent re- even issue prescriptions. Alternatively, the gridX (for “grid exchange”) platform. The duction in water use and for the fish to be app can recommend the right doctor for the founders of the company, based in Munich raised without antibiotics. The company is patient to visit with the pre-diagnosis. The and Aachen, hope their decentralized, peer- now installing turnkey systems elsewhere, Berlin-based startup is also collaborating to-peer system of distributing green energy such as in Brussels, the future home of Eu- with top research institutions to improve will make them the largest energy provider rope’s biggest aquaponics roof farm. the app’s diagnostic intelligence. in Europe – without even owning a single power plant. www.ecf-farmsystems.com www.ada.com www.gridx.de

Smart Logistics

Rolf-Dieter Lafrenz, founder and Brokering CEO of Cargonexx, has devel- oped an award-winning logistics platform that uses self-learning Truck-cess!­ algorithms to simplify processes. Algorithm finds right carrier at the right price

Less traffic, greater logistics efficiency and cleaner air are just some of the benefits to be enjoyed as online matchmaking finally arrives in the trucking world. Hamburg-based Cargonexx has developed a digital platform that simplifies the steps that freight forwarders and carriers have to take to get a shipment from A to B. The tech- nology uses self-learning algorithms to analyze a range of data – be it on freight type, dimensional weight, traffic or weather – and can then predict spot market prices for individual loadings in millisec- onds. Freight forwarders can enter a shipment request and instant- ly receive quotes at the calculated price. If they accept, Cargonexx then automatically asks carriers in its network if they will take the job. With its free brokering system, the startup has brought more than 3,600 companies and 60,000 trucks into its network – and won a truckload of awards in the process. www.cargonexx.de/en Photo: Cargonexx GmbH Cargonexx Photo: 14 MARKETS GERMANY | Technology Smart Thinking

The eastern German cities of Leipzig and Dresden joined the country’s digital hub initiative in 2017 to focus on smart systems and smart infrastructure. After just one year, ­Saxony’s de:hub has attracted some impressive partners and is open to foreign investment.

SAXONY'S DE:HUB

One hub, multiple he Digital Hub Initiative was made up of established companies and in- launched in November 2016 by the opportunities novative startups. T Federal Ministry for Economic Af- Launched in 2017, the Leipzig Smart In- fairs and Energy (BMWi) to promote digitiza- frastructure Hub is coordinated by the City Dresden tion across key industries. Twelve interlinked of Leipzig in conjunction with SpinLab, a digital hubs (“de:hubs”) were founded, each joint venture of the internationally-renowned focusing on different areas of expertise ac- Baumwollspinnerei (Cotton Mill) cultural cording to the strengths of each region. Their center and the HHL Leipzig Graduate School broad aim is to promote cooperation among of Management. SpinLab mentors startups, established companies, startups and local re- Operator: Smart Systems Hub Initiative in helping them to find office space, technolo- search and educational facilities, to further Dresden gy partners and, crucially, financial support Partners: the Saxon State Chancellery, Sil- the development of innovations for the dig- (a new VC fund has been created). The hub icon Saxony, 5G Lab, HighTech Startbahn, ital age. The underlying idea is that clusters Globalfoundries, the City of Dresden, In- opens doors to an international business net- will emerge and cross-fertilize with other in- fineon Technologies, Smart Systems Cam- work and to leading investors. dustries within the hub. pus Chemnitz etc. Netzwerk Energie & Umwelt (Network for In 2017, one of the digital hubs was award- Focal points: hardware, software, con- Energy and the Environment) – or NEU for ed to the cities of Leipzig and Dresden in the nectivity components, smart systems, IoT short – is a key support network within the eastern German state of Saxony. The partners platform, application-based solutions, IoT hub. NEU brings together 75 organizations ecosystems have different but complementary empha- under the umbrella brand Energiemetropole ses in smart systems (Dresden) and smart Leipzig (Energy Metropolis Leipzig). The Leipzig infrastructure (Leipzig) and will collaborate ­Association for Promotion of the Healthcare

across the R&D value chain. Industry (VFG e.V.) is another important partner. VFG promotes cooperation between Leipzig – fashioning a smart future local companies and international players, Just one hour south of Berlin, the city of with the aim of making Leipzig a leading cen- Leipzig is home to many well-known cor- Operators: the City of Leipzig and Spin- ter for medicine and clinical practice. porations, startups and research institutes Lab – The HHL Accelerator in Leipzig It is still early days for the Leipzig hub, but Partners: AOK PLUS, VNG Group, Leipziger in the fields of energy, eHealth and “smart some foreign companies are already investing Gruppe, European Energy Exchange, enviaM,­ cities.” It offers foreign companies and in- Porsche, Arvato Systems, DELL, con|energy, in startups: Seventure Partners from France vestors a perfect mix of excellent research HL Komm in Webdata Solutions and Lecturio; Rockaway facilities and a powerful business network Focal points: energy, smart city, e-health Capital from the Czech ­Republic in Invia. MARKETS GERMANY | Technology 15

Sensape Chimp is an interactive infotainment system that uses artificial perception to interact with customers or passersby in a creative and engaging way. It was developed by Sensape, a startup that benefited from Spinlab’s accelerator programme.

Dresden – harnessing the potential of op a software platform that is standardized, organized by a hub partner to demonstrate the Internet of Things secure and globally accessible. The hub will innovative applications, technologies and The vision of Dresden’s Smart Systems Hub foster a business ecosystem that will give business models for digitization in specific is to become a global center of excellence in Dresden an edge in the highly competitive fields, with the aim of promoting knowledge the Internet of Things (IoT). The initiative field of IoT design and applications. The ini- exchange and collaboration between stake- aims to build a strong network that integrates holders inside and outside the hub. hardware, software and connectivity, in or- der to develop the basic technologies that will Foreign investors welcome digitize industry and support Industrie 4.0. Saxony’s de:hub is still at an early stage, but Since October 2016, the Smart Systems Hub as it develops, a wide range of opportunities Initiative – a task force that includes the State The ultimate goal will open up for foreign investors. While the of Saxony, Dresden’s City Hall and Technical of the de:hub is current players are mainly German, foreign University, Silicon Saxony, a renowned trade partners and startups are most welcome, says association for the semiconductor, electron- to achieve digital SpinLab’s Eric Weber. “Whether a startup joins ic, microsystems and software industries, one of the hub’s accelerators to get a soft land- and the Fraunhofer Institute for Electronic transformation ing into the German market, or whether an Nano-Systems – has been working hard to established corporation wants to exploit the establish the hub, acquire partners and at- technological competences of hub’s partners, tract investment. Key industrial partners of we are always open to international partners.” the Smart Systems Hub are SAP, T-Systems One example is the U.S.-based computing gi- MMS, Globalfoundries, Infineon and Nation- tiative will provide long-term support for key ant DELL, which is exclusively supporting the al Instruments. industries, especially microelectronics, with Smart Infrastructure Hub in Leipzig. With the ultimate goal of achieving a primary focus on SMEs. digital transformation, Dresden’s “Smart The Smart Systems Hub offers interested Contact: Systems Hub – Enabling IoT” will bundle parties – investors, entrepreneurs and man- [email protected]

Photo: Sensape GmbH, Clemens Jurk Photo: expertise in the three key areas and devel- agers – a guided tour or “Trail.” Each Trail is 16 MARKETS GERMANY | Technology Game On

The gaming industry in Germany is enjoying exponential growth, driven by diversification of platforms and new niches, as well as a surge in “middle-youth” players. With investment opportunities opening up across multiple niches, the virtual world offers real returns.

Gaming enthusiasts queue outside Games- com 2017, the world’s largest computer game fair on the grounds of Koelnmesse, Cologne. This year it runs from August 21 to 25. Photo: picture alliance/Geisler-Fotopress picture Photo: MARKETS GERMANY | Technology 17

FACTS & FIGURES

he world of investment is full of pool of technology specialists, which is why references to gambling and game Germany’s digital hubs in Berlin, Hamburg T theory: you “hedge your bets,” you and Munich are attracting so many innova- “stick or twist” but ultimately you will have tive startups. But it’s the multiple niches that to “back your horses.” It’s an inherently risky €2.13bn exist within this market, and the opportunity business and strategies may be taken to their to create new high-value ones, that make Ger- turnover from games soft- end game or abandoned mid-way. The gam- many so appealing to investors and interna- ware sales (including in-game ing industry in Germany, however, is actual- ­purchases) in Germany in 2016 tional gaming companies. The more people ly one of the safest bets for investors looking play and interact, the more value-creation for relatively quick wins, new levels of excite- opportunities are generated within the game ment and high prizes. development world. It’s an industry that is ca- Users of digital games in Germany Germany is Europe’s largest gaming mar- pable of sustaining exponential growth. ket with over 34 million computer or video gamers – a number growing by the minute – Sales of apps and items drive growth and it has seen a greater surge of online games Game apps are one of the greatest drivers than any other European country. Statistical of growth in the computer and video games data also dispels the notion that this is solely industry, as well as in the mobile ecosystem a market for bored teenagers and geeks: the of smartphones, tablet, app stores and the average age of a German gamer is 35, while the 5.8m 28.3m mobile internet. The market for in-game pur- fastest-growing (and biggest) group of players play occasionally play regularly chases and “item selling” such as more lives, is the 50-plus bracket, according to statistics unlocked levels and virtual equipment was from the former Bundesverband für Interak- worth €562m in 2015, up from €209m two Which devices players in Germany use tive Software (BIU) for 2016. It’s a huge market years before. While the PC remains the top of willing customers who are ready and wait- gaming platform, game estimates that the ing to be entertained, and is full of niches to be number of gamers on smartphones increased explored and new values to be created. by 14 per cent between 2014 and 2016, while the number of tablet gamers increased by 44 Rapid market developments per cent over the same period. Perhaps in response to this – and befitting an “Gaming and related services is actually industry that can hardly be regarded as niche 17.4m 17.3m a bigger market in Germany than, for exam- any more – the two industry associations, computer/laptop cellphone ple, the movie industry,” says Oliver Wilken, BIU and GAME, merged at the end of January Digital Economy Manager at Germany Trade under a new moniker: “game – the German & Invest. “Germany attracts international Games Industry Association.” “It is a histor- gaming companies with its highly-skilled ic day for the German games industry as a and internationally-minded workforce, its whole,” says Felix Falk, Managing Director state-of-the-art IT infrastructure and govern- of the new organization. “The forward-look- ment support, as well as numerous gaming 15.8m 11.5m ing merger of the two associations unites the games console tablet computer industry events, such as the world-renowned industry, enabling us to advocate jointly, and Games­com in Cologne in August.” therefore even more persuasively and power- “Casual gaming, social gaming and free- fully, for the interests of the entire German Average age of players in Germany to-play MMO (massively multi-player online) games industry.” games are driving this growth. The increas- Those interests are significant. Germany ing number of smartphones in Germany 35,5 has the most internet users in Europe and the 31 has resulted in greater demand for mobile largest physical population, and therefore games – and it has opened up completely holds significant potential for more business. new customer groups.” Its mobile device market is also growing rap- idly: traditional sales of physical or download- Contact: ed games accounted for 63.2 per cent of reve- [email protected] nues in a €1.9bn market in 2015, according to game. The German games market is founded 2011 2016 Further information: on a winning combination of moderate costs, www.gtai.com/gaming excellent infrastructure and a large talent Source: BIU 18 MARKETS GERMANY | Technology The New CEBIT

CEBIT 2018 has redesigned itself to earn the title of Europe’s leading festival for ­digitization and business innovation. This June, Hanover will welcome entrepreneurs, digital leaders and foreign investors from around the world.

ABOUT CEBIT

The festival where EBIT, one of the world’s leading the future is now d!campus – “the beating heart of the show,” IT trade shows, is reinventing itself offering immersive experiences in digital C this year with the aim of becoming technology, entertainment, opportunities for Europe’s leading platform (bringing together one-on-one interaction and street food. the three elements of conference, exhibition and festival) for digitization and business in- “It’s going to be more fun and entertaining, novation. CEBIT organizer Deutsche Messe more astonishing, brighter and bolder, and has teamed up with the digital industry to open up new vistas like never before – at rebuild the event from the ground up, while times even in an intentionally provocative still presenting a wide-ranging look at digital way,” says Deutsche Messe Managing Board technology in the modern world. member Oliver Frese. The show will be “a In addition to rescheduling the event lead-generating powerhouse, delivering win- The inventor of SpotMini and founder of in June and boasting an overall new look, Boston Dynamics, Marc Raibert, will be win outcomes and added value” for partici- CEBIT will unveil a new mix of themes and coming to CEBIT 2018 with his four-legged pating companies and organizations, he adds. formats, including exhibits, conferences and robot companion, to give a keynote address CEBIT is also making a major effort to target on June 12. networking events, which will cover all as- the “Generation Y” crowd, which Frese says pects relating to the digitization of business, is “now surging onto the marketplace, brim- CEBIT takes place in Hannover from June the public sector and society. The revamped ming with confidence and bright new ideas.” 11 to 15, 2018. The five-day trade fair starts show promises to offer international IT deci- on Monday, June 11, with a conference and Representatives of Germany Trade & In- sion-makers in particular an experience like media day (registration required). The exhi- vest will attend and be available for any inqui- never before. bition and festival starts on Tuesday, June ries. “Nowhere else do we have the opportuni- This year, several international compa- 12. CEBIT expects even more exhibitors and ty to talk to such a vast selection of companies nies will be presenting real-world solutions visitors than last year, when more than of the digital economy, build up our network and technologies that industrial users need in 3,000 exhibitors from 70 nations show- in ICT and learn about new trends in one cased their innovations to 200,000 visitors. order to successfully digitize their operations. place,” says Isabel da Silva­ Matos, Senior This year, in addition to the Internet of Things and AI, the topics will include block- Manager, Investor Consulting at GTAI. The new CEBIT is divided into four chain, augmented and virtual reality, secu- Interested in meeting us at CEBIT? main sections: rity, future mobility, drones and humanoid Contact us: robots. d!conomy – dedicated to the digitization of Isabel da Silva Matos business and government. CEBIT is Germany’s most important IT [email protected] d!tec – focusing on the digital future, emerg- event, reflecting the country’s leading role Marc Philipp Althaus ing technologies, disruptive business models in the sector. Germany’s IT market has con- marc-philipp.althaus@ and new value-creation networks. tinued to grow steadily over the past three gtai.com d!talk – a conference program covering di- years and is forecast to rise 2.9 per cent in 2018 to €79.3 billion. Further information: verse economic, political and social issues www.gtai.com/ict

revolving around digitization. www.cebit.com Dynamics Boston of courtesy image robot SpotMini Photo: MARKETS GERMANY | Technology 19 Machines in Flow

Germany is one of the largest markets for the Internet of Things applications and is experiencing an upsurge in platform development, which will enable yet further diversi- fication. From an investor perspective, is now the right time to jump into the IoT?

Volvo has teamed up with Microsoft to bring Holo- Lens to its customers, a groundbreaking hologram technology that will allow users to explore the inner workings and features of their vehicles.

he Internet of Things (IoT), which enables connectivity and data ex- T change between objects, machines and production plants, is one of the most sig- nificant trends in industry. To facilitate the use of IoT in multiple fields, developers are creating platforms that allow companies to design their own applications. For example, manufacturers will be able to remotely moni- tor their facilities and equipment, in order to increase operational efficiency. Last year, one in three industrial com- panies invested between five to ten per cent of annual revenue in IoT apps. Worldwide spending on IoT is estimated to reach some €650bn this year. And by 2025, McKinsey say, IoT tech will add as much as €3 trillion in val- ue to networked factories. As one of the largest markets for IoT ap- plications, Germany is seeing an increase in IoT as a growth driver with a view to great- ficial Intelligence (AI) Insider Lab, after open- platform development that is creating dy- er customer proximity, new services and ing facilities in the U.S. and China. “As the namic opportunities for domestic and for- business models,” says Asha-Maria Sharma, world becomes more digitized and connected, eign investors. “Businesses increasingly see ­Senior Manager of Investor Consulting at the opportunity for businesses to transform Germany Trade & Invest. “Further invest- has never been more real,” says Harriet Green, ments, for example in IoT platforms and IT General Manager of Customer Engagement infrastructure, will follow.” and Education at the IBM Watson center. The »The IoT is no longer According to Bernd Gross, CEO of IoT soft- IoT “is no longer a story of future growth. It’s a story of future ware provider Cumulocity, which originated a story about the here and now, and the out- in California and is now part of Germany’s comes speak for themselves,” she adds. growth... but about Software AG, pre-packaged IoT solutions are the here and now.« facilitating the trend away from costly and Contact: time-consuming in-house and tailor-made [email protected] Harriet Green, solutions. IBM last year opened its global Wat- General Manager of Customer Engagement son IoT headquarters in Munich – a signifi- and Education at IBM’s Watson center Further information: cant investment. Microsoft has also chosen www.gtai.com/industrie4.0

Photo: Microsoft Corporation Corporation Microsoft Photo: Germany as the base for its third IoT and Arti- 20 MARKETS GERMANY | Energy Vive La e-Volution!

The e-mobility industry in Germany is on course for mass market penetration by 2020, with production, R&D and supporting technologies ramping up to meet that target. Is now the perfect time to invest?

A CETOs electric car (modelled on an Opel Corsa) charges at a tourist rental station in Welzow, near Brandenburg. Initiated by Brandenburg Technical University, the e-SolCar project has made e-cars available to tourists since 2013. Photo: picture alliance picture Photo: MARKETS GERMANY | Energy 21

»We decided to choose Germany as the first stop on our roadmap to entering the European market.«

Simon Hou, COO and co-founder of XCharge

he expansion of the e-mobility in- Among the overseas firms attracted to invest in China. “We decided to choose Germany dustry is a priority for the German in Germany are XCharge, a Chinese producer as the first stop on our roadmap to entering T government. As part of the coun- of charging points for EVs and cloud-based the European market,” says Simon Hou, COO try’s environmental policy, there is a push charging software. It opened its new Euro- and co-founder of XCharge. “Germany has a to rapidly increase the number of electric pean HQ in Hamburg last December, hav- long and successful history of development vehicles (EVs) on the road by 2020. The fed- ing sold more than 20,000 charging points in the automotive industry. Most of today’s eral government is ploughing hundreds of best car brands were born here. There are millions of euros into research and develop- top technical and management talents here ment, infrastructure projects and subsidies that we are looking to develop. There are also for car buyers. Meanwhile car manufacturers favorable policies at both national and local are bringing more and more models to mar- levels to stimulate the growth of ­e-mobility ket. The opportunities for investors in the in- and renewable energy industries – policies dustry have never been better. that are friendly to international companies.” The Nationale Plattform Elektromobi­ André Kaufung lität (NPE), which set out plans to convert the Germany leads Europe's “e-Volution" automobile market to electric, is on course CEO & Managing German Original Equipment Manufac- to achieve mass market penetration of the Partner, CharIN turers (OEMs) are also fully backing the e-mobility industry by the target date of 2020. “e-­Volution.” In 2015, there were 30 differ-

The public subsidies available to car buyers CharIN e. V. was founded by ten OEMs ent EV models on the market, a further ten total €1.2bn. A further €300m is being spent and charging station manufacturers were added in 2016 and all have huge plans on upgrading e-mobility infrastructure over in 2015. Headquartered in Berlin, the for the next three years. Volkswagen alone is association now has more than 110 the next three years: €200m for DC charging, members and represents 17 of the top looking at introducing 20 new e-models by which can fully charge vehicles within min- 20 car brands worldwide. 2020, while BMW plans to produce a plug-in- utes, and €100m for AC charging stations, hybrid version of every major model on the which are slightly slower. The generous tax What are the biggest opportunities for market. breaks for EV owners include zero-rated ve- CharIN? “Germany is Europe’s leading production We have global co-operation with multina- hicle tax for ten years and income tax breaks and sales market in the automobile industry,” tional members, as well as a market imper- on charging cars while at work. EVs will also ative for fast and safe charging systems for says Stefan Di Bitonto, Senior Manager of Au- account for 20 per cent of the government’s e-mobility and inductive charging. Charging tomobile Industries at GTAI. “There is a res- fleet of vehicles by 2020. infrastructure for all applications will play olute attitude to promoting e-mobility here, an essential role in the uptake of EVs. as it is an integral part of the bigger picture of Boost to EV infrastructure Germany’s environmental policy. The focus These measures address the main impedi- How do you work with foreign companies? is moving away from pilot programs toward Our local offices share regional devel- ments to the wider use of e-vehicles, partic- the creation of a nationwide e-mobility infra- opments and challenges with members. ularly the shortage of charging stations and Working in groups, our members debate structure and sustained business models to low supply of Li-Ion batteries. The extra in- the current challenges and develop com- form a viable alternative to petrol and diesel vestment will see the number of AC charging mon requirements regarding different top- engines. This requires investment, but cre- points in Germany rise from 7,100 to 70,000 ics, such as charging infrastructure. ates a huge opportunity for private compa- by 2020, while the amount of DC charging nies to stake a claim in an industry heading stations will increase from 300 to around How can new companies get involved? for a period of explosive growth.” Members are invited to join focus groups, 7,000 over the same period, according to NPE participate in position papers and discuss research. Plugs and sockets for e-vehicles are requirements for global charging standards. Further information: also being standardized, which will keep con- Membership details are available on the www.gtai.com/charging-­ infrastructure Photo: CharIN e.V. Charging Interface Initiative Interface Charging CharIN e.V. Photo: sumer costs down. CharIN website www.charinev.org. 1. Register: at 22 MARKETS GERMANY | Energy www.gtai.com/ publications

2. Select: enter order Free GTAI Publications number in search box 3. Download: click on Information for your Success PDF and save the document Find more publications on www.gtai.com

Investment Guide to Germany Investor’s Basics Lightweight Industry in Germany Business Services

Walks you step-by-step A tax and legal guide Lightweight construction The business services market in through the process of setting up to setting up business solutions open the door to ­Germany is the second largest in your own company in Germany. in Germany. new applications. EMEA and is expected to grow. Order number: 20839 Order number: 20859 Order number: 21034 Order number: 20983

Microelectronics Photonics Mechanical Engineering Medical Technology

Germany is a major microelectronics Germany is Europe’s leading Mechanical engineering Medical technology force and Europe’s leading semi­ ­photonics nation (over 41 per cent industry clusters in Eastern industry clusters in Eastern conductor production location. of continental production). Germany. Germany. Order number: 20985 Order number: 21000 Order number: 20964 Order number: 20963

Publisher: Managing and Content Editor: Eva Forinyak ity, however, for the accuracy of the information provided. Germany Trade & Invest Gesellschaft für Außenwirtschaft Consultant Editor: Daniel Stephens Articles published under specific names do not necessarily und Standortmarketing mbH Editorial Team KammanRossi/wortwert: reflect the opinion of the publisher. No reprints may be Friedrichstraße 60, 10117 Berlin, Imogen O’Rorke, David Batty, Christoph Hus, Jürgen Jehle, made without the prior consent of the publisher. Unless T. +49 30 200 099-0, F. +49 30 200 099-111, Andrea Reibold. specified otherwise, the copyright for pictures is held by [email protected], www.gtai.com Design and Layout: Arne Büdts, Verena Matl Germany Trade & Invest. Print: Kern GmbH, 66450 Bexbach, www.kerndruck.de Order number: 21003 Excecutive Board: Circulation: 5,000 Cover: ©ICD/ITKE Universität Stuttgart Dr. Jürgen Friedrich, Chairman/CEO; Distribution: Markets Germany is distributed solely by Dr. Robert Hermann, CEO the publisher all over the world. Notes: © Germany Trade & Invest, June 2018 Director Corporate Communications: All information provided by Germany Trade & Invest has Andreas Bilfinger been gathered with the utmost care. We assume no liabil- MARKETS GERMANY | Energy 23 Hello to Green ­Hydrogen

The green hydrogen economy in Eastern Germany is a key element in Germany’s plan to transition to renewable energy sources by 2020. The HYPOS cluster ­demonstrates how hydrogen can be a safe, cost-effective and widely-used energy carrier.

he Fukushima nuclear disaster stored and later converted back to electricity includes the electricity and chemical flow in March 2011 changed the course or heat. It can also be used in mobility and as grids in Leuna and Schkopau, and a large gas T of Germany’s energy policy by ce- an industrial raw material. “Hydrogen can be storage facility in Bad Lauchstädt. Research- menting the government’s decision to phase used to produce plastics, fuels and precursors ers in Leuna are also investigating using elec- out the country’s reliance on nuclear power. for the cosmetics industry – in fact anything trolysis to split water into H2 and oxygen on But even before Fukushima, legislation was for which petroleum-based systems are used an industrial scale. put in place in 2010 to support the Ener- today,” says Ralf B. Wehrspohn, deputy CEO As half of the energy generated by these giewende (Energy Transition), which result- of HYPOS and Director of the Fraunhofer sustainable technologies is sold outside the ed in a huge expansion in renewable energy Institute for the Microstructure of Materials state as surplus, the H2 economy provides a sources, particularly wind power. But this, in and Systems (IMWS) in Halle. significant boost to the region. “We have the turn, created an unforeseen problem: what to power here, we convert it into H2, and then do with the surplus power produced? we can supply our chemical chain directly Hydrogen Power Storage & Solutions East and no longer need to purchase petroleum Germany (HYPOS), a cluster of German com- and natural gas from more distant regions,” panies and research institutions including H2 can be used Wehrsphohn explains. Siemens, Linde and the Fraunhofer, Max- Since its inception in 2013, the HYPOS Planck and Leibniz Institutes, promotes the to produce network has grown from seven to over 100 use of surplus energy from wind farms and members today. It operates as a platform for solar parks to produce hydrogen (H2), which anything that the exchange of knowledge on production, is then fed into the chemical delivery pipe- transport, storage and utilization of green lines, natural gas grid and electricity supply petroleum-based hydrogen. It’s still early days, but HYPOS networks in eastern Germany. The aim of this aims to produce green H2 economically and groundbreaking project is to make safe, green systems can. safely by 2020, when it could be used in hy- hydrogen a widespread, cost-effective ener- drogen fuel cell cars, domestic heating, in gy carrier and reduce dependence on fossil industrial applications and also to compen- ­fuels. The project is partly funded by the Ger- sate for fluctuations in solar or wind energy man government, and has funding totaling Saxony-Anhalt has been a pioneer in the generation. These and other benefits, such €45m for the next four years. development of renewable energy projects: as ease of transportation, make it a potential every second kilowatt hour generated in the game-changer in the transition from fossil H2: a clean, green solution state now comes from wind, sun or biomass. fuels to renewable energy sources. Hydrogen, which can be generated by split- With an annual hydrogen-generation capaci- ting water into hydrogen and oxygen mole- ty of approximately six billion cubic meters – cules through electrolysis, is an underused mainly still through conventional hydrocar- Contact: energy carrier. It is not only environmentally-­ bon processes – the region’s infrastructure [email protected] friendly but, unlike electricity, can be easily provides excellent conditions for HYPOS. It 24 MARKETS GERMANY | Investors Collaboration on Campus

The Technical University of Munich cooperates more closely with the corporate sector than any other German university. While the students benefit from hands-on training, companies get ideas for innovative products and new technologies.

Manfred Schwarz »Elon Musk con- n August last year, the American en- gratulated me: that entific universities in Germany is one of the trepreneur Elon Musk caused a flurry of was my highlight.« reasons why it is an excellent international I excitement when he posted a video on research location. The TUM follows two dif- Twitter. The 26-second clip makes the viewer While studying mechanical engineering ferent models for collaboration – “Contracts feel quite dizzy: as the camera moves faster at TUM, Manfred Schwarz and his fellow for Work and Services” and “Research and and faster along a neon-lit tunnel, the lights students developed a Hyperloop capsule Development Agreements.” With the former, for the U.S. entrepreneur Elon Musk. flicker wildly, until the ride suddenly ends. companies pay an upfront fee for a clear uni- The camera was attached to a maglev train (a Mr. Schwarz, how did you get to work versity assignment, then the students mea- “Hyperloop” in technical jargon), powered by with Elon Musk? sure or test components, collect data and an electric motor. The capsule reached up to Musk organized a competition to build a evaluate it. With the R&D agreements (more 324km/h – a record for a Hyperloop capsule. working Hyperloop prototype. More than common), the university and its partners The prototype, which was developed by stu- 1,000 teams entered worldwide but we mutually agree on the research topic and the presented the most persuasive concept and dents of the Technical University of Munich timetable for delivery, with the option of re- won the competition. (TUM), will help to revolutionize travel: one newal. The university typically provides the day these capsules could carry people to their How long have you been working on the laboratories, where the students either work destinations at speeds of around 1,200km/h. capsule? alone or in concert with company employ- The sky’s the limit for the students of About a year. We developed and tested the ees. In both cases, the university ensures the TUM, who aspire to solve the problems facing individual parts in Munich. However, we results are not compromised, i.e. companies humanity by developing the key technologies didn’t know if they would work together cannot specify fixed goals or influence the because we didn’t have a test tube, so we of the future. In order to prepare students for outcome. sent the parts to the U.S. and assembled the challenges ahead, the TUM cooperates them there. During the test run, the cap- with a large number of companies, many of sule accelerated to a speed of 324km/h, A win-win partnership which come from overseas. “Such coopera- more than any capsule before. Only then Through this kind of cooperation, the univer- tion offers advantages for both sides,” says did we know that one year’s work has paid sity can offer its students hands-on training Thomas Hofmann, Vice President of Re- off. Elon Musk was standing next to us as and real-world experience. The corporate search and Innovation at TUM, who coordi- our capsule set the speed record. partners in turn benefit from ideas for new nates several joint ventures between German business opportunities and new and im- How did that moment feel? and foreign companies. Outstanding. Musk congratulated us all and proved products. Furthermore, connections The synergistic relationship that exists shook hands with us. That was my personal are made with talented students who could

between industry and many of the top sci- highlight. later graduate to become valuable employees. Hyperloop WARR Photo: MARKETS GERMANY | Investors 25 Photo: picture alliance/AP Photo alliance/AP picture Photo:

SpaceX CEO Elon Musk congratulates the win- ning team of the Hyperloop Pod Competition II at SpaceX’s Hyperloop track in Hawthorne, California. The student team “WARR” from Munich’s Technical University won the contest with a peak speed of 324km/h.

WHAT'S THE BIG IDEA? The US giant General Electric (GE) is one of business models to make the contracting pro- TUM’s biggest partners. Since 2004, students Innovating together cess easier. The university’s main concern is have been working with GE on a project to to secure its rights: students must be able to

design and build more efficient gas turbines In Germany, cooperation between univer- write about their work and publish the result, for use in aircraft, in the pumping stations of sities and companies is widespread. “Not perhaps in the form of a doctorate. From the oil and gas pipelines, or to drive battle tanks. only do large companies work together with companies’ perspective, they must gauge in In 2016, TUM opened a new laboratory with universities, but also SMEs,” says Mathias advance which areas are suitable for collabo- GE on campus and the costs (€15m) were Winde from Stifterverband, a unique or- ration and sharing (for example, where trade shared between the company, the university ganisation with over 3,000 members which secrets are involved, the university may not brings companies of all sizes together with and the state of Bavaria. For GE, the financial be the right partner). Cooperations work best foundations, donors and private individu- outlay has already paid off: TUM has devel- als, to drive improvements in the fields of where companies want to explore and open oped a 1,300hp (horse power) engine for the education, science and innovation. For ex- up new business areas. “It’s important for the company that consumes 20 per cent less fuel ample, since 2009, the Technical University TUM to work with its partners on an equal than older models. This engine will soon be- of Darmstadt in Hesse has been working footing,” Hofmann points out. The principles come the standard for small business aircraft closely with the railway operator Deutsche of the university are published on its website including, for example, the Cessna Denali Bahn on IT security and environmental for the benefit of potential partners. protection within largescale construction made by U.S. manufacturer Textron. projects. The University of Cologne also Through years of successful collabora- cooperates with several companies such as Further information: tion with the corporate sector, the university the international pharmaceuticals company www.tum.de/nc/en/tum-­ has developed professional standards and Bayer Healthcare. business/industry-liaison-office 26 MARKETS GERMANY | Investors Northern Highlights

Historically, Finland and Germany have strong relations and a similar business ­culture, making them natural business partners. Marc Lehnfeld, Director of Germany Trade & ­Invest’s Helsinki office, talks to us about working with Europe’s northeast territories.

The annual startup event Slush in Helsinki, Finland, (December 4 to 5, 2018) attracts international start- ups and investors to the Nordic country.

TAI’s northernmost overseas office in Helsinki has been run by Marc G Lehnfeld since 2016. It surveys mar- ket activities for Finland, Estonia, Latvia and Lithuania and is the first contact point for local firms interested in expanding to Ger- many. The close cooperation between GTAI, the German-Finnish Chamber of Commerce (AHK) and the German embassy boosts Ger- many’s visibility in the northern territories.

Mr. Lehnfeld, how would you character- ize the Finnish economy? MARC LEHNFELD: In Germany, Finland is well- known for its sauna culture, beautiful nature and large forests. The forest industry is still the country’s largest export sector but the chem- ical, mining and metal industries also play an important role. Nokia is once again Finland’s largest company and IT is still an important field with many startups entering the market. And does GTAI cooperate in this field LEHNFELD: It is hard to name just one, but with ­partners like the AHK? we advised IT company Arcusys and artificial What attracts Finnish investors to Ger- LEHNFELD: Being a public organization, GTAI intelligence company DAIN Studios on their many as a business location? is a trusted partner of Finnish companies and business set-up in Germany. But one of the LEHNFELD: Germany is the largest Europe- institutions. We can identify the best loca- most significant investment projects is Finn- an economy and that means a lot to Finnish tions within Germany for the investor and ish energy company Fortum’s recent acquisi- companies, whose home market consists of deliver valuable information about the reg- tion of 47 per cent of Uniper shares. only 5.5m inhabitants. Also, Germany is a tech- ulatory framework and available incentives, nology market with important target sectors all free of charge. In particular, the AHK pro- GTAI CONTACTS

like the automotive, chemical, machinery and motes our services and is an important gate- Marc Lehnfeld metal industries. Many Finnish IT companies way for us. Through our close cooperation, we Director of the GTAI office for Finland, Estonia, offer competitive products and services for also advise the Chamber’s customers on their Latvia and Lithuania – [email protected] Germany’s fast-growing IoT segment. Finnish investment plans in Germany – usually the Gabriela Heinrichs companies appreciate the similar business cul- second step after a successful market entry. Executive Unit Strategic Partnerships (GTAI) and liaison to the German ­Chamber Network – ture and the historically strong relations. [email protected] What was the most important invest- Dagmar Ossenbrink How can GTAI support Finnish compa- ment by a Finnish company in ­Germany CEO of the German-Finnish Chamber of Commerce –

nies that want to invest in Germany? last year? [email protected] Samuli Pentti Slush 2017, Photo: MARKETS GERMANY | Opinion 27 Germany’s ­Image in the U.S.

Over the course of ten years in my professional roles for GTAI, acquaintances and ­business partners have shared many anecdotes, opinions and stereotypes about Germany. Ask most Americans what they think about Germans, and you just might be surprised.

s an American, born half Ger- life balance” is not as sacred as in Germany. man/half Egyptian, I am enjoying Americans typically have only two to three A the unique opportunity to live and weeks off per calendar year. They are amazed work in Washington D.C., a diverse and mul- by the amount of vacation days in Germany, ticultural metropolis in the United States. and also notice the differences in employee In sharp contrast to my affiliation with the rights, such as parental leave. Middle East, it has been extremely pleasant, Furthermore, I am occasionally surprised particularly in the last six to eight years, to that some entrepreneurs do not recognize introduce myself as half-German in the U.S. »Germans are Germany as a “European hub.” Potential in- Smalltalk at business functions with Ameri- much admired« vestors might be well-informed about the can counterparts typically consists of stories German economy and the legal framework, of their German ancestry or travel and work but often fail to recognize Germany as a place Omar Oweiss is Director of Investor in Germany. The positive stereotypes praise from which one can access the large Europe- Consulting at Germany Trade and the eco-conscious, reliable, organized and Invest’s Washington, D.C. office. He an market. Additional information and per- high-tech Germans as well as their great beer, currently focuses his attention on suasion is sometimes needed. fast and desirable cars, and their famous Oc- North American companies interest- On the other hand, you do not need to toberfest celebrations. There is a clear admi- ed in international expansion within convince Americans about the top quality of ration for this society, which also embodies the chemicals, life sciences and ser- German products. They enjoy an excellent great organizational skills, punctuality and a vices industries. reputation – not even the Volkswagen (VW) sound infrastructure. diesel emissions scandal of 2015 could shake This impression and image of Germany the American public’s confidence in German was confirmed by the market research in- brands. Of course, it’s important to note that stitute GfK and their political consultant Si- Cross-cultural currents the resolution offered to U.S. customers who mon Anholt in November 2017. According to While it may seem that Germany is promot- were affected by faulty VW vehicles was sub- his study, Germany has the best reputation ing itself as an attractive investment destina- stantially better than in many other coun- worldwide and has surpassed the U.S. as well tion, there are some issues and concerns that tries. But the fact remains, if someone wants as other countries in many different aspects. come up. German labor laws are perceived as to buy quality products, the “Made in Germa- The study illustrates that Germany’s image is highly restrictive to American counterparts, ny” seal is highly sought after. no longer solely based on its strong econom- who are more accustomed to the American ic power. Germans are highly respected and hire-and-fire mentality. Higher taxes, a lack admired around the globe and Germany has of tax breaks and their views on personal and Contact: become an attractive and desirable destina- vacation time rankle with some U.S. entre- [email protected]

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