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Sector Report: Logistics
INVEST IN GERMANY MAGAZINE
VOL 01 | 04.2008
German Engineering – The Quiet Giant
2 Invest in Germany Magazine
Content
6
13
14
Major Investment
Irish Investment with Japanese Technol-
ogy in Germany ...................................... 3
Welcome Address
The Members of the New Supervisory
Board of INVEST IN GERMANY ........ 4/5
Cover Story
Mechanical Engineering:
Germany’s Industrial Backbone ....... 6/7
Robotics and Automation:
Smart Machines ..................................... 8
Success Story
Chinese Capital Meets
German Tradition ................................... 9
Industry Report
Fighting Half
a Trillion Plastic Bags ..........................10
Perpetuum Mobilae .............................. 11
Roaring Red Biotech .............................12
State and Venture Capital Financing
for German Biotech ..............................13
Chemical Industry
Powers Innovation .............................. . 14
Dow Wolff Cellulosics Focuses
on Research in Germany ......................15
The New Alchemy:
Turning Corn into Plastic .....................15
Destination Germany ............................16
Our Events
Turning the Silver Society into Gold ....17
German Business
World Leaders in Small Business ...... 18
The Stunning Rise of
a Healthy Drink .....................................19
Germany Celebrates Its
Best Entrepreneurs ............................. 20
Current Issues
The Tides of Offshoring Turn Back to
Germany ............................................... 21
Marketing Germany
“Best of”
Federal Creativity ................22/23/24/25
Innovative Germany
T-Shirts that Glow and Warm;
Nuts for Oil – a 21st Century
African Tale .......................................... 26
Visual Impressions for Blind People;
Injecting CO2 Into the Soil ................... 27
The Best of German Innovations ... 28/29
Innovation Management
Managing Ideas .................................... 30
Future Germany
Foreigners Dream
the “German Dream” ............................31
Web 3.0:
Germany’s Flagship Project ............... 32
No Fear and Fighting Spirit................. 33
Financing
Financing Germany’s Industries of
Tomorrow ............................................. 34
On the cover:
Escalator production: assembly unit for
escalator balustrades at ThyssenKrupp
Fahrtreppen GmbH in Hamburg
Imprint
Publisher:
Invest in Germany GmbH
Friedrichstraße 60
10117 Berlin
Phone: +49 (0)30 200 099 0
Fax: +49 (0) 30 200 099 111
www.invest-in-germany.com
Managing Director:
Michael Pfeiffer
Chairman of the Supervisory Board:
Michael Glos, Federal Minister of
Economics and Technology
Director Public Relations:
Eva Henkel
Editor:
Eva Forinyak
Language Editor:
Josh Ward
Design:
www.typoly.de (Art: Inken Greisner)
Litho:
Dietsche & Gebhardt, Berlin
Print:
Medialis Offsetdruck GmbH, Berlin
Distribution:
Invest in Germany Magazine is jointly distrib-
uted in North America and Asia by the Finan-
cial Times Group with its “FDI Magazine” and
solely distributed by the publisher in the rest
of the world.
No reprints may be made without the prior
consent of the editors. They reserve the
right to publish or shorten readers’ letters.
The publication is based on information
accessible to the public which the editors
consider to be reliable. However, they assume
no liability for the accuracy of such informa-
tion. Articles published under specific names
do not necessarily reflect the opinion of the
editors.
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Major Investment
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One of the single biggest investments in
Germany is currently being made in Leu-
na, a chemical-manufacturing location
in Saxony-Anhalt. Ireland’s Quinn Group
is building a new factory for €260 million
in order to produce special synthetic
materials starting in 2009. This is also
the group’s first venture into the chemi-
cal business. The company decided it
should be a German-Japanese-Irish co-
operative effort, with the technology
coming from East Asia, the experience
for building and operating the new fac-
tory from Germany, and the company
management and financial resources
from Ireland.
Quinn had been planning to move into the
chemical business for a long time. To be-
gin with, the group bought the license to
a process for the production of methy-
methacrylate (MMA) from a Japanese
company. MMA is a light-transmissive,
synthetic material used in the production
of plastic glasses and foil. “The applied
process is very cost-effective and envi-
ronment-friendly,” says Dermot Carey,
head of Quinn Chemicals in Leuna. The
planned initial production volume of
100,000 tons will mostly be delivered to
Quinn’s existing plastic factories all over
Europe. “It is part of our philosophy to
open new business areas, which are ex-
tensions of existing fields, with new
technologies and products,” Carey adds.
This is the formula for success of Sean
Quinn, founder and owner of the compa-
ny and today one of the richest men in
Europe. In 1973, Quinn started out in the
sand and gravel business. Shortly there-
after, he built new cement factories in
the vicinity of his hometown Derrylin in
Northern Ireland. Thanks to Ireland’s
economic boom in the ’90s, the Quinn
Group grew fast. Glass factories, syn-
thetic material businesses, and heating
appliance production utilities were add-
ed all over Europe. In the meantime, the
family business also made a name for
itself as a financial services provider and
operator of hotels and shopping centers.
According to the group, it now employs
more than 6,000 people.
One of Quinn’s mottos is: “It’s better to
make 10 decisions in a day – of which two
are wrong – than no decision at all.” Ac-
cording to Carey, however, the move into
the chemical business is one of the big-
gest and most important investments
the group has recently made. Owing to
its importance, a number of locations
were considered in Europe. Leuna, with
its rich tradition of chemical production,
convinced the Irish. “Here we found the
skilled employees who were able to build
a new factory with an applied manufac-
turing process not yet used in Europe,”
Carey said about his employees, whom
he affectionately calls his “gray-haired
engineers.” It is one thing to design a
factory on paper, but a lot of experience
is needed to properly align all the pro-
cesses in the facility.
For that reason, one-third of the work-
force will be sent to Japan for a few
weeks in order to familiarize itself with
the processes at an existing production
facility.
Quinn will be linked to the central supply
of electricity, steam, and water used by
the nearly 100 firms – including Linde,
Dow, and BASF – located in Leuna’s
1,300-hectare chemical production area.
Carey sees this as another positive point.
“Our production costs must be competi-
tive,” he says. The markets in Western
and Eastern Europe must be supplied
from Leuna. More investment in the
business location and, for example, in
the processing of synthetic materials
has already been included in the current
plans. By operating fast in the market,
the Irish family business wants to re-
main on the road to success – and with
its chemical business too.
www.infraleuna.de
Irish Investment with Japanese Technology in Germany
4 Invest in Germany Magazine
Welcome Address
Invitation to a Top Location
Statements from the Members of the
New Supervisory Board of INVEST IN GERMANY
Chairman of the Supervisory Board:
Michael Glos, Federal Minister of Economics
and Technology
Germany is once again a major world leader in business! Our location in the heart of Europe combined with our stable political conditions, highly qualified workforce, and legendary innova-tive spirit make Germany the first choice for every international investor.
Prof. Frieder Mayer-Krahmer, State Secretary at
the Federal Ministry of Education and Research
Today’s global businesses seek to locate close to research institutes and institutions of higher educa-tion as these locations provide both highly qualified partners for new developments and creative minds. With its Internationalization Strategy, the Federal Government therefore wants to make Germany one of the most attractive and efficient locations for international research investment and research services.
Deputy Chairman of the Supervisory Board:
Wolfgang Tiefensee, Federal Minister of
Transport, Building and Urban Affairs;
Commissioner for the New Federal States
Excellent education, stellar produc-tivity, outstanding infrastructure, and a high quality of life are just some of the many reasons to make an investment in Germany. Additionally, there are numerous possibilities for incentives, espe-cially for investments in eastern Germany. In this region, there are attractive opportunities to be found in innovative and future-oriented sectors, such as renewable energies.
Georg Boomgaarden, State Secretary in the
Federal Foreign Office
Germany is the industrial nation located in the geographic center of Europe with an outstanding infrastructure, high education level, and excellent quality of life. Germany’s reliability and high level of competitiveness in future technologies make it one of the most attractive investment and innovation locations in the world. These are our strengths, as communicated to potential investors all over the world by INVEST IN GERMANY in close cooperation with the Ministry of Foreign Affairs and its foreign representatives.
Deputy Chairman of the Supervisory Board:
Dr. Heinrich v. Pierer,
Chairman of German Chancellor Merkel’s
Council for Innovation and Growth
Germany, with its proven ability to innovate and its determined drive for excellence, offers unique opportunities today to shape the future.
Dr. Reiner Haseloff, Minister of Economics and
Labor of Saxony-Anhalt
As a business location, Germany offers prime conditions to inves-tors. Entrepreneurs from here and abroad appreciate above all the excellent location in the heart of Europe and the well-developed infrastructure – which enables ideal access to markets and suppli-ers all over the world – the highly qualified work force as well as innovative research fields, which lay the foundation for close cooperation between business and research. The excellent quality of life, with its high standards of health care and education, the high level of arts and culture, and the scenic landscape complete the factors that make Germany a good economic location and a country where you can live a good life.
5
Welcome Address
which is underlined by the high level of German investment in and exports to these countries. As a business location, Germany is known for its extremely well-educated people, high level of competitiveness, strong commit-ment to technology and innova-tion, and highly productive industrial and service sectors.
Prof. Dr. Siegfried Englert, State Secretary,
Ministry for Economic Affairs, Transportation,
Agriculture and Viniculture of Rheinland-
Pfalz
Thanks to its central location in Europe and its outstanding infrastructure, Germany attracts companies large and small. The labor pool, excellently trained in technology, natural sciences, and medicine, supplies the prerequi-sites for entrepreneurial success in all endeavors.
Prof. Gerhard Schulmeyer, Former CEO,
Siemens Corporation USA
For American companies, Germany remains a leading investment location. Companies are using Germany’s excellent infrastructure and outstanding R&D capacities to access the European continent and establish worldwide centers of expertise.
Christa Thoben, Minister of Economics and
Energy of North Rhine-Westphalia
Companies wanting to invest in Germany will find the most important commodity for a sustainable business location here: creativity. All over the world, “Made in Germany” stands for highly innovative products con-ceived and manufactured by creative minds. Here you will find the ideal envi-ronment – a creative economy – which takes its energy from the triad of talent, technology, and tolerance. In the future, we also want to campaign interna-tionally with this new concept of the creative economy for North Rhine-Westphalia and the creative minds of tomorrow.
Dr. Michael Militzer,
CEO of MITEC Automotive AG
As a business location, Germany is innovative, internationally com-petitive, environmentally oriented, and uses its central geographical position in the EU to be the door to Eastern Europe from the heart of Europe.
Dr. Klaus Mangold, Executive Advisor to the
Chairman, Daimler Chrysler Bank AG
The German market is the biggest in the European economy and offers perfect access to Central and Eastern Europe and to other western European countries, a fact
Dr. Hubertus Erlen, Deputy Chairman of the
Supervisory Board of Bayer Schering Pharma AG
Investing in Germany provides access to a very attractive market and takes advantage of the highly skilled and efficient workforce in Germany.
Prof. Dieter Stolte, Editor,
Axel Springer AG
Good news about Germany as a location for doing business – there is plenty of it! The challenge is making sure people know about it. INVEST IN GERMANY has the responsibility of communicating Germany’s good performance to the world and making sure that this information is being received.
Werner Sülzer, Chairman of the Supervisory
Board of NCR GmbH
Germany is a country that creates innovative solutions from ideas. Thanks to their quality and lasting benefits, these innovations are valued worldwide. As a result, we have become the world’s export champion – a title that can only spur us on to further innovations. A well-educated workforce, rising labor productivity, a high level of automation, internationally compe-titive corporate taxation rates, and a world-class infrastructure all guarantee that Germany will remain an attractive and dynamic location for investment.
6 Invest in Germany Magazine
Mechanical Engineering: Germany’s Industrial Backbone
From precision tools to production lines, from robots to power plants, Germany
supplies the mechanical engineering products that drive the wheels of global
commerce. All around the world, wherever there’s a mission-critical mechanical
task to be performed, demand for German engineering is growing.
From Beijing to Bangalore, from Boston
to Buenos Aires, the key components of
industrial commerce are being supplied
by German companies. These firms –
nearly 6,000 in all – design and build the
manufacturing systems that factories
rely on for round-the-clock production.
They furnish the essential valves, tur-
bines, and fittings that assure a continu-
ous flow of utilities to the world’s popula-
tion centers. They make the motors,
transmissions, and hydraulics that allow
us to harvest the earth’s resources and
erect tall buildings. In short, German
firms provide the machinery and equip-
ment that keep the world working.
Yes, Germany does export more mechan-
ical engineering products than any other
country, including the United States and
Japan (the second and third biggest ex-
porters in the sector). According to the
German Engineering Federation (VDMA),
foreign sales of German-made machin-
ery and equipment in 2006 amounted to
€123 billion. These exports accounted for
nearly 20 percent of all global trade in the
sector. Altogether, factoring in domestic
sales, German-based machinery and
equipment manufacturers sold €167 bil-
lion worth of products in 2006. That’s
equivalent to the gross domestic product
of Portugal.
Unlike other cyclical industries that have
been buffeted by market fluctuations over
the past few years, Germany’s mechani-
cal engineering sector has been growing
by leaps and bounds. Between 2004 and
2007, production increased by a total of
about 30 percent. This expansion drive is
expected to continue in the current year,
with the VDMA predicting a 5 percent in-
crease in sales. Assuming 2008 fulfills
expectations, that will make for five con-
secutive years of growth.
2007 was an especially productive year
for the German mechanical engineering
sector. The VDMA is expecting to record
for the period an 11 percent sales in-
crease. Despite the effects of the weak
dollar, demand for certain types of prod-
ucts, such as machine tools, has risen
dramatically. During the first nine months
of 2007, foreign orders for German ma-
chine tools increased 29 percent. Domes-
tic demand in this product segment was
even stronger, with the order volume
leaping a full 35 percent. Ph
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The new, bright annealing line of ThyssenKrupp Mexinox, a subsidiary of ThyssenKrupp Stainless AG
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Cover Story
CAD (Computer Aided Design) models can be edited using the "Cyberstilo" tool virtually
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Many German companies are now work-
ing extremely hard to fill their customers’
orders. Some of these companies already
have enough contracts on their books to
keep them busy for the rest of 2008. In an
effort to keep up with growing demand, in
2007, German machinery and equipment
manufacturers added about 50,000 new
employees to their workforce. This year,
staff levels are expected to rise by a fur-
ther 15,000.
It’s hard to overstate the significance of
Germany’s mechanical engineering in-
dustry, both domestically and interna-
tionally. In terms of employment, it pro-
vides more jobs than any other manu-
facturing sector in Germany, where
873,000 people are employed in making
machinery and equipment. That’s more
jobs than in Germany’s electrical engi-
neering and electronics industries com-
bined.
With regards to manufacturing sector
output, mechanical engineering is sec-
ond only to Germany’s mighty automotive
industry. Together, these structurally in-
dependent but related industries repre-
sent the twin engines of the German in-
dustrial economy.
So, what makes German machinery and
equipment manufacturers so remarkably
successful? One answer is found in the
results of a study published last Novem-
ber by the Fraunhofer Institute for Systems
and Innovation Research. Announcing its
findings, the Karlsruhe-based institute
observed that “German mechanical engi-
neering is the best in the world thanks
primarily to its ability to develop custom-
er-specific production facilities meeting
the highest requirements for quality, pre-
cision, and flexibility.” The institute also
found that German companies in this field
display an extraordinary degree of client-
oriented adaptability, which they use to
propagate a culture of continuous innova-
tion.
The study concludes that the key compo-
nent in the success of these companies is
not their R&D expenditure, which is actu-
ally relatively modest. Instead, the deci-
sive factor is their ability to “link their re-
search and development resources in a
special manner with the use of new prod-
uct development concepts.” Specifically,
says the institute, German machinery and
equipment suppliers are making the most
of “simultaneous engineering, virtual re-
ality, and cooperative development.”
Virtual product development and simula-
tion are being utilized in 58 percent of
German mechanical engineering firms,
far more than in other manufacturing
sectors. And more than half of all Ger-
man firms in the industry are collaborat-
ing with external research facilities.
The essential role that innovation plays in
the success of Germany’s mechanical en-
gineering sector is underscored by an-
other recent report about the industry
published by Deutsche Bank Research
(dbresearch). The report notes that, by
2005, nearly a third of all revenues from
German companies in the sector were
being generated by new products. The va-
riety of those products, says dbresearch,
is “unparalleled anywhere in the world.”
It is now estimated that half of all me-
chanical engineering products from Ger-
man companies are made to order.
All these products, of course, are de-
signed by people in Germany – teams of
engineers whom dbresearch describes as
the industry’s “guarantors” of success:
“In Germany today,” says the report, “the
cosmopolitan elites of the engineering
world work hand-in-hand with well-
trained, skilled personnel to ensure glob-
al technological leadership.” The indus-
try’s rapid expansion, the report notes, is
also reflected on the personnel side, with
the number of mechanical engineers in
Germany doubling during each of the last
two 10-year periods.
With 70 percent of German-made ma-
chinery and equipment being shipped
abroad, this national champion of an in-
dustry is having a global impact. In much
of the world, German engineering has at-
tained a benchmark status, representing
the competitive standard for industrial-
based economic development. An in-
creasing number of countries are now
depending on German-made machinery
and equipment to drive their own indus-
trial advancement. Viewing mechanical
engineering as a “backbone” technology,
equipment and machinery buyers are in-
sisting on German quality standards.
Many, having experimented with alterna-
tives, are realizing that the only reliable
source for that quality is Germany itself.
This also explains why some German en-
gineering companies that moved produc-
tion to low-cost countries are now re-
turning home. After a year or two of
operating in those alternative locations,
these firms discovered they simply could
not produce the quality there that their
customers demanded. As dbresearch
points out: “The main strengths of Ger-
man engineering companies thus lie in
non-price competition factors.”
When quality, reliability, and innovation
are the critical factors in a market – as
they are with mechanical engineering –
moving production abroad to save on
nominal labor costs makes little sense.
dbresearch is forecasting that, between
now and 2015, German machinery ex-
ports to China, India, and Russia will grow
by 7 percent to 12 percent each year. Giv-
en those kinds of numbers, it is under-
standable why the business magazine
Wirtschaftswoche predicts that the de-
cade ahead could become the “golden age
of German mechanical engineering.”
For more information about this industry,
please contact Mr. Richard Offermann,
8 Invest in Germany Magazine
Cover Story
Robotics and Automation: Smart Machines
The past two years have brought signifi-
cant gains for German robotics and auto-
mation companies. From 2005 to 2006,
sales rose 6 percent to €7.3 billion. That
accounts for about 4.5 percent of total
sales volume in the German mechanical
engineering industry as a whole. For
2007, the German Engineering Federa-
tion (VDMA) estimated that sales of Ger-
man-made robotics and automation tech-
nology would reach €7.9 billion, an
increase of 8 percent.
Over 60 percent of sales in this sub-sec-
tor are generated by handling and as-
sembly products, followed by robots (23
percent) and industrial imaging – or “ma-
chine vision” – technology (15 percent).
The largest export markets for German
handling and assembly equipment are
the United States, France, Italy, and Chi-
na.
Among the most prominent trends in the
German robotics and automation sector
is the broadening of the customer base
beyond the automotive industry. The
VDMA cited this development as the chief
factor responsible for sales growth in
2006 within the German robotics sector.
Particularly noteworthy was the in-
creased demand for robots from the met-
alworking, furniture, and plastics indus-
tries. Some 48 percent of all sales by
German robot suppliers in 2006 went to
buyers from outside the automotive sec-
tor.
The fastest growing product segment for
German robotics and automation compa-
nies in 2006 was machine vision technol-
ogy. This small but important segment
recorded a 9 percent sales increase
across the board. Most of that growth
was generated by a surge in demand for
“configurable” systems, which can be
adapted to support changing production
needs. Sales of such systems – which in-
tegrate cameras, computers, and soft-
ware – jumped a full 45 percent.
Aside from its role as a supplier of top-
notch robotics and automation products
to the world, Germany itself also repre-
sents a huge market for such products.
The country’s share of all industrial ro-
bots installed in Europe in 2006 amounted
to 36 percent. Altogether, nearly 130,000
industrial robots are currently operating
in Germany, more than in any other coun-
try except Japan.
Looking to the future, German engineers
and researchers are actively shaping the
industry’s development through a series
of collaborative ventures with interna-
tional partners. One of these promising
projects was unveiled last October at the
newly founded Research Institute for
Cognition and Robotics (CoR-Lab) at the
University of Bielefeld. In cooperation
with the Japanese technology company
Honda, CoR-Lab has become Europe‘s
first university-based institution to utilize
Honda’s state-of-the-art ASIMO human-
oid robot as a research platform. The in-
stitute is focusing its research on artifi-
cial perception and neurological motion
control systems.
The CoR-Lab institute and dozens of oth-
ers like it around Germany are being sup-
ported with generous public funding.
Federal and state authorities in Germany
are pouring millions of euros into re-
search and development aimed at spawn-
ing viable industrial ventures.
For more information about this industry,
please contact Mr. Richard Offermann,
One of the most exciting branches
of Germany’s mechanical engineering
industry is robotics and automation.
Encompassing a broad range of
sophisticated products, this industrial
sub-sector represents the cutting edge
of technological development.
German firms working in this field have
been utilizing the country’s advanced
research and development resources
to come up with new applications
for markets clear across the econom-
ic spectrum, from the automotive
sector to medicine.
A star of the “Humanoide League”
of the “RoboCup German Open”
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9
Success Story
Chinese Capital Meets German Tradition
Back into the black
One of Germany’s oldest producers of sewing machines, Dürkopp Adler AG,
and China’s Shang-Gong Group (SGSB) are aiming to sew up the market with
environmentally friendly industrial sewing and production technologies.
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The companies joined forces three years
ago, when SGSB bought out the 150-year-
old German manufacturing firm that spe-
cializes in industrial sewing machines.
Since the takeover, little has changed in
management and production at the Biele-
feld-based company. In fact, rather than
being shut down, SGSB has brought its
acquisition’s finances back into the black
and now plans to take its subsidiary’s
earnings to new heights. The road out of
the red began when SGSB, China‘s oldest
manufacturer of industrial sewing ma-
chines, started making major injections
of funds into technological innovation at
Dürkopp Adler.
That investment is now paying off.
Dürkopp Adler recently began working in a
field for which Germany is well-known –
environmentally friendly technologies. At
the end of last year, it introduced its new
“green line” brand label.
“The green line label is more than just a
logo,” the company said in a statement.
“It is a symbol for environmental protec-
tion and safeguarding resources in the
sewing machine trade.” The statement
adds that the new machines use automa-
tion to conserve energy and other re-
sources. The company also says that it
continuously optimizes the production
techniques it uses in order to make the
production of sewing machines more en-
vironmentally friendly as well.
According to Alfred Wadle, spokesman
for Dürkopp Adler’s management board,
the company has high aims. “Within one
year,” Wadle says, “Dürkopp Adler will
strengthen its leading position in the
sewing machine trade even more.”
The Dürkopp Adler facility in Bielefeld is
a focal point of SGSB’s research and
development. Tests are currently being
devised to determine how much energy
the company‘s machines consume. Engi-
neers at the plant say they hope their
testing methods will become an industry
standard.
A Chinese member of Dürkopp Adler’s
board, Zheng Ying, said, that by becoming
the majority stockholder, the Chinese
company gained Dürkopp Adler’s brand
advantage and development capabilities.
With the reputable Dürkopp Adler name
and German technology the Chinese
group could enter a new market segment
as well.
Dürkopp Adler’s future target customers
are located far beyond western markets.
The company’s designers say they are us-
ing more than a decade’s worth of experi-
ence in operating according to environ-
mental guidelines so as to make their
products attractive to customers in
emerging economies. “We did not have to
reinvent environmental protection,” Wa-
dle says.
SGSB’s familiarity with the Asian market
is proving vital in shaping its subsidiary’s
strategy. The German company says that,
as the costs of resources rise, concerns
about conservation and consumption are
becoming increasingly important in Asia.
“In China, energy efficiency is of the ut-
most importance,” Wadle says. “More
and more enterprises make their pur-
chasing decisions based on this factor.”
Moreover, as one manager at Dürkopp
Adler explains, “Our customers on the
Asian market demand sewing machines
characterized by trouble-free functioning
as well as low energy consumption. So
we’ve developed our Class 281 machine,
which meets all customer requirements
at an attractive price.“
Dürkopp Adler’s trade fair exhibition
schedule shows that Asia is the target
market for the company that is financially
backed by SGSB in Shanghai. Adler ma-
chines have been featured at the Garment
Technology Expo in New Delhi, India. Oth-
er expositions where they are scheduled
to be shown in 2008 include: the India In-
ternational Leather Fair in Chennai, India;
the International Textile and Clothing In-
dustry Fair in Dongguan, China; and JIAM,
the Japan International Apparel Machin-
ery Trade Show, in Singapore.
10 Invest in Germany Magazine
Environmental and energy concerns have been
fuelling the search for new materials
Industry Report: Cleantech
Fighting Half a Trillion Plastic Bags
Searching for new alternatives
European Thermoplastic
Consumption 2006
Germany
21%
Italy
17%
France
11%Great Britain
11%
Benelux
9%
Spain
9%
Skandinavia
5%
Rest of Europe
7%
Rest of
Eastern Europe
7%Poland
5%
(total: 40 million t)
Ph
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Half a trillion. That’s the total global out-
put of plastic bags every year. Not only do
they cause extensive environmental dam-
age, but steep rises in the price of oil and
polymers are making them more and
more expensive to produce. So, it’s no
wonder that companies and governments
are desperately searching for new alter-
natives. One of them is bioplastics.
Of course, bioplastics aren’t just about
plastic bags. Catering products, garden-
ing tools, and medical and automotive ap-
plications offer the largest potential mar-
kets apart from packaging. Bioplastics
can be identified by the “compostability
logo,” the European standard that certi-
fies that the material is biodegradable.
The global demand for biodegradable
plastics is estimated at between 110,000
and 120,000 metric tons per year. Indus-
try analysts expect the market to grow by
as much as 30 percent over the next two
years.
A huge potential for organic growth
Although only 0.1 percent of plastic pack-
aging in Germany is currently bio-based,
the annual substitution potential for bio-
plastics is estimated at about 500,000
tons, and the sector is currently enjoying
double-digit growth. One successful niche
area is water-vapor-permeable bioplas-
tic trays and films for packaging organic
fruits and vegetables. The organic food
market has grown 125 percent since
2000, and its total volume reached €4.5
billion in 2006. Research shows that over
three-quarters of consumers will pay
more for organic food, and, by implica-
tion, for sustainable packaging, too. Sev-
eral major supermarket chains – includ-
ing Aldi, Rewe, and Plus – have been
testing biopackaging in some of their
stores.
Germany is Europe’s largest plastics
market for both thermoplastics and over-
all packaging production. In particular,
the country’s booming organic foods sec-
tor and growing consumer demand for
environment-friendly packaging have
been key growth factors. These factors,
combined with the fact that there are rel-
atively few established producers of bio-
plastics, give new entrants to the market
significant first-mover advantages.
Moreover, there is a wide range of regula-
tory, financial, and political support from
both Berlin and Brussels. One particu-
larly important step was the German
government’s decision to exempt bioplas-
tics producers from having to collect
used plastic packages for reuse until
2012, which can generate annual savings
over fossil-based plastics of as much as
€1,500 a ton. Drink containers with a
minimum of 75 percent bioplastic content
are also exempt from the system until
2010, meaning that consumers will not
have to pay the standard, mandatory de-
posit until then.
A concentration of skills and knowl-edge gives Germany the cutting edge
Two other significant advantages Germa-
ny enjoys are a well-trained workforce
and an extensive research landscape.
Germany combines the advantages of a
highly industrialized country with com-
petitive production locations. There are
more than 50 chairs in renewable ener-
gies at universities in Germany in addition
to leading institutes for polymer design,
production processes, and energy crops.
Public funding is also available for R&D
and to encourage the formation of indus-
try-specific regional clusters. One exam-
ple of this approach known as “BIO-PRO
Baden-Württemberg” involves 54 com-
panies and 34 research institutes.
The German Association for Plastics
Packaging and Films (Industrievereini-
gung Kunststoffverpackungen, or IK) be-
lieves that biodegradable plastics will
still be used alongside traditional, fossil-
based plastics for the foreseeable future.
Moreover, the European Technology Plat-
form recently designated bio-based ma-
terials as a “lead market.”
For more information about this industry
please contact Mr. Raphaël Winkler,
11
Perpetuum Mobilae
Industry Report: Cleantech
Biofuels could be the key to clean, sustainable mobility
Soaring oil prices and widespread con-
cern about the environmental effects of
fossil fuels have combined with the inexo-
rable growth in road traffic around the
world to make the search for clean, sus-
tainable energy increasingly urgent.
Transportation as a whole is responsible
for 30 percent of energy consumption in
the European Union. Given the automo-
tive sector’s near total dependence on oil
– much of it from politically unstable re-
gions – it is no surprise that the EU and its
member states are now paying a great
deal of attention to biofuels.
Biofuels (also called agrofuels) come as
solids, liquids, or gases and can – at least
in theory – be produced from any biologi-
cal carbon source, although by far the
most common source is photosynthetic
plant matter. So-called “first-generation”
biofuels are made from sugar, starch,
vegetable oil, or animal fats using con-
ventional technology. They include:
biodiesel, which is usually blended with
conventional diesel; alcohols such as
ethanol, which is the most common bio-
fuel worldwide and can be used instead of
gasoline; and biogas or biomethane from
biodegradable energy crops and waste
matter.
“Second-generation” biofuels are derived
from non-food crops, including waste
biomass, wheat stalks, corn, wood, and
special energy or biomass crops. These
include biohydrogen, biomethanol, mixed
alcohols, and Biomass-to-liquid (BtL).
Biofuels are already a reality in Germany.
Over 7 percent (by volume) of all fuel dis-
tributed in Germany in 2007 was biofuel.
Most of that was biodiesel, although bio-
ethanol accounted for about a sixth, and
production capacity for bioethanol is
scheduled to double by 2010. The com-
pany Choren is building the first biomass-
to-liquid production plant with an annual
capacity of 15,000 t in Freiberg. Wide-
spread use of biogas and a growing num-
ber of feed-in projects for biogas with
natural gas quality are laying the founda-
tions for the future use of biomethane in
natural gas cars.
Germany offers optimal start-up conditions for biofuels
The German government is aiming for a
17 percent market share (by energy con-
tent) in biofuels by 2020, or 7 percent
above the EU target. This was given a
boost by last year’s Biofuels Quota Act,
which increased quotas for blending bio-
diesel and bioethanol into diesel and gas-
oline, and the Energy Tax Act, which set
up tax exemptions for second-generation
biofuels, pure biodiesel and E85, and in-
stituted a range of financial penalties for
non-compliance. By the end of 2014, at
least 5 million tons of all distributed fuels
must be biofuels.
With more than 65 institutions – most of
them university-based – carrying out re-
search into fuel technology, Germany is
Europe’s leading R&D location, spending
over €40 million on fuel cell research in
2006, the third-highest amount world-
wide.
Over 7 percent of all fuel distributed in Germany in 2007 was biofuel
The majority of R&D institutions are lo-
cated in the cluster of North Rhine-West-
phalia, and there are also smaller clusters
in Hamburg, Berlin, Hesse, Baden-Würt-
temberg, and Bavaria. Together with a
wide range of public-private partnerships,
they provide a strong, innovative thrust in
this relatively young – but rapidly expand-
ing – field.
Germany’s dynamic biofuels market of-
fers huge potential investment opportu-
nities. The relatively small number of
established players offers significant
first-mover advantages, and generous in-
centives are available. The country’s so-
phisticated transportation and logistical
infrastructures also provide easy access
to the large domestic and European mar-
kets as well as the extensive network of
chemical parks, refineries, and sites with
rail, road, and water access.
In short, biofuels are already making
their mark in Germany and, as the need
for clean and sustainable energy sources
grows in tandem with commercial trans-
portation and private mobility, offer un-
paralleled scope for expansion.
For more information about this industry,
please contact Ms. Karolin Blattmann,
Ph
oto
: F
NR
e.
V. Our events
Meet us at the Clean Moves Event in Hanover,
featuring the entire spectrum of market-
proven, energy-efficient mobility solutions!
Come to our workshop on April 23rd from
10 a.m. till 1:30 p.m. in Hall 27 and learn more
about investment opportunities in clean
mobility in Germany.
(see also program insert in this magazine)
12 Invest in Germany Magazine
Industry Report - Biotechnology
Roaring Red Biotech
Germany is the world’s second largest
market for biopharmaceuticals after the
United States, and there are more com-
panies operating in the biotech and bio-
medical sectors here than in any other
country in Europe. In 2006, over 500 bio-
technology companies and 350 biophar-
maceutical companies generated com-
bined sales of more than €4 billion in
Germany, an increase of 12 percent over
2005. From applied genomics to molecu-
lar medicine and biomedical nanotech-
nology, new products are flooding into the
market.
As the German biotech sector grows in-
creasingly more adept at channeling lab-
oratory research toward the market-
place, sales of biopharmaceuticals in
Germany have boomed. In 2006, sales to-
taled €3.13 billion, accounting for 12 per-
cent of the total German pharmaceuticals
market. Over 30 percent of all drugs with
new active ingredients approved in Ger-
many in that same period came from the
biotech sector, often as the result of ex-
cellent international research coopera-
tion within the industry.
Roughly 80 percent of German biotech
companies work in the medical sector.
The majority of them focus on proteins,
genetics, or cell and tissue cultures, and
nearly a third are actively involved in bio-
process engineering. Companies active
in the sector range from small startups
to huge multinational corporations, such
as Bayer Schering Pharma, Boehringer
Ingelheim, and Merck Serono. The big
companies’ financial clout means that
they play a key role in research and devel-
opment as well as in manufacturing and
marketing. More and more small compa-
nies are entering into commercial part-
nerships to develop technologies and
products.
In all, 2006 saw 48 German biotech com-
panies sign nearly 90 joint agreements, a
66 percent increase over the previous
year. Many of these agreements involve
marketing and operational aspects as
well as R&D, and nearly two-thirds in-
volve licensing agreements in one form
or another. Beacon arrangements such
as the multi-year cooperation agreements
between Morphosys, Novartis, Silence Ther-
apeutics, and Astra Zeneca demonstrate
that the high quality of technologies and
products developed by German biotech
companies is recognized internationally.
The presence of 4SC, MediGene, Mologen,
Geneart, MorphoSys, and Jerini among
Germany’s strongest-performing biotech
companies in 2006 highlights one of the
major strengths of Germany’s biotech-
nology sector: the close ties between
companies, universities, and research in-
stitutes. All of the companies mentioned
above were originally spin-offs from re-
search institutions. Indeed, arrange-
ments of this nature are characteristic of
Germany’s diverse biotech sector and
play an important role in fostering inno-
vation and specialized R&D across the
industry as a whole.
Over 300 universities and almost as many
academic research organizations focus-
ing on medical and life sciences – includ-
ing the German Research Foundation
(DFG) and the four main independent in-
stitutes: the Helmholtz Foundation, the
Fraunhofer Society, the Leibniz Associa-
tion, and the Max Planck Society – play a
vital role in Germany’s scientific land-
scape in addition to carrying out cutting-
edge research in other fields.
Ph
oto
: M
orp
ho
sys
Thus, it should come as no surprise that
– proportionally speaking – the country
produces more Ph.D.s in the natural sci-
ences than either the US or Japan, or that
nearly a third of all worldwide biotech
patent applications filed at the European
Patent Office between 2000 and 2003
came from companies in Germany.
Germany’s biotech landscape also has
some clear regional characteristics, with
the largest biotech clusters being located
around Munich, Berlin, and Heidelberg.
Almost 30 so-called “bioregions,” each
with their own research capabilities, act
as platforms for industrial development
and public private interactions. Cooper-
ating closely in a network that leverages
their individual strengths, these “biore-
gions” also help investors solicit capital
and gain access to a range of federal and
state incentive programs in addition to
those offered by the European Union. Bio-
tech funding from the private sector is
also growing in scale and importance
(see our next article).
For more information about this industry,
please contact Dr. Nicola Henneberg,
or Dr. Tilo Mandry,
Geographical distribution of dedicated
biotechnology companies. The size of
the symbols is proportional to the number
of companies located in the region.
Clusters are shown cumulatively.
Distribution of biotech companies
in Germany
Source:
Biotechnology Company Survey 2006
by biotechnologie.de
13
venture capital
IPOs
capital increase via the stock exchange
public subsidies
State and Venture Capital Financing
for German Biotech in Millions/Euro
Ph
oto
: w
ww
.tu
ink
ran
t.co
m
State and Venture Capital Financing for German Biotech
Source: biotechnologie.de, transkript; 2006
Biotechnology is a very young business
sector, and so are most of the companies
in it. To begin a startup is expensive, and
it takes time to turn an idea into a prod-
uct. For that reason, readily available
long-term financing – either from the
public or private sectors – is vitally im-
portant. This is why the German govern-
ment supports young firms to cover the
costs of suitable premises, high-tech
equipment, highly qualified personnel,
and long development and trial phases
for products. This makes ongoing opera-
tions possible despite low initial returns
for sales.
Grants from Germany’s Federal Ministry
for Education and Research (BMBF) and
other public sources have accounted for
about 10 percent of total biotech financing
in Germany until recently, and more than
a third of the companies in the sector
have taken advantage of these funding
sources. With Berlin’s avowed aim to turn
Germany into “the most research-friend-
ly nation in the world by 2020,” there will
most likely be a dramatic increase in such
funding. For example, the BMBF alone
will have allotted €430 million to various
biotech-related initiatives and an addi-
tional €800 million to health research in
the period between 2006 and 2009.
Additionally, private investment in the
German biotech industry has also seen
significant growth over the last few years.
Many companies have been able to se-
cure venture capital financing from pri-
vate sources, which provided approxi-
mately €365 million in biotech financing
in 2006. In fact, Germany currently at-
tracts 40 percent of all biotech venture
capital in Europe.
A number of big names in German busi-
ness have now entered the fray. SAP co-
founder Dietmar Hopp has invested more
than €250 million in biotechnology com-
panies, including €40 million in Immatics
and €20 million in Cytonet. Roland Oetker,
another private investor, holds a 13 per-
cent stake in Evotec and another five per-
cent in GPC. A third major player, Santo
Holding – set up by Thomas and Andreas
Strüngmann, who are also the founders
of Hexal (now part of Novartis) – has re-
cently closed a €15.6 million deal with
MediGene and invested nearly €17 million
in 4SC, as well as putting a total of €37.2
million into GANYMED Pharmaceuticals.
While the larger international companies
might be able to afford to finance their
projects by themselves, smaller biotech-
nology companies still need solid and
flexible financing if they are to succeed in
getting their innovative ideas out of the
laboratory and into the market place, let
alone move into the black. This is why the
healthy mix of government grants and
private capital remain vitally important
for their existence and, on the other hand,
why an investment into a promising Ger-
man biotech company or project often
turns out to be a lucrative deal for the
investor.
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56
14 Invest in Germany Magazine
Chemical Industry Powers Innovation
The German chemical industry is the most important supplier of innovative materi-
als to industry. Foreign companies manufacturing and researching in Germany
are playing an increasingly larger role as suppliers of innovative materials.
Ph
oto
: T
ico
na
Sit
e K
els
terb
ach
The chemical industry is playing a lead-
ing role in German innovation. It is by far
the most important supplier of new mate-
rials to industry. Nine percent of all R&D
expenditure in Germany is in the chemi-
cal industry and, in 2006 alone, this figure
reached €4.5 billion. Four out of five
chemical companies managed to bring at
least one new product to the market with-
in three years. “The chemical industry has
the second-highest ratio of innovative
companies after the pharmaceutical sec-
tor,” says Christian Rammer from the Cen-
ter for European Economic Research (ZEW).
The chemical sector is also the driving
force behind many new products in other
sectors. About 10 percent of the overall
industry demand for material and inter-
mediary products emanates from the
chemical sector. The strong position in
research can mostly be attributed to the
support of the large, tradition-rich com-
panies, such as BASF, which was estab-
lished in 1865 and is the biggest chemical
company in the world today. The pharma-
ceutical and chemical company Bayer
was established in 1863. The blossoming
of the chemical industry with the produc-
tion of coloring agents, fertilizer, and
plant protective agents occurred hand in
hand with the growth in knowledge and
the rise in the number of graduates work-
ing in the chemical industry. To date, no
fewer than 29 German researchers have
received the Nobel Prize for chemistry.
The most recent one was awarded last
year to chemical engineer Gerhard Ertl
for his work on surface chemicals.
Moreover, there has traditionally been a
close relationship between companies
and universities. “The strength in re-
search is the main reason why Germany
is the leading location in Europe today,
both for basic chemistry with raw materi-
als and for special chemistry,” Rammer
says. This position was strengthened in
the recent years with an enormous in-
crease in efficiency. Between 1991 and
2006, the turnover per employee rose
from €148,700 to €372,000 per year. But
this doubling came at a price, as the num-
ber of employees dropped in the same
period from 716,700 to 436,000.
The big German chemical companies
compete on the international stage and
continue to make investments abroad. On
the other hand, many foreign chemical
companies have discovered Germany as a
place to locate company assets for both
production and research. In fact, re-
search has seen considerable growth
and, in 2004, chemical companies with
majority foreign ownership were respon-
sible for 15 percent of all chemistry
research expenditure in Germany. (1997:
6 percent). The companies behind this
phenomenal growth are Dow Chemical,
3M, Akzo Nobel, and Celanese, to name
just a few.
Dow made the single biggest investment in
the “Chemical Triangle” of Halle-Leipzig-
Bitterfeld since German reunification. “To-
day, the plants at the center of Germany are
among the safest, most modern, and most
efficient in the entire Dow network,” says
Markus Wildi, president of Dow Europe.
“Dow’s track record of success in Ger-
many can be attributed to a number of
factors. The highly qualified, motivated,
and innovative German workforce is our
most important asset,” says Wildi. With a
turnover of more than €4 billion, Germa-
ny is Dow’s second most important pro-
duction location after the USA.
Another successful settlement is the
young chemical company Dyneon, estab-
lished in 1996 in Burgkirchen (Bavaria).
The company, which specializes in fluor-
polymers, grew out of a cooperation be-
tween the German company Hoechst and
the American company 3M. Since 1999,
Dyneon has been fully owned by 3M. “It
was our German parent that gave us the
technological strength needed to comple-
ment our American marketing skills,”
says Dyneon managing director Michael
Peters. Dyneon’s firm intention has al-
ways been to use Germany as a “base for
further growth of the business.”
Regular surveys of investors in the chem-
icals industry paint a clear picture of the
strengths of German locations, namely
the infrastructure and services offered in
the chemical parks, the proximity to mar-
kets, well-educated experts, and the re-
search environment. Conditions for pro-
duction are important to companies, but
to a growing extent the conditions for in-
novation are, too, as the most successful
global chemical companies are those
with the most innovative products. Ac-
cording to ZEW, almost half of all German
chemical companies send new and inno-
vative products abroad.
15
Industry Report: Chemical Engineering
The New Alchemy: Turning Corn into Plastic
Many chemical companies in Germany work in close cooperation with research
institutes. At the Fraunhofer Institute in Potsdam work is in progress to create the
synthetic materials of tomorrow.
The shortage of petroleum and natural
gasoline and the associated steep rise in
market prices for fossil raw materials in
recent years have led to new concepts in
plastics production. “One alternative to
petroleum-based plastics is to produce
synthetic materials from renewable re-
sources,” says Dr. Mathias Hahn who is
researching ways to manufacture plastic
bottles from corn at the Fraunhofer Insti-
tute for Applied Polymer Research (IAP)
in Potsdam-Golm.
One IAP research project is to develop
plastics based on polylactic acid (PLA). In
a first step, starch is extracted from corn
and then “broken open” by enzymes. The
lactic acid formed during this process is
then transformed into polyester which is
entirely biodegradable. Products such as
biodegradable garbage bags take advan-
tage of this behaviour and are already
commercially available.
The biodegradability is a characteristic
also of particular interest to the food
packaging industry. “Foodstuff can be
packaged in bio-based plastics foils,”
says Hahn. From a technical point of view,
plastic bottles can already be manufac-
tured from renewable resources such as
PLA. However, before they can be estab-
lished on the market considerable devel-
opment work remains to be done as pro-
duction at present is much more expensive
than for conventional plastics. Nonethe-
less, experts assume that 5 to 10 percent
of the synthetic plastics market will be
replaced by bioplastics within the next 10
years. In order to achieve this goal, the
Fraunhofer researchers equip bioplas-
tics with new attributes and properties in
cooperation with chemical companies.
Dow Wolff Cellulosics Focuses on Research in Germany
Ph
oto
: H
uh
tam
ati
k (
eu
rop
ea
n-b
iop
lasti
cs.o
rg)
“We’re combining the best of two worlds.”
That was the declared goal of the Dow
Chemical Company when it took over Wolff
Walsrode AG, a subsidiary of the pharma-
ceutical company Bayer, a few months
ago. Along with the Dow business unit
Water Soluble Polymers, Dow Wolff Cellu-
losics (DWC) was created to be the world’s
leading company for cellulose derivate.
Unlike previous acquisitions, care was
taken with this merger to link and develop
the strengths in technology and to market
the know-how of all participating parties.
The Walsrode Industrial Park in Bomlitz
in the state of Lower Saxony was chosen
to be the location for the company’s head
office.
But that’s not all. Dow also decided to
concentrate its research and develop-
ment activities in the Walsrode Industrial
Park. As far as DWC Global Manager Mar-
tin Sonntag is concerned, this was a good
decision, as Bomlitz is not only the single
biggest settlement of the new company, it
also has an excellent reputation for its in-
novative strength. For Dow, the skilled em-
ployees and close cooperation between
production, marketing, and research were
the crucial reasons why it chose to locate
its research activities in Bomlitz (with 120
employees).
Cellulose is an important renewable raw
material. “From cellulose we extract
high-quality additives with a sophisticat-
ed production process,” says Sonntag.
The additives are invisible, but even in
small quantities, they play a major role in
many products found in everyday life. For
instance, in building materials such as
ready-mixed mortar, ceramics, and tile
adhesives, cellulose products operate
like small ball bearings, ensuring light,
smooth processing.
In this field, constant innovation is called
for. For example, Dow Wolff Cellulosics
supplied special additives for a tile adhe-
sive with an especially high sticking abil-
ity that were used to tile the bathrooms
and cabins on the luxury ocean liner
Queen Mary 2.
The food production and pharmaceutical
industries are also fast-growing areas
for application. In this case, pill produc-
tion is the best known example. Methyl-
cellulose in tablets ensures that there is
a delay before the active agents are re-
leased. “It is the goal of our research and
development services to develop new
products to the point where they are
ready to go to market,” Sonntag says. To-
ward that goal, the company has many
cooperation partners, including the uni-
versities of Braunschweig and Jena and
the Ecole des Mines in Paris. With its
2,200 employees worldwide and an an-
nual turnover of a several billion dollars,
Dow Wolff Cellulosics is one of the biggest
companies in the sector worldwide. The
company is confident that innovation will
keep it on the growth path in the coming
years.
16 Invest in Germany Magazine
Industry Report: Tourism
Destination Germany
Germany’s tourism industry buzzing
Ph
oto
s:
Be
rlin
Pa
rtn
er/
FT
B-W
eb
efo
tog
rafi
e;
Pre
sse
am
t B
un
de
ssta
dt
Bo
nn
The German National Tourist Board (GNTB)
has a busy year ahead of it. A major part of
the board's 2008 activities will be spent
promoting Germany in the US market. This
year has particular historical relevance, as
the first German immigrants arrived in
the New World in 1608 – exactly 400 years
ago. With some 42 million Americans (or
15 percent of the current population) hav-
ing German roots, the GNTB hopes to en-
tice many Americans to visit the home-
land of their ancestral fathers.
Fortunately for the GNTB, Germany al-
ready enjoys a world-class travel and
tourism environment. According to the
recently published World Economic Fo-
rum’s second annual “Travel & Tourism
Competitiveness Report 2008”, Germany
has the third most conducive environ-
ment for travel and tourism industry in
the world (behind Switzerland and Aus-
tria respectively).
This is in no small part due to Germany's
excellent ground and rail transport infra-
structure and a policy culture which ac-
tively promotes and safeguards sustain-
able environmental regulations and high
safety standards. Moreover, Germany
scores better than both Switzerland and
Austria for policy rules and regulation af-
fecting the travel and tourism industry.
No surprise then that Germany already
enjoys an ever-increasing number of for-
eign visitors streaming into the country.
In 2006 alone, US guests accounted for
4.7 million overnight stays in German ho-
tels and lodgings. In the past US tourists
used to visit "must-see" cities like Lon-
don, Paris or Rome. However, in recent
years, Berlin has moved up into third
place. The number of visitors to the Ger-
man capital has virtually exploded and
the trend shows no sign of abating.
It might come as no surprise to learn that
the great majority of visitors are Europe-
an; with statistics showing that 90 per-
cent of the continent’s inhabitants remain
within Europe when travelling abroad.
Germany has emerged as the third most
popular destination for all travelers be-
hind the more traditional tourist spots of
Spain and France. As a cultural destina-
tion, Germany appears to have moved up
into second place in Europe – directly be-
hind France!
Germany also occupies another very im-
portant third place in the tourism ranking
scales. According to the World Economic
Forum’s “Travel & Tourism Competitive-
ness Index” Germany occupies third posi-
tion – behind Switzerland and Austria re-
spectively – for its “regulatory framework,
business environment, and infrastruc-
ture and human, cultural, and natural re-
sources.”
In 2006 – the most recent year for which
statistics are available – Germany set a
new record, with foreign tourists spend-
ing nearly 53 million nights in hotels and
other lodgings. Particularly impressive
was the growth in business trips from
elsewhere in Europe to Germany: with al-
most 10 million hotel overnight stays
making a remarkable 16 percent increase
on 2005 results. This has helped make
Germany the European market leader in
the MICE (“Meetings, Incentives, Confer-
ences and Events”) subsector.
All the signs are that this positive devel-
opment in the German tourist industry
will continue, and that investment in this
sector will continue to reap handsome
dividends. Forecasts predict hotel and
motel revenues reaching $38.9 billion by
2011 (a 16% increase on 2006), with hotel
construction projects (228 projects to be
completed by 2013) reflecting the growth
in both the budget and high-end seg-
ments.
A further indicator is the steadily increas-
ing number of visitors from Eastern Eu-
rope and elsewhere who are spending a
rising proportion of their disposable in-
come on travel to take advantage of the
variety of offerings available in the budget
airline market. As a result, many visitors
plough the costs savings made by flying
budget into better and more expensive
hotel accommodation and the local econ-
omy.
It also pays to invest in the “health tour-
ism” sector. Already today there are a
large and wide variety of treatments be-
ing offered at health, wellness and beauty
treatment hotels across the country as
well as the more than 300 health resorts
and spas dotted across Germany.
As a growing number of guests increas-
ingly require different and diverse ser-
vices – from traditional massage to
Qigong (Chinese energy-movement ther-
apy) – the considerable growth potential
in this blossoming sector remains rela-
tively untapped. Here again, domestic
tourism plays a major role with the de-
mand for health treatment holidays grow-
ing as the German population also grows
older.
For more information about this industry.
please contact Ms. Asha-Maria Sharma,
17
Turning the Silver Society into Gold
“Investment Opportunities in an Aging Society” was the title of Invest in Germany’s
Third Japan-Germany Industry Forum held in Japan at the end of last year.
Japan and Germany share a common
problem. Their societies are aging. How-
ever, what might seem like a serious
challenge at first sight also provides a
golden opportunity for innovative ideas in
a number of industries. With that in mind,
INVEST IN GERMANY’s Third Japan-Ger-
many Industry Forum in Japan focused
on two industries which will have increas-
ing importance to an aging society: robot-
ics and food.
A high divorce rate (51.9 percent in Ger-
many in 2005), growing urbanization (ap-
proaching 90 percent of Germans live in
cities), and an increase in the percentage
of single households (38 percent in Ger-
many in 2007) suggest that more and
more people will depend on external help
in their everyday lives. As a result, older
members of the community will come to
increasingly rely on robots around the
home.
So-called “functional,” “health” and “well-
ness” foods can help slow down the aging
process. In Germany today, more than 20
percent of the population is over 60 years
of age. Statistics show that this will reach
33 percent by 2050, creating a market of
one third of the population potentially in-
terested in new labor-saving machines
and services which can support and im-
prove their quality of life.
The INVEST IN GERMANY event served as
a forum for experts and business people
from both countries to exchange ideas
and explore possible cooperation, devel-
opment and investment opportunities.
More than 300 participants attended the
events held in Tokyo and Osaka.
The keynote address was provided by
House of Representatives member, for-
mer Japanese health and welfare minis-
ter and great friend to Germany, Jiro Ka-
wasaki. During his speech, Mr. Kawasaki
emphasized the timely and significant na-
ture of the forum event subject matter. A
number of leading German and Japanese
industry managers spoke of the new Ger-
man tax regulations and a highly devel-
oped infrastructure which now extends to
the eastern German federal states. Japa-
nese guests were particularly keen to
hear about the improved tax situation, the
new law for limited companies, and the
competitive and hard-working German
workforce. In addition, they also had the
chance to learn about the local offers
from INVEST IN GERMANY’s federal state
partner event organizers. The German
Embassy and Consulates provided fur-
ther support in the guise of their success-
ful networking program.
An executive from Japan’s leading produc-
er of robots for industrial applications,
Yaskawa Electric, presented the compa-
ny’s newest developments and partner-
ship with Takara Tommy, Japan’s leading
toy manufacturer at the “Robotics Work-
shop." He reported that their machines are
able to realize three generation dialogues,
and are, as such, more than just toys.
Fraunhofer IPA, one of Germany’s leading
robotic systems research centers, pre-
sented its new developments in the field
of robotics and welcomed the possibility
of close cooperation with Japanese part-
ners.
At the health foods workshop, INVEST IN
GERMANY highlighted the significant
growth in functional and health foods sales
across Germany as a result of increased
consumer health and wellbeing aware-
ness. Functional food products are widely
considered to be the most important and
dynamic segment of the European food
market, as the functional foods concept is
a relatively new market development with
great potential for further development.
The current major industry segments are
functional dairy products and non-alco-
holic beverages, but the remaining food
categories also provide potential to in-
vestors.
Germany’s aging population continues to
display a rising demand for products de-
signed to boost their physical and mental
energy reserves. This thriving market
holds untold investment and business op-
portunities for foreign companies with
experience in the functional food sector.
Invest in Germany also noted that, despite
the fact that the German food market is
highly competitive, German consumers
are very receptive to new and different
products. This was particularly encour-
aging for those Japanese companies
whose specialty products are not yet
known in the German market.
Individual examples of successful inward
German investment were presented by
Yakult (well-known Japanese functional
food brand leader) and Suntory (one of
the world’s largest beverage companies).
A speaker from the IGV Institute for Ce-
real Processing also pointed to the grow-
ing import of functional foods in the Ger-
man market.
INVEST IN GERMANY’s next Japan-Ger-
many Industry Forum will take place in
Japan later this year with the focus this
time being “cleantech."
Our Events
18 Invest in Germany Magazine
World Leaders in Small Business
Germany might be more famously known
around the world for its car manufactur-
ers, state-of-the-art technology, banking
and insurance conglomerates and chem-
ical giants, but it’s also home to a number
of companies leading the world in small
business sectors.
According to a study of companies with
sales of up to €50 million conducted by
Bernd Venohr, a professor of strategic
management at the Berlin School of Eco-
nomics’ Institute of Management, there
are 1,300 German firms leading their re-
spective sectors. "On top of that, there are
surely another 1,000 micro-world market
leaders in even smaller niches” he said in
an interview with Germany’s Wirtschafts-
Woche (Economy Week) magazine.
Here we take a look at just a few of
Germany’s small business world
leaders.
Glasbau Hahn
(Glass Construction Hahn)
Visit the Louvre in Paris or the Metropoli-
tan Museum of Art in New York and one
thing remains the same – the glass cabi-
nets you’re looking at were most likely
provided by Frankfurt’s Glasbau Hahn.
Glasbau Hahn also enjoyed the rare privi-
lege of being selected by the U.S. National
Park Service to construct a glass cabinet
for President Abraham Lincoln’s Bible.
Founded in 1836 with a staff of 125, the
company is the world leader in its market
as well as manufacturing other glass
products including the bulletproof glass
used in banks.
Dresdener Sportgeräte GmbH
(Dresdener Sport Equipment)
More than 40 nations have bobsled teams
competing for Olympic gold, but only one
company supplies most of the world’s two
and four-man sleds. Germany’s Dresdener
Sportgeräte GmbH.
Around 36 of the world’s 42 teams buy the
“made in Germany” sleds, which can of-
ten cost as much as a midsize car. Once
part of East Germany’s VEB Flugzeug-
werft (VEB Aircraft Works) which supplied
East German teams with closely guarded
state-of-the-art sled, the company fell
upon hard times in the early 1990s. The
company now finds itself firmly back on
track thanks to the efforts of Karola
Brauer and business partner Stephan
Weber who acquired the company in its
lean years and helped steer the business
to its current success.
Groz-Beckert
The Swabian Alb in the southwestern
state of Baden-Württemberg was once a
hotbed for the textile industry in Germany
before the sector fell into decline during
the 1970s. However, some companies were
able to adapt and even flourish. Groz-
Beckert KG is one such survivor. It has
been making precision needles and appli-
cations for machinery, clothing, leather,
shoe and carpet companies across the
whole world. Founded in 1852, Groz-Beck-
ert has 7,000 employees in 150 countries
and annual sales of €480 million – with
only 10 percent of these revenues coming
from the domestic market.
Klepper Faltbootwerft
(Klepper Folding Canoe Works)
For more than 100 years, canoeists
around the world have been using the
“Faltboot” or folding canoe made in Ger-
many. In 1907, an inventor by the name of
Alfred Heurich turned over the business
to a master tailor from Rosenheim named
Johannes Klepper. The boat’s wooden
frame and canvas shell could be taken
apart and stowed away in a backpack. A
century later, Klepper’s company domi-
nates the world with 70 percent market
share.
Adco Umweltdienste
(Adco Environmental Services)
On first glance, it might not seem like the
most glamorous of industries. But Adco
Umweltdienste has proven there are
market share and profits to be won wher-
ever people come together. That’s be-
cause Adco is the world leader in portable
toilets thanks to its Dixi and Toi Toi brands
and operations in 31 countries. It has 56
subsidiaries in places as far flung as the
United States and Hong Kong, Malaysia
and Taiwan with a global workforce of
1,700. The company can look to annual
revenues of around €160 million from its
160,000 portable toilets ranging from its
basic Dixi Klo model right through to lux-
ury container models with marbled walls,
tiled floors and full-length mirrors used
for VIP events.
Pöschl Tabak
(Pöschl Tobacco)
100 years ago there were 20 companies in
the German town of Landshut producing
“Schnupftabak” (snuff tobacco) which is
popular in parts of Germany and ingested
with a powerful snort into the nose. Of
these companies, only one survived – the
Pöschl Tabak Group. The 105 year old
company only relies on snuff tobacco for
12 percent of its annual sales revenue of
€230 million, but it still produces 240
tons of snuff tobacco a year – around one
third of which is exported across the
globe to 80 countries.
Ph
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19
He launched an international trend with a
hip, new fi zzy drink called “Bionade” (pro-
nounced “Bee-oh-NAH-da,” in German).
Bionade CEO Peter Kowalsky, 39, and his
stepfather Dieter Leipold, 70, have cap-
tured the taste buds of Germany, Austria,
and Switzerland with an organic soft
drink brewed the same way as beer – fer-
mented with only natural ingredients and
in accordance with Germany’s strict Rein-
heitsgebot (or “beer purity law”) dating
from 1516. The drink – created after a lot
of late-night tinkering – went on sale in
the Benelux countries, Scandinavia, Italy,
Spain, Portugal, and Ireland in the last two
years, and there are plans for further in-
ternational expansion to the United States,
Britain, and Japan in 2008.
“The big question when we started out
was: Is this a product that anyone will
want to drink?” says Kowalsky, CEO of the
Peter Brauerei, the brewery founded by
his grandfather in the small northern Ba-
varian town of Ostheim in der Rhoen
(population 3,370). “We just didn’t know.
We only knew that we had to come up with
something different and something bet-
ter than what was already on the market,”
he recently told Der Spiegel in an inter-
view. “Our aim was to come up with a
healthy, quality drink with better ingredi-
ents,” he added. "Beer has been falling
out of fashion. And it’s the breweries’ own
fault for squandering the chance to keep
beer socially acceptable.”
After about eight years of experimenting
with the alcohol-free brew and testing
different recipes of the low-sugar, low-
calorie carbonated beverage on family
and friends, Bionade fi nally went into pro-
duction at the failing, 28-employee brew-
ery in 1995. (“Bio” is the German word for
“organic,” and “Limonade” is a generic
term for “soft drink.”) The idea was to
make a drink with an intoxicating taste
that was not intoxicating. With no adver-
tising at fi rst and relying only on word of
mouth, Bionade managed to quickly strike
a chord with health-conscious consum-
ers.
One crucial breakthrough for Bionade
came in the late 1990s, when a bar in
Hamburg – Germany’s second-largest
city and home to many of the country’s
largest publishing companies – started
offering Bionade on its list of drinks.
Some journalists wrote about the new
drink and its unusual selection of fl avors
and colors. And, with the help of a new
marketing campaign started in 1999,
sales have rapidly climbed from 2 million
bottles in 2002 to about 250 million in
2007.
The rest is history. Sold in 0.33-liter bot-
tles and made from malt, water, sugar,
and fruit essences, Bionade comes in
four fl avors: lychee, elderberry, orange-
ginger, and herb. After shunning adver-
tising for a long time, Bionade took the
plunge in 2007 with a modest, initial cam -
paign on bill boards and the radio in 15
German cities.
It picked a slogan that underscored its
motto of being something different: “Bi-
onade. Das offi zielle Getränk einer
besseren Welt” (“Bionade. The offi cial
beverage of a better world”).
Kowalsky says Bionade’s expansion will
continue in 2008. “The next countries are
places like Canada and the United States,”
says the young manager, who studied
brew engineering in Weihenstephan. He
is not worried about the name “Bionade”
being pronounced differently in English-
speaking countries or the possibility that
the meaning of the drink (“organic soft
drink”) gets lost in translation. “Bionade
represents ‘Made in Germany,’” Kowal-
sky says proudly. “Why shouldn’t a prod-
uct like that be able to keep its German
name around the world?”
German Business
A German brewer in rural Bavaria had serious problems with
a crowded market, a mature product, and its poor image.
This is the story of how he not only rescued his
family-owned business but also made it rich.
Ph
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BIO
NA
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The Stunning Rise of a Healthy Drink
20 Invest in Germany Magazine
German Business
Germany Celebrates Its Best Entrepreneurs
Ph
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The winners with the anchorwoman of the event
and the prime minister of Hessen
What do Sixt, Q-Cells, Alnatura and Inter-
hyp all have in common? It goes without
saying that they are all major German
business household names. But they also
share something else in common. They
have all been prizewinners at the annual
“Entrepeneur of the Year” awards first in-
troduced 11 years ago. Each year the
event crowns winners in five different
categories. Since the competition’s in-
ception there have been more than 100
winners, with many previous winners go-
ing on to make a big splash in the German
market.
The main criteria listed by the jury this
year in their search for the top five entre-
preneurs (out of the 350 who entered)
were: the future potential of the company;
its ability to innovate; its entrepreneurial
input; and its employee orientation. Many
attributes and skills are needed to be a
successful entrepreneur. This year’s win-
ners impressed with their staying power.
(See the list of winners in our chart.)
As always, having a good idea was impor-
tant. But, without staying power, the ideas
would have stayed just that – ideas. The
2007 winners had to persist with their
ideas in the face of skepticism, vested in-
terests, competition, and the “newness
factor.” All fought their way through. For
instance, the founders of 360 Treasury
Systems and Vanguard had to convince
hospitals and financial institutions, re-
spectively, that there were different ways
of doing things. In both cases it took a
while for the messages to get through,
but in the end they did.
The “Entrepreneur of the Year” competi-
tion is administered by the accounting
firm Ernst & Young and supported by a
number of companies and publications,
including manager magazin. In a multi-
step process, Ernst & Young and a jury
gradually draw the net closer. In the end,
the five winners are selected from a list of
98 semi-finalists. This list of semi-final-
ists also makes for interesting reading.
When excellent candidates such as Basic
(a bio supermarket chain), Air Berlin (Ger-
many’s second largest airline company
after Lufthansa), Pixelpark (a listed IT and
communications company), and Tipp24
(an innovative online gambling site) are
only “second best,” it’s clear just how
tough competitions of this kind are in
Germany.
Category
Industry
Trade
Services
IT
Startup
Profile of Company
Conergy is a prominent manufacturer in the sun, wind,
and bio-energy sector. With 2,600 employees, the company
had sales of about €1.2 billion in 2006.
Tegut is a supermarket chain with a focus on bio products
and 2006 sales of €1.1 billion.
Vanguard is a recycler of medical products and
service provider for clinics and hospitals with 2006 sales
of €100 million.
Sedo is a world leader in the resale of registered Internet
domains with sales of €41 million in 2006.
The listed company 360 Treasury Systems operates an online
forex trading platform for companies and had 2006 sales
of €3.2 million.
Name, Company
Hans-Martin Rüter (41),
founder and chairman of the board of
Conergy AG
Wolfgang Gutberlet (63),
head of Tegut Gutberlet
Robert Schrödel (49),
founder and chairman of the board of
Vanguard AG
Tim Schumacher (30), Ulrich Preisner (29),
Marius Würzner (31), and Ulrich Essmann
(37), co-managing directors of Sedo GmbH
Carlo Kölzer (35),
founder and chairman of the board of
360 Treasury Systems AG
The Winners of the Competition 2007
21
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La
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rock
Foreign and domestic companies alike are (re-)discovering why it pays
to base businesses in Germany.
The Tides of Offshoring Turn Back to Germany
Germany or, in a sense, reshore. While
abroad, they had to deal not only with ex-
tra costs resulting from language and
cultural differences but also with legal
uncertainty, a lack of worker loyalty, un-
reliable supply chains, and limited logis-
tical opportunities.
…and a Big Boost from the Government
Germany’s government is taking concrete
steps to further these trends. Its “High-
Tech Strategy” will devote €15 billion to
cutting-edge research by 2009. At the
same time, it will boost R&D funding for
small and medium-sized enterprises by
40 percent to over €850 million. And, by
2010, it will dedicate 3 percent of GDP to
R&D. These measures reinforce other
improvements, such as a progressive
dismantling of bureaucracy and red tape
and, as of January 2008, a corporate tax
reform making Germany competitive with
other major European economies. Taken
together, these improvements will en-
hance Germany’s reputation as an excel-
lent place to do business and an ideal set-
ting for companies seeking to maximize
their innovative and economic potential.
Globalization has led many companies to
offshore production. To stay competitive,
several German companies have moved
manufacturing facilities to locations of-
fering lower labor costs. But wages aren’t
the only factor worth considering. In many
industries, wages make up only a small
percentage of overall costs. As more
companies learn the true costs, there has
been a steep decline in offshoring based
solely on labor costs. In fact, several
companies – both foreign and German –
have realized that the real qualities they
need are in Germany. As a result, more
foreign companies are coming to Germa-
ny and the tide of offshoring by German
companies has turned, leading many of
them to bring their businesses back.
Germany’s Unique Investment Landscape
Many foreign companies – particularly
those in knowledge-intensive and high-
tech industries – have based facilities in
Germany in order to exploit advantages
unique to the investment landscape: ex-
pertise in R&D; innovation clusters with
concentrated expertise; and skilled spe-
cialists at numerous research centers
and universities. They also know that
German employees lead Europe in skill
level, productivity, and company loyalty,
and that “Made in Germany” commands
respect worldwide.
Two Stars in the Constellation of Expertise
Germany is especially attractive to the
renewable energies and logistics sec-
tors. With annual turnover of €22.9 bil-
lion, over €6 billion in exports, and nearly
€9 billion in investment volume, Germany
is the place to be for key players in the
renewable energy sector. In July 2007, for
example, the American photovoltaic mod-
ule producer First Solar opened its first
German factory in Brandenburg because,
as the company’s president stressed,
Germany is the world’s largest solar-
power market and leader in related sci-
entific expertise.
Germany is Europe’s top destination for
logistics companies too. DHL, for exam-
ple, relocated its EU hub from Belgium to
Halle-Leipzig. DHL’s decision means that
the attractiveness of the Halle-Leipzig
region has increased not only for logistics
companies but also for companies that
depend on logistics service providers. In
today’s global economy, that means all
businesses.
Re-discovering Germany’s Benefits…
Foreign companies aren’t the only ones
discovering these advantages. Many Ger-
man companies that had offshored pro-
duction have been deciding to return to
Marketing Germany
The Economic Development Agencies
of the Federal States advertise the
advantages of their own regions world-
wide. We asked them to send us the
ads that they think are especially witty
or interesting. See this “best of” selection
on the next four pages.
“Best of” Federal Creativity
Bavarian Ministry of Economic Affairs, Infrastructure, Transport and Technology
Invest in Bavaria Prinzregentenstrasse 28
80538 Munich, Germany
Phone (+49 89) 21 62-26 42
Fax (+49 89) 21 62-28 03
E-Mail [email protected]
Internet www.invest-in-bavaria.com
www.invest-in-bavaria.comInvest in BavariaMax knows where he wants to go: to the top!
For this, Bavaria is the right place to be. Bavaria offers the best opportunities for all, be theysummiteers in the Alps or successful researchers. One of Europe’s best education and trainingsystems might enable Max to co-shape the future of us all, for instance in one the high-tech sectorsin which Bavaria enjoys global leadership. It is no accident that global players such as Siemens,BMW, Audi, MAN or Linde are headquartered in Bavaria. Or Max might some day work for majorinternational high-tech companies of which 1,300 are operating in Bavaria. Perhaps your companyas well, shortly?
If you want Max to contribute to the success of your enterprise, you know where to find him. In Bavaria.
Development BoardBrandenburg Economic
Germany’s numberone Biotech Region
Cluster ofaerospace
Importantchemistry sites
Large assortment ofproperties – just call
High qualityof life
Contact your central partner forpromoting business in Brandenburg:
Brandenburg Economic Development Board (ZukunftsAgentur Brandenburg GmbH)Steinstrasse 104-106, D-14480 Potsdam
Phone: +49 (0)3 31/6 60-30 00, Fax: +49 (0)3 31/6 60-38 40, E-Mail: [email protected]
www.invest-in-brandenburg.com
The perspectives:
Proximity to the growth markets of Central and Eastern EuropeMotivated and highly qualified specialistsThe most favorable labour cost + working time in GermanyOptimal investment subsidies (EU target area 1 + 2)Enterprise networks and competence centresLow municipal taxesHigh quality of life
•••••••
Germany’sCapital Regionis waiting for you
Germany’sCapital Regionis waiting for you
22 Invest in Germany Magazine
Marketing Germany
The Federal State of Bremen is a place for world trade. Needlessto say international trade always requires logistical know-how.Over 1,000 companies with more than 20,000 employees specia-lized in logistics, achieve top performance, and set new standardsin Bremen’s logistic sector everyday.
Within a commodity flow area of 3,158 acres, contacts and relation-ships are established directly. Minolta, DaimlerChrysler, and Tchibo,one of Europe’s leading coffee distributor, are shining examples of successful companies “docked” at Bremen. They share Europe’s biggest high-rise warehouse, run by the BLG Logistics Group.
The transportation turnover is breaking records in Bremerhaven,Bremen’s large port, where one can find specialists for every logisticalassignment imaginable in Europe’s unique Cargo Distribution Center.
Interested in the logistics location Bremen? We are knowledge-able representatives for efficient, individualized economicdevelopment initiatives.
Big Ships Need Big Ports – Excellent Products Need Excellent Locations!Ride the Wave. Come to Bremen.
Dock at Germany’s top logistic Hub
Bremer Investitions-Gesellschaft mbH75 Broad Street, 21st FlNew York, NY 10004
Phone [email protected]
Saxony Economic Development Corp.Bertolt-Brecht-Allee 22 , D - 01309 DresdenPhone +49-351-2138 0 [email protected]/machine
Each generation continues to develop the heritage of its parents. For more
than 175 years, Saxons have been identified with innovation, quality, and
productivity in mechanical engineering throughout the world. Whether it
be machine tools, printing and textile machines, or complete industrial
plants: More than 35,000 employees in about 440 companies are already
working on the next generation. If you also wish to "proliferate", you'll find
the best partners right here in Saxony - guaranteed!
It’s a Saxon!
The metropolitan region of Hamburg with its more than four million inhabitants is one of the European regions to have
gained the most from the fall of the Iron Curtain and from globalisation. Today Hamburg is one of the most dynamic
commercial centres in Northern Europe. Modern services in the logistics, aviation industry, technological and media
sectors have taken their place alongside modern industrial production and traditional trade in shaping Hamburg´s
economy.
Let us talk about your success.
We will open markets for you.
Success with Hamburg Your Partner for Success
Industry-specifi c HWF support is offered in cooperation with:
“Schleswig-Holstein is convincing not only with
world-class music, but also with harmonies in industry.”
23
Marketing Germany
24 Invest in Germany Magazine
In the heart of Europe, at the center of Germany, a strong federal state is growing. Not least due to the support from LEG – the State Development Corporation of Thuringia: In the past years we have successfully based well over 400 companies there. Centrally located and with a first-rate connection to international markets, Thuringiaoffers excellent conditions for making very promising investments.
w w w. i n v e s t - i n - t h u r i n g i a . d e
gwSaarSaarland Economic Promotion Corporation
ATRIUM Haus der WirtschaftsfoerderungFranz-Josef-Roeder Strasse 17D-66119 Saarbruecken, GermanyPhone +49 / 681 / [email protected] invest-in-saarland com
S e a r c h f o ra l o c a t i o n
Marketing Germany
We have a tradition of building
skyscrapers.
Invest in Mecklenburg-Vorpommern GmbH
Schlossgartenallee 15 D - 19061 Schwerin
T: +49/385/59225 - 0 F: +49/385/59225 - 22
[email protected] www.invest-in-mv.de
Room to Grow
Where living and working are fun.
Join Caterpillar, Nestlé, Unilever and
enjoy the benefits of working in a region
where global players spend their holidays.
MV - The Place to Be
“We are developing the future
with the bilingual industrial real estate database of Rheinland-Pfalz.“
“Lower Saxony’s state costume? The lab coat.”
25
26 Invest in Germany Magazine
Innovative Germany
+++++ Innovation News +++++
Ph
oto
s:
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T-Shirts That Glow and Warm
Print your message on a T-shirt? No way!
That’s so 20th century! Well, then, why
not have a T-shirt broadcast your mes-
sage using LEDs or electroluminescent
foils integrated into the fabric, instead?
You say that, even though your factory
floor is cold, workers still have to lie on it
sometimes while performing their tasks?
Instead of halting production so you can
rip the place up and install heaters, how
about having the workers’ uniforms pro-
duce heat?
It might sound a bit like it’s out of the
space-age, but rest assured – it’s a real-
ity. Textile Interfaces, a company based in
Gotha (Thuringia), has been developing
ways to integrate cloth and advanced
technology in ways that use the best of
both worlds. The business is also devel-
oping textile products for its customers
that are exclusively made of recyclable or
renewable materials and are therefore
sustainable.
Possible applications are all over the
map, from glowing logos on shirts to be
worn at trade fairs to rip-proof pockets
and integrated heating on a prototype for
the uniforms of people working in Opel
factories. Philips required textile inter-
faces for the product development of the
Lumalive jacket with integrated pro-
grammable monitors on an LED basis.
These have been marketed for events and
promotions throughout Europe over the
last year.
Textile Interfaces is only a couple years
old, and clearly they’re just beginning to
figure out innovative solutions to meet
their clients’ demands. A company that
shows up at fashion shows and computer
conferences? That’s so 21st century!
Nuts for Oil – a 21st Century African Tale
Jatropha is a shrub with red flowers that
can grow just about anywhere in tropical
countries. It also produces nuts with an
oil content of 40 percent. That fact – along
with the fact that African farmers have
been using the bushes to serve as borders
between different fields – has brought a
stable source of electricity to villages in
Ghana, Mali, and the southern part of the
Tanzanian territory of Tanganyika.
Using a hybrid photovoltaic-and-oil-burn-
ing system, the Cologne-based firm En-
ergiebau Solarstromsysteme GmbH has
partnered up with InWEnt, a development
corporation based in Bonn, to enable vil-
lages to have reliable electricity day in
and day out. During times of low usage,
the photovoltaic solar collectors suffice
to meet energy needs. But when usage
increases, they can be supplemented
by Jatropha-oil-burning generators. The
whole package is so simple that it takes
no specialized knowledge to run. As a re-
sult, the villagers – or, in the case of the
Tanganyikan project, a convent of Vincen-
tian Sisters of Charity in Mbika – can keep
the thing going.
Another advantage of systems using Jat-
ropha oil is that, unlike biodiesel, which
needs processing, Jatropha nuts only
need to be crushed. Once their oil has
drained out, it is ready for immediate use.
As a result of using this system, not only
has productivity and income increased in
the villages in which the system has been
installed, but some farmers, who’ve al-
ready had the Jatropha shrubs around
their fields, are supplementing their in-
comes by gathering and selling the nuts.
Jatropha seeds
27
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Innovative Germany
+++++ Innovation News +++++
Visual Impressions for Blind People
A subretinal chip implant produced by
Retina Implant AG in Reutlingen, Baden-
Württemberg, gives new hope to blind
people suffering from retinitis pigmento-
sa or macular degeneration. The compa-
ny – a spin-off of the University of Tübin-
gen – has just received the 2007 STEP
Award for its fantastic development. The
jury agreed that the development will
soon find success on the market.
Medical experts from the University Eye
Hospital in Tübingen have succeeded in
giving blind people simple visual impres-
sions by implanting chips beneath their
retinas. Seven patients have already re-
ceived the subretinal chips, says Prof.
Eberhart Zrenner, head of the Depart-
ment for Pathophysiology of Vision and
Neuro-Ophthalmology at the University
Eye Hospital of Tübingen. The chip helps
allow people to perceive sources of light
such as lamps and windows. Some of the
patients could even locate bright objects
on a dark surface.
The retina chip takes over the functional-
ities of the rods and cones of photorecep-
tors. The therapy is appropriate for peo-
ple who were able to see at one time as
well as for those whose visual nerves and
related areas of the brain are still work-
ing.
Approximately 130,000 blind individuals
live in Germany and an additional 17,000
people go blind each year. One fourth of
these new cases is caused by a degener-
ative retinal disease.
Among these diseases number retinitis
pigmentosa (RP) and age-related macu-
lar degeneration (AMD), as a result of
which the retina’s photoreceptors cease
to function.
Ophthalmologists are still unable to use
therapeutic drugs or medical products to
help patients who have gone blind as a
result of degenerative retinal diseases.
Retina Implant AG aims to change this sit-
uation. The company defines itself as an
innovative “development and production
company” offering medical products for
visually handicapped and blind patients,
and it aims to be the first company in the
world to market functioning subretinal
implants. The development is based on
the results of a research project in which
numerous university hospitals and re-
search institutes have been participating
since 1996, most of which are located in
Baden-Württemberg.
In close cooperation with their partners
– the University Eye Hospital of Tübingen,
the University Eye Hospital of Regens-
burg, the Natural and Medical Sciences
Institute at the University of Tübingen, the
Institute for Microelectronics Stuttgart,
and the Institute for Physical Electronics
at the University of Stuttgart – Retina Im-
plant AG plans to bring to the market the
first fully functional electronic retinal im-
plant, so as to partially restore vision to
those who have gone blind. This is a great
example of the innovative and application-
oriented research activities in Baden-
Württemberg.
For more information, please contact
Dr. Birgit Spaeth; [email protected]
Injecting CO2 Into the Soil
Greenhouse gases, global warming, au-
tomotive emissions, and the dangers they
all pose to our planet: these are things
very much in the news these days. What’s
pretty much a consensus is that some-
thing has to be done about carbon dioxide
(CO2) the most common gas contributing
to the so-called “greenhouse effect.”
One suggested solution has been to plant
more trees, which transform carbon di-
oxide into oxygen, but there’s just so much
a tree can do and so many places to plant
them. What if you could just grab the CO2
and park it somewhere instead of releas-
ing it into the atmosphere? What if, for
instance, you could repurpose an old East
German natural gas storage facility and
fill it with the carbon dioxide collected
from factory emissions?
Would it work? And would the stored gas
degrade the minerals in the surrounding
site? The European Union has joined up
with Germany’s federal government to in-
vestigate these questions. They’ve also
dedicated a combined €38.7 million to a
pilot project in Ketzin, a village northwest
of Potsdam, which will be coordinated by
the city’s GeoForschungsZentrum. The
project will entail a detailed study of what
happens when 60,000 metric tons of CO2
– the annual output of 40,000 cars – are
injected into a saltwater aquifer some 800
to 850 meters beneath an old gas plant in
Ketzin.
CO2SINK, as the project has been dubbed,
will be an important test. The EU has
pledged to reduce carbon emissions by
30 percent by 2020, and if this project
succeeds, a new and relatively inexpen-
sive method of capturing and storing CO2
will have been found.
28 Invest in Germany Magazine
Germany has had a world-class research and
innovation landscape for decades. The economic weekly
WirtschaftsWoche recently presented the best
ideas to come out of Germany thus far. Read the most
interesting examples below.
120 Years of Liquid Crystals
Over the past few years, liquid crystal
displays (LCDs) have become so ubiqui-
tous that we’ve begun taking them for
granted. Thin, energy-efficient (especially
compared to the previous generation of
television-set-like displays, which were
also incredibly heavy), and capable of
sharp resolution and amazingly accurate
color, LCDs are taking over the comput-
er-monitor and television industries more
and more. In fact, it’s estimated that over
$100 billion will be spent on them in 2008,
up 12 percent from 2007. Germany has
led the way in liquid crystal research
since botanist Friedrich Reinitzer first
detected them in 1888 at the German Uni-
versity of Prague while extracting cho-
lesterol from carrots. Since then, much
research has been done on how heat and
electrical impulses cause crystal com-
pounds to change colors as well as on the
best chemicals to crystallize for these
purposes. LCDs were originally only mo-
nochrome and used in products such as
early digital watches, but they were soon
refined enough for more complex appli-
cations. Today, Merck Chemicals in Darm-
stadt is the leading manufacturer of these
crystal compounds, providing 70 percent
of the world’s supply of liquid crystals
and holding over 2,500 patents, with
around 100 more being added each year.
The Lotus Effect: Self-Cleaning Surfaces
The lotus is a powerful metaphor in Bud-
dhism. It’s a plant that sits atop swampy
water and produces a beautiful flower. It’s
also remarkable – scientists have discov-
ered – in that its leaves are absolutely im-
pervious to dirt. Any impurity that lands
on the leaf will just roll off with the help of
a little water. In 1971, Wilhelm Barthlott,
a professor of botany in Bonn, became
fascinated with this phenomenon. With
the help of a microscope, Professor
Barthlott discovered that the seemingly
smooth upper surface of the lotus leaf
was, in fact, quite rough and had incredi-
bly tiny crystals of wax only nanometers
(that’s billionths of a meter!) wide. By
1994, he’d learned enough about the lo-
tus’s surface to be able to patent a meth-
od of manufacturing similar self-cleaning
surfaces. Since then, dozens of applica-
tions of this technology have been brought
to market; from a spray for automobile
brakes, to tents, awnings, and shades
made out of treated fabrics that repel
dirt. Another innovative spray has been
marketed that gives metal a “lotus ef-
fect,” too. The Buddhists probably knew it
all along: There’s more than one jewel in
the lotus. You just need the time, patience,
and concentration to find it!
“No Fatty” from Germany
Germany, perhaps more than other coun-
tries, has to contend with all number of
dated stereotypes. Many might still con-
sider Germany to be the land of the high
carbohydrate (potatoes, dumplings, beer
and bread), salt and fat (pork, goose and,
of course, sausages) diet, but this couldn't
be further from the truth. Thanks to peo-
ple like Mannheim butcher Josef Point-
ner, who has developed a special low-fat
sausage, the German diet and German
foods are enjoying a resurgence and are
healthier than ever before.
The Best of German Innovations
Innovative Germany
Ph
oto
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© M
erc
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Ga
Aw
The lotus effect
Pointner was very proud of both the vari-
ety and quality of the wurst (or, sausages)
he sold, but the fat content had to go.
There was a big problem, though: fat is
one of the primary ways to convey flavor.
Collaborating with the Fraunhofer Insti-
tute for Process Engineering and Pack-
aging, Pointner set about finding ways to
make very low-fat sausages – without us-
ing chemical additives – that were still as
tasty as the ones made in the traditional
way. Calling the new line “No Fatty,” he
trimmed the fat away from the ham or
cutlet meat he began with, leaving be-
tween 2 and 3 percent fat, and then he
chopped the remaining meat extremely
fine. Preparing the sausages at very low
temperatures, he came up with products
that he tested on 2,600 volunteers includ-
ing star chef Alfons Schuhbeck. Everyone
raved, and now “No Fatty” is available at
Edeka supermarkets in southern Bavaria.
By the end of this year, it’ll also be avail-
able throughout Germany.
Socks That Never Smell
Unpleasant odors are a fact of life. Our
bodies produce them, and they leach into
our clothes. Cooking odors are nice while
you’re cooking, but less so several days
later. Cloth, in particular, seems to at-
tract and hold them, and getting them out
has spawned a billion-dollar detergent
industry producing substances that don’t
always get the job completely done.
Socks, undergarments, curtains – all re-
tain odors we’d rather not smell!
29
Ph
oto
: B
osch
Measuring the injection jet in diesel injection systems. Bosch researchers are working on improving diesel injection systems.
The picture shows laser-based technology being used to measure an injection jet.
But thanks to research into a curious
family of chemicals called cyclodextrins
by the German Textile Research Institute
in Krefeld, the Munich-based company
Wacker Chemicals has been able to pro-
duce cloth that neutralizes unpleasant
odors and to integrate their product into
many fabrics with practical, everyday
uses. Cyclodextrins have the unusual
ability to form a “host-guest” relationship
with hydrophobic (or water-resistant) mol-
ecules by encasing them and significantly
speeding their rate of decomposition. This
process can work with many substances,
including toxic waste, sewage, and cho-
lesterol. In the case of odors, many of
them are caused by hydrophobic oils. The
oils exuded along with sweat, for in-
stance, quickly turn rancid, which causes
an unpleasant odor. When the sweat goes
into a fabric – a shirt for instance – which
has been treated with cyclodextrins, the
oil undergoes a chemical change that
transforms it into a compound that can be
easily washed out using detergent and
water.
Piezoelectric Fuel Injection for Non-Diesel Engines
As any automobile enthusiast will tell you,
German cars are famous around the
world for their superb engineering – and,
in particular, for their engines.
With the rising cost of oil, though, these
engines have to be designed not only for
speed and endurance but also for the
conservation of fuel, which can lower
both of these factors. But, since the EU
has issued strict rules about reducing
emissions, it has to be done. As a result,
German automakers have headed into
the lab to see what they can do. One of the
more revolutionary results of this re-
search has been the development of
Piezoelectric fuel injection systems by
the companies Bosch and Siemens. The
science behind this is fiendishly difficult
to explain, but the results aren’t: With the
extreme precision this technology af-
fords, exact measurements of fuel can be
injected into the engine through the rapid
opening and closing of the injector, a pro-
cess which results in the production of
far less exhaust. The results: fuel is
saved, pollution is minimized, and effi-
ciency is maximized. Piezoelectric fuel in-
jection has been a standard component of
diesel engines for seven years. Daimler
and BMW will soon make available cars
with standard gasoline engines with the
Piezoelectric system. Moreover, as the
manufacturing technology is refined, oth-
er carmakers will offer similar vehicles
as well.
The Ultrasound Scan
Is it going to be a boy or a girl? The ques-
tion that expectant parents have asked
since the dawn of time is answered easily
enough these days: just have an ultra-
sound scan and find out! But, of course, it
wasn’t always this easy. The previous
method of looking into the human body –
x-rays – involved an amount of radiation
that could imperil the developing fetus.
And radiation made x-rays hazardous for
a lot of other medical applications as well.
But in 1961, Richard Soldner, an engineer
at Siemens, discovered how to use ultra-
sound frequencies to deliver pictures in
real time and, in doing so, revolutionized
diagnostic medicine. Exposure to x-rays
for long enough to see things happening
would be too dangerous, but an ultra-
sound scan was perfectly safe. In 1967, a
doctor in Erlangen named Gerhard Ret-
tenmaier was the first to use ultrasound
to look at developing fetuses. Another ad-
vantage that ultrasound has over x-rays
is that it is able to retrieve better images
of soft organs, such as the pancreas or
thyroid glands. With improvements in
miniaturization and computer analysis of
data collected by ultrasound, the range of
diagnoses made possible by this tech-
nique has only grown – and to the point
that, today, there’s scarcely a place in the
body that can’t be visited, observed, and
analyzed.
30 Invest in Germany Magazine
Future Germany
Managing Ideas
Employees who come up with clever ideas to improve products and processes can
help their careers as well as earn extra money. Furthermore, integrating and
making use of their ideas is of fundamental importance for the competitiveness
of a business location.
ABB, Audi, Siemens and others have expe-
rienced that idea management is ex-
tremely profitable. The average return on
investment is 1:9.6. This is why they try to
shorten the implementation of a specific
software for describing their ideas, en-
tering in the mask the potential use for
the company and the estimated invest-
ment cost too.
Valuable ideas range from the simple to
the technically demanding. An employee
at RWE Systems, for example, suggested
installing flooring with velcro, as he saw
in a hotel while on vacation, making dis-
mantling floors at a later point much eas-
ier. An employee at the tourism industry
giant TUI developed a portable travel ki-
osk, making it possible for people to book
vacations in places like shopping centers.
Industrial powerhouse ThyssenKrupp uses
express wire transfers to save €40,000 in
interest payments, and a new driving
route for its trucks helped the smel-
ting company Krupp Mannesmann save
€200,000.
Everyone at Deutsche Post has heard of
Michael Redsch and recognizes his photo
on the company’s intranet. Redsch, who
works in the letters department in Berlin
Hennigsdorf, is a minor celebrity within
the company. He has submitted more
ideas than any other employee on how the
company can save money. On average, he
comes up with nearly 225 ideas per year,
and he has done so for the last 10 years.
“I enjoy it,” he says.
One of Redsch’s best inventions involves
using water in fire extinguishers instead
of foam. The German postal company
uses the equipment for fire prevention
exercises and saves €50,000 per year by
not having to refill them with expensive
extinguishing chemicals. Redsch profits
with an additional €5,000 in his bank ac-
count.
According to a recent study of EuPD Re-
search Bonn, most of the big German in-
dustrial companies have recognized the
growing importance of idea management.
Its predecessor had been on the agenda
for decades, under the humble name
“company improvement.” The new “idea
management mix” though, is not only the
administration of the ideas of employees
but also the systematic fostering and ac-
tive steering of their creativity. When it
comes to new solutions, better products,
and faster processes, employee knowl-
edge is the key to success.
Factory and office workers often know
the weak spots in their equipment or
working methods and how these can best
be rectified.
“Idea management has no catch,” says
Christiane Kersting from the German In-
stiute for Business Studies, the umbrel-
la organization for ideas management.
“There is no argument against it, only for
it.”
31
Foreigners Dream the “German Dream”
Which positive, optimistic dreams do you have for Germany? That was the question
posed to 30 prominent foreigners interviewed by journalists Wolfgang Blau and
Alysa Selene in cooperation with the German television station ZDF. The journalists
selected people who also dream big when it comes to their own lives – and who live
their dreams. Here are a few interesting answers from the book “German Dream.”
ago. In this respect, Germany is far ahead
of everyone else. As I see it, it is Germa-
ny’s destiny to take the lead in issues con-
cerning the environment, to share its
knowledge and power with others, and to
show others what they can still do better,
how they can better look after their bod-
ies of water and their environment and
build machines – whether automobiles or
complete industrial facilities – that are
more energy efficient.”
Joi Ito, Internet entrepreneur, Japan
“My impression is that Germany is the
country best-equipped to organize Eu-
rope. Every country has a number of
advantages and strengths and – as ste-
reotypical and superficial as it may sound
– the Germans have a proven success
record when it comes to the construction
and operation of big organizations and
structures… In the 21st century, the In-
ternet is the cornerstone of the open
community and open democracy. Without
open source there is no Internet. The In-
ternet brings real freedoms – the free-
dom to participate, to innovate, to in-
crease value, to make contact – and these
are the values on which, in my view, Eu-
rope should focus its attention. In this re-
spect, Germany is the country with the
technical know-how, the necessary mar-
ket size, and the influence to coordinate
such an effort.”
Hunter Lovins, corporate consultant, USA
“The Germans, German companies, and
the German government bring together
the different currents and tackle environ-
mental problems, such as global warm-
ing, in a way that enables individual citi-
zens to find higher value in their lives.
Use Germany’s huge technical capacities,
use the sectors which already earn their
money with solar and wind energy, and
use the German ability for intelligent pol-
icy-making to design an ecologically sus-
tainable future for Germany, Europe, and
the whole world… Germany’s auto-tech-
nical excellence and the creativity of the
German people should be used to build
beautiful, exciting cars of superior quali-
ty, which also save enormous amounts of
energy. These cars should be driven on
fuels produced by a regenerating agricul-
ture sector, or they should have fuel-cell
engines, or they should use technologies
that we haven’t even thought about yet!”
Wangari Maathai, scientist and environmental conservationist, Nobel Peace Prize winner, Kenya
“I love the fact that Germany is a country
that works very hard. The Germans are
known all over the world for their work
ethic. They are very committed to every-
thing they do… I believe Germany has the
chance to play a very important role in the
G8 countries and the EU when it comes to
the promotion of sustainable develop-
ment in other countries. I would welcome
it very much if Germany would invest
more in the intelligent management of
our environment.”
Jeremy Rifkin, economist, USA
“I think Germany is positioned very well to
lead the third industrial revolution, thanks
to Germany’s expertise in the chemical,
engineering, and automotive engineering
sectors. Germany also leads in the field
of renewable energies required for hy-
drogen production. Germany is the leader
in wind energy and is, in international
comparison, very well positioned for the
switch to renewable energies. Already to-
day, Germany fulfills the general techno-
logical, scientific, and commercial condi-
tions to actually become the leader of this
third industrial revolution.”
Simon Anholt, marketing expert, Great Britain
“It is one of the characteristics the world
loves of the Germans, namely the fact
that their products are reliable, that their
systems, structures, organizations, and
administrators are reliable and well-or-
ganized. People like that, especially given
the fact that this characteristic becomes
more precious every year, as the world
turns into an ever more chaotic, ever
more unpredictable mess.”
Anne Cameron, author, Canada
“It is a fact that you have a reputation all
over the world for manufacturing the
best equipment, the best machines, cars,
and motor bikes. Even the best bicycles
still come out of Germany! Therefore, it is
my dream that Germany pushes forward
as an example to others and develops the
alternative technologies we all need now
to make us independent from crude oil.
Already today, Germany is the leading
developer of wind energy and tidal power
stations, and you have the population re-
quired for the task and the production
capacities. I would, therefore, really wel-
come it if Germany’s industry could make
a special effort to develop alternatives to
the internal combustion engine. Of
course, everyone is already playing
around with these technologies, but no
one is really serious about them, as can
be seen from the amount of capital still
clinging to the gas and crude oil indus-
try.”
Jean-Michel Cousteau, ocean conservationist, France
“As far as environmental issues in Eu-
rope are concerned, I think Germany has
shown the direction in which we should
have already been heading a long time
Ph
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32 Invest in Germany Magazine
Web 3.0: Germany’s Flagship Project Hyperlinks in the WorldWideWeb
More than a billion people log on to the
Internet worldwide and that could double
over the next decade. And we’re not just
passively eyeballing websites. We all
want our own part of it.
Today’s Web 2.0 is all about user-gener-
ated content and social networking sites.
The Internet has got personal, genuinely
interactive, but also rather unwieldy.
Navigating it can be like rummaging
through the undergrowth.
Now the world’s scientists are working
on solutions for the next Internet genera-
tion, and Germany is competing to be at
the forefront of the latest innovations.
Here, scientists from over 30 institutions
and companies, such as Siemens and SAP,
have put their heads together under the
poetic umbrella of “Theseus” to work on
the new Internet technology.
“Theseus is the beginning of the end of
the conventional search in the web,” says
Lutz Heuser, the chief development ar-
chitect at SAP.
The heart of the project is an intelligent
set of search tools that will optimize our
access to knowledge from the Internet
and Intranet. They are working on con-
verting this technology into commercially
viable services and profitable business
models.
Current search engines see websites as
meaningless groupings of letters. They
match letters, throwing up random lists
of sites, and then hand the baton to the
user. Users can spend hours picking
through the hotchpotch of relevant and ir-
relevant sites.
A Search Tool that Classifies Content and Leads to New Application Opportunities
The answer to that will be Web 3.0, a new
semantic technology, or, in other words, a
new infrastructure for information on the
Internet. The key will be a sort of smart
search tool that is able to recognize and
classify content because – crucially – it
will understand the meaning of the infor-
mation. Ultimately, processing and re-
trieving knowledge will become faster,
more efficient, and more cost effective.
“Theseus” is testing this out in six spe-
cific project areas relating to specific
working environments.
“Medico,” for example, is looking at how
to help doctors identify and diagnose
medical conditions. It then suggests pos-
sible treatments. At a click, new technol-
ogy will enable a doctor’s computer to
analyze X-rays and scans, pick out abnor-
malities, catalogue data, and compare it
to similar diagnoses taken from a global
database.
The “Processus” project will put invalu-
able information at the fingertips of com-
panies by scouting out specialist infor-
mation and advising on how to source
manpower or materials. And “Alexandria”
is looking at cataloguing or tagging the
mass of unstructured data lurking in our
computers – from emails to training tuto-
rials – in order to make it accessible and
useful.
(See also www.theseus-programm.de)
Race Against Time
Current web technology, Web 2.0, was
largely inspired by small American start-
ups and subsequently taken over by larg-
er corporations. This time, Europe is vy-
ing with the US to set the standards for
the new technology. And governments
are getting involved.
The German government has injected the
bulk of the funding into “Theseus.” The
Federal Ministry of Economics and Tech-
nology announced last year that it will in-
vest €90 million over the next five years.
This will be matched by another €90 mil-
lion from industry and business.
Germany doesn’t want to repeat previous
mistakes. It was over 10 years ago that
the Fraunhofer Research Institute in Ba-
varia invented the MP3, only to see it
brought to the market by US companies.
Dr. Andreas Goerdeler, from the Federal
Ministry of Economics and Technology,
says now is a crucial time for Germany.
“This is a unique opportunity to take the
lead in the global competition to create
the future of Internet technology and to
put our stamp on the market.”
The next giant leap for the Internet could
be just a few years away.
Future Germany
No Fear and a Fighting Spirit
Future Germany
“Managing the Future” was the theme of an event that brought 42 of Germany’s top
young managers to Frankfurt to reflect on the shape of the future.
Ph
oto
: B
ert
Bo
ste
lma
nn
The German publication manager magazin
invited the cream of the crop of Germa-
ny’s young business elite to a discus-
sion about the future of globalization. The
world economy is passing through a deli-
cate and very restless phase marked by
crises in the real estate, banking, credit,
and oil industries, the renationalization of
economic policy, and erosion of the WTO’s
multilateral world trade system.
The questions posed were: What is the
future of globalization? Will the open
world economy survive a resurgence of
protectionism? What will the world look
like in 2030? And how should companies,
states, and communities position them-
selves in anticipation of this world? Par-
ticipating in the discussion were men and
women in their 30s and 40s who will play
a significant role in shaping the German
economy over the next three decades.
Since they are the men and women who
will help manage Germany’s future, their
responses to these questions were of
particular interest and importance.
In the end, all participants agreed that
the pace of global development will once
again pick up and will, in turn, significant-
ly increase risks. And they agreed, that
they are ready to take the challenges and
go on the offensive.
What are the challenges?
They estimated that the number of peo-
ple offering services has doubled since
1990 to more than 2 billion. Many of these
people have only been competing for their
slice of the international job pie for a short
while. In the future, a growing number of
them will have an opportunity to special-
ize, to study, to invest, and to become
more productive. As globalization shifts
into a higher gear, the competition will get
even tougher. As the catchphrase goes:
You ain’t seen nothing yet.
The anticipated “turbo-globalization” will
bring social dislocation. In fact, more
than 20 percent of the event’s participants
believed that social unrest poses the big-
gest danger to the open world economic
order. Next to social unrest, the other
risks are: protectionism, commodity
shortages, financial crises, the conse-
quences of climate change, imbalances
on the foreign exchange markets, a
worldwide recession, and rising energy
and transportation costs.
In the course of the discussion, it became
obvious that many citizens and experts
entertained different visions of globaliza-
tion. For one thing, many had expected
that people would develop into world
citizens as economic globalization ran its
course. Contrary to this expectation, how-
ever, this has not been happening, and we
are paradoxically experiencing growing
levels of cultural and religious fragmen-
tation.
The vast majority of tomorrow’s manag-
ers held that German companies and the
German state should attempt to be among
the leading decision makers in develop-
ments and thereby further improve the
country’s future prospects. The young and
elite group doubt the effectiveness of
protection from competition as a strategy
for the future. Instead, they believed that
companies should put even more empha-
sis on innovation, research and develop-
ment, education, and employee motiva-
tion.
The predominant view was that Germany
is in an extremely good position to benefit
from continued globalization, and the
group seemed eager to engage in the
battle of global competition.
The event “Managing the Future” in Frankfurt
Financing
34 Invest in Germany Magazine
Financing Germany’s Industries of Tomorrow
Due to the fast pace of development and
the continuously expanding production
capacities in the fields of photovoltaics
and biofuels, more and more foreign
firms are showing an interest in locating
their companies in Germany. For the
same reason, in these and other growth
sectors, a rising number of large projects
are being implemented in Germany.
As a result of this increased interest,
many investors are turning their attention
to the European Investment Bank (EIB) and
its financing programs.
As part of the EU’s “Action Plan 2007–
2009” energy policy, it was decided that
the EIB should step up its efforts aimed at
reaching the defined goals under the
themes of “renewable energy” and “en-
ergy efficiency.”
The European Investment Bank (EIB)
was created in 1957 by the Treaty of
Rome and launched the following year.
With assets exceeding €164.8 billion,
the EIB serves as the long-term
financing bank for the European Union.
The lender aligns its activities with
the political goals of the EU and uses
its financing operations to support
the European government’s key goals
as well as the integration and social
cohesion of its 27 member states. The
EIB is co-owned by all 27 member
states of the European Union. The size
of each country’s stake in the bank
is determined by its economic strength
– calculated using Gross Domestic
Product – when the country first joined
the Union.
More information: www.eib.org
The central element of the EIB’s financing
program is the so-called “single loan,”
which aims to tailor itself to the specific
needs of investors. On the one hand, this
loan is attractive due to the conditions of
the interest rate, which is lower than the
LIBOR (London Interbank Offered Rate)
and fixed for the complete duration – up
to 20 years – of the loan. On the other
hand, the EIB is a public bank that does
not charge any borrowing fees, as profit
is not its goal.
The loan can amount to up to 50 percent
of a project’s total costs. Furthermore,
cooperating with private banks to finance
projects is possible and even welcomed
by the EIB. The EIB only uses this instru-
ment to support investment projects val-
ued at more than €25 million. The appli-
cation procedure is simple and non-
bureaucratic, and it only takes around six
weeks.
Many other industry sectors (e.g., the au-
tomobile, aviation, pharmaceutical, and
chemical industries) also fall within the
EIB’s target market and are therefore eli-
gible for project financing.
"Solar tree" in Gleisdorf
Project Cycle
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A closer look at Germany
First port of call:
The German Chamber Network
Spread over 80 countries in six
continents.
Support of thousands of German
companies operating abroad.
Fully integrated into the economy
of the host countries.
More than 40,000 member companies,
of which two thirds originate in the
local markets.
Assisting foreign companies that want
to enter the German market either by
trade or through investment.
Providing contacts, information and advice,
particularly in the fields of:
market opportunities and marketing
strategies
investment conditions and support
import and export regulations
customs duties
currency regulations
Closely cooperating with Invest in Germany,
the inward investment promotion agency of
the Federal Republic of Germany.
More and more foreign companies consider Germany to be a leading market and the best gateway
to the European Union. To be successful, foreign companies need a strong partner.
DeutscheAuslandshandelskammern
AHK - Your Bridgeto the German MarketAHK - Your Bridgeto the German Market
The German ChamberNetwork | AHKAll Around the Globe:
The German Chamber Network
Contact:
Association of German Chambers of Industry and Commerce
D-11052 Berlin | Germany
Tel. ++49-(0)30-20308-0 | Fax ++49-(0)30-20308-1000
Internet: www.dihk.de, www.ahk.de
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