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Economic Overview Germany:Market, Productivity, InnovationIssue 2011/2012

Economic Overview Germany www.gtai.com

Basic Data

Area: 357,104 sq. km

Population (m.): 82

Number of companies

3.72 million, 99.6% SMEs

Total turnover of all companies*

EUR 5.36 trillion,

38.0% SME turnover

Economic Development

GDP (nominal in EUR billion)

2010: 2,477; 2009: 2,397;

2008: 2,481

Per capita GDP (EUR)

2010: 30,564; 2009: 29,278;

2008: 30,214

Inflation rate

2010: 1.1%; 2009: 0.2%; 2008: 2.8%

Unemployment rate

2010: 7.3%; 2009: 7.5%; 2008: 7.3%

* Most current data 2008 Financial Services, Renting,

Business Services 27.3%

Production-based

Industries 25.0%

Commerce, Catering Industry

and Communications 15.4%

Others 32.3%

GDP Formation 2010 (in percent)

Foreign Trade

Foreign trade(EUR bn)

2008 % 2009 % 2010 %

Exports

Imports

Balance

984.1

805.8

+178.3

+2.9

+4.3

803.3

664.6

+138.7

-18.4

-17.5

959.5

806.2

+153.4

+19.4

+21.3

Germany’s trade relations with EU (EUR bn)

Exports to EU

Imports from EU

Balance

621.3

531.5

+89.8

+0.5

+5.1

489.1

441.3

+47.8

-21.3

-17.0

557.3

515.2

+42.1

+13.9

+16.7

Export goods (% of total exports – SITC) 2010: machinery 18.1; motor vehicles and parts 15.9; chemical goods 15.7;

electronic goods 9.5; foodstuffs 4.2; others 36.6

Import goods (% of total imports – SITC) 2010: chemical goods 12.7; machinery 12.0; electronic goods 11.0;

crude oil 7.5; motor vehicles and parts 7.4; foodstuffs 5.7; others 43.7

Sources: Federal Statistical Office, Federal Ministry of Finance, ifm Bonn 2011

GDP Growth

6

4

2

0

-2

-4

-62008 2009 2010

(real annual change in percent)

1.3

-4.7

3.6

Economic Overview Germany www.gtai.com

Foreign Direct Investment

Paving the Way for Foreign Direct Investment

First Choice Business LocationA recent study conducted by the

American Chamber of Commerce

highlights the positive regard in

which the German business envi-

ronment is held by US companies.

Invited to indicate their main me-

dium-term investment focus within

the EU, 60 percent of participating

American companies named Ger-

many as their fi rst choice; followed

by Eastern Europe (28 percent), and

the UK (18 percent) respectively.

Ernst & Young’s “European Attrac-

tiveness Survey 2011” confi rms

Germany’s reputation as one of the

most attractive business locations

in the world. International decision

makers ranked Germany fi rst within

Europe, and fi fth worldwide in the

“most attractive business location”

category.

Free and Open MarketsGermany has a welcoming attitude

towards foreign direct investment

(FDI). The German market is open

for investment in practically all

industry sectors, and business

activities are free from regulations

restricting day-to-day business.

German law makes no distinction

between Germans and foreign nati-

onals regarding investments or the

establishment of companies. The

legal framework for FDI in Germany

favors the principle of freedom of

foreign trade and payment. There

are no restrictions or barriers to

capital transactions or currency

transfers, real estate purchases,

repatriation of profi ts, or access

to foreign exchanges.

Supporting Investment ProjectsIncentives in Germany are designed

to meet the immediate capital needs

of investors. Early stage investment

fi nancing provides funding at the

beginning of the new investment

project. These incentives, mostly

provided as cash grants, are impor-

tant as they guarantee liquidity at

a stage in the investment process

when investor capital requirements

are typically high. Later stage invest-

ment incentives are made available

in the form of a raft of programs

created to support putting together

a workforce in Germany (e.g. through

wage subsidies) and provide gene-

rous R&D project assistance. Incen-

tives in Germany are available to all

investors – regardless of investor

country of provenance. Funding to

the tune of EUR 26.3 billion has been

freed up by the EU (co-fi nanced using

means obtained from German nati-

onal and federal budgets) through

2013. As well as this, Germany and its

individual federal states also make

their own incentives funds available

to prospective investors.

For more incentives information,

please visit our website:

www.gtai.com/incentives

Global FDI MagnetAccording to the United Nations

Conference on Trade and Develop-

ment (UNCTAD), Germany ranks

among the world’s leading countries

for foreign direct investments with

more than EUR 509 billion in inward

FDI stocks in 2010. This represents

a growth of 33 percent from 2005

to 2010.

According to offi cial Bundesbank

(German Central Bank) statistics

for 2009, 77 percent of all FDI

stocks in Germany originate from

within the EU-27; with a further

nine percent derived from the re-

maining European non-EU coun-

tries. Investments from outside

the EU continue to grow. North

America accounts for eight per-

cent of FDI stock, while Asia holds

a fi ve percent share.

AmCham Business Barometer 2011

American business executives highlighted the following factors as the top

location advantages that distinguish Germany from its competitors.

Economic strength: diversifi ed mixture of businesses

Infrastructure: excellent nationwide infrastructure

Framework conditions: governmental promotion of forward-thinking

industries (e.g. solar and biotech)

Human capital: highly qualifi ed workforce, skilled talent pool

Source: American Chamber of Commerce Germany, Boston Consulting Group 2011

Economic Overview Germany www.gtai.com

Foreign Direct Investment

Foreign Direct Investment Projects

Every year more and more compa-

nies discover Germany as a secure

and rewarding investment location.

More than 55,000 foreign companies

are already operating in Germany,

providing employment to around

three million people – proof positive

of Germany’s attractiveness as an

international business location.

Between 2003 and 2010, fDi Markets

recorded a total of 3,925 investment

projects from 2,929 foreign compa-

nies. With 776 projects, 2010 pro-

ved to be the most successful year

on record – with Germany placing

fourth internationally in terms of

FDI projects attracted.

The most important countries as

sources for new investment projects

are the USA (27 percent of all invest-

ment projects), UK (nine percent),

and Switzerland (seven percent) res-

pectively. In 2009, China emerged as

a major source of investments, with

the number of Chinese investment

projects into Germany more than

doubling within just one year. This

high level was reached again in 2010,

making Germany the world’s num-

ber one location for Chinese green-

fi eld investments.

Diverse Industry OpportunitiesAccording to fDi markets, foreign

companies invested in 39 different

sectors – underlining Germany’s

highly diversifi ed economy. Most

new investment projects were rea-

lized in the ICT & software industry

(18 percent of new projects). Busi-

ness and fi nancial services as well

as automotive and industrial machi-

nery & equipment were close behind

each with 15 percent of all projects.

Most new projects open sales and

marketing & support offi ces. Almost

one in fi ve investment projects is

manufacturing-site located – making

this the second most important

business activity in Germany.

Germany Trade & Invest's industry

experts will assist you to realize

your investment project in Germany.

Please contact request@gtai.comfor more information.

ICT & Software 18%

Business & Financial

Services 15%

Automotive, Industrial

Machinery & Equipment 15%Chemicals, Plastics,

Paper 8%

Electronics &

Semiconductors 7%

Consumer Goods

(incl. Food & Beverages) 7%

Textiles 6%

Health Care, Pharma,

Biotechnology 6%

Transportation, Storage &

Logistics 5%

Energy, Minerals, Metals 4%Hotel, Tourism, Entertainment 3% Renewable Energy 2%

Other Sectors 4%

FDI Project Share in Germany by Sector 2003-2010 (as percent of total FDI projects)

Source: fDi Markets 2011

Sales, Marketing & Support

*Shared Service Center/Buisness Process Outsourcing/Contact CenterSource: fDi Markets 2011

0 5 10 15 20 25 30 35 40

Manufacturing

Business Services

Logistics, Distribution & Transportation

Headquarters

R&D

ICT & Internet Infrastructure

SSC/BPO/CC*

Education & Training

Other Activities

35%

17%

15%

6%

6%

2%

1%

1%

1%

17%

FDI Project Share in Germany by Business Activity 2003-2010 (as percent of total FDI projects)

Europe’s Economic Hub

Europe’s Largest MarketGermany is the largest market in

Europe. It constitutes 20 percent of

European GDP, and is home to 16

percent of the total European Union

(EU) population. The German econo-

my is both highly industrialized and

diversifi ed; with equal focus placed

on services and production.

Quick RecoveryGermany quickly recovered from

the economic slump of 2009. With

a GDP increase of 3.6 percent, the

economy experienced a strong growth

dynamic in 2010. In the second quar-

ter of 2010 alone, Germany’s GDP

expanded by 2.2 percent – the stron-

gest quarter-on-quarter growth since

reunifi cation in 1990. This positive

development is refl ected in all rel-

evant economic key data. The trend

is expected to continue in 2011, with

the German government forecasting

a GDP growth rate of 2.6 percent.

Global PlayerGermany’s products continue to be

export hits worldwide. Since 2003,

exports have grown by more than fi ve

percent on average each year. In fact,

Germany overtook the United States,

becoming the world export leader

for six years in succession until 2008.

German trade fi gures enjoyed a brisk

recovery from the global recession,

increasing by around 20 percent in

2010. Imports and exports in 2010

amounted to EUR 806 billion and

EUR 960 billion respectively.

German-produced goods from the

chemical, automotive, and machin-

ery & equipment industries are in

particularly high demand worldwide.

Germany’s main trading partners

number European countries such

as France, UK, Italy, and the Nether-

lands as well as international mar-

kets including the United States,

China, Russia, and Japan. Seventy-

one percent of all exports are ex-

ported to European countries, of

which 15 percent go to eastern Euro-

pean countries. In 2010, the number

two region for German exports was

Asia; receiving approximately 15

percent of all goods from Germany,

followed by the Americas at approx-

imately 10 percent.

Manufacturing Location GermanyGerman companies represent more

than nine percent of European man-

ufacturing companies and generate

27 percent of total EU turnover in the

sector. In fact, the manufacturing

sector represents nearly one fi fth

of Germany’s “value added” – one

of the highest shares in Europe. In-

creasingly more foreign companies

are placing their faith in Germany as

a vital production site location, and

are benefi ting from the country’s

excellent business framework and

superior productivity rates.

SMEs: Germany’s Economic BackboneExports are driven by Germany’s

backbone of highly innovative small

and medium-sized enterprises

(SMEs). These constitute 99.6 percent

of all companies, employing 79.5

percent of all employees in Germany.

Many of these SMEs are world mar-

ket leaders in their respective niche

segments. Together with interna-

tionally leading large companies –

including Bayer, BASF, Daimler,

Volkswagen, and Siemens to name

but a few – they make up Germany’s

manufacturing industrial base.

Economic Overview Germany: Market

GDP(in EUR billion)

Share of Total GDP

(EU-27)

Population(in million)

Share of Total

Population(EU-27)

Germany 2,477 20% 82 16%

France 1,933 16% 65 13%

UK 1,697 14% 62 12%

Spain 1,063 9% 46 9%

Netherlands 588 5% 17 3%

Poland 354 3% 38 8%

Czech Rep. 145 1% 11 2%

Slovak Rep. 66 1% 5 1%

USA 10,957 309

Japan 4,122 128

EU-27 12,284 501

Eurozone 9,170 331

Share of Total GDP and Population in the European Union 2010

Note: Czech Rep. GDP data are forecastsSource: Eurostat, US Census Bureau, Japanese Statistics Bureau 2011

Economic Overview Germany www.gtai.com

Closer to Market with First Class Infrastructure

Europe’s Global Logistics HubWith state-of-the-art transporta-

tion networks by road, rail, sea, and

inland waterways – as well as a

dense network of both national and

international airports – Germany

provides easy access to domestic

and international markets. Little

wonder that Germany is a global

logistics hub. More goods pass

through Germany than through any

other country in Europe. Its approx-

imately one quarter share of the

European logistics market (EU-27,

Norway and Switzerland) refl ects

Germany’s role as the major pla-

yer in the continent’s economy.

World Class Transport InfrastructureGermany’s infrastructure excel-

lence is confi rmed by a number of

recent studies including the Swiss

IMD’s World Competitiveness Year-

book and various investor surveys

conducted by institutions including

UNCTAD and Ernst & Young. The

2011-2012 Global Competitiveness

Report of the World Economic Fo-

rum (WEF) ranked Germany fi rst

in Europe and second worldwide

for infrastructure; singling out

Germany’s extensive and effi cient

infrastructure for highly effi cient

transportation of goods and passen-

gers for special praise. Accumulated

in this score for Germany are high

marks for the quality of roads and

air transport, excellent railroads

and port infrastructure, as well

as its communications and energy

infrastructure.

Economic Overview Germany: Market

World Class Network InfrastructureAmong the highlights of the coun-

try’s network infrastructure are

Europe’s second largest port

measured in container port traffi c

(Hamburg), Europe’s largest port

container terminal (Bremerhaven)

and over 250 inland ports. Germany

has a dense network of airports (of

which 22 are international airports).

Among them, Frankfurt is the world’s

seventh and ninth largest airport

in terms of cargo and passenger

volume respectively. The country’s

highway system has one of the high-

est highway kilometer density levels

in Europe, its 37,900 km of railway

track being almost enough to circle

the globe. Germany’s high-speed

railway network, with speeds of up

to 300 km/h, is the fourth largest in

the world.

Logistics GiantsNot only is Germany’s logistics infra-

structure among the best, its compa-

nies are also global logistics leaders.

In fact, the world’s largest logistics

services provider is a German com-

pany – Deutsche Post DHL. Deutsche

Bahn operates Europe’s largest rail

network and Lufthansa Cargo is

one of the world’s leading global air

freight companies. Annual revenues

of over EUR 200 billion in 2010 make

Germany Europe’s logistics leader.

No other EU country comes close to

Germany’s market size.

“Germany is our strategic focal point, a country

there is no way around in our industry. Germany

is the largest market in Europe, which creates the

greatest advantages for our company. Investing

here was an absolute must.”Sun Shubao, General Manager, Haier Group Europe and Germany

Source: World Economic Forum 2010

Rank Country

1 Hong Kong

2 Germany

3 Singapore

4 France

5 Switzerland

6 UK

7 Netherlands

8 UAE

9 South Korea

10 Denmark

Quality of Infrastructure

Source: WEF 2011

Bringing East and West TogetherIn the north, Germany’s seaports

are an important conduit for trade

with the UK, Scandinavia, and the

Baltic states. In the west, an exten-

sive network of roads, rail links and

inland waterways feeds into France

and the Benelux countries. To the

south, Germany has strong com-

mercial ties with Switzerland and

Austria and direct road, rail and

water links with the Balkan states.

Turning eastwards, Germany’s bor-

ders with Poland and the Czech Re-

public also bring the Slovak Republic

and Hungary within easy reach and

make the more distant markets in

Turkey and Russia readily accessible.

Economic Overview Germany www.gtai.com

Economic Overview Germany: Productivity

Increasing Competitiveness

High ProductivityMeasured in unit labor costs, Ger-

many experienced a major increase

in productivity the past decade. In

marked contrast to other European

countries which have experienced

an overall increase in unit labor

costs, Germany’s unit labor costs

decreased by a yearly average of 0.3

percent for the period 2005 to 2010.

This made the economy more com-

petitive – particularly manufacturing.

Stable Labor CostsAt the same time, the labor cost gap

between Germany and its eastern

European neighbors has been signifi -

cantly reduced. In fact, Germany has

gained the labor-cost edge in recent

years. Since 2000, wages have risen

in most European countries (EU-27),

with the growth rate averaging 3.7

percent. While some countries –

particularly those in eastern Europe–

experienced a rise of more than

seven percent, Germany recorded

the lowest labor cost growth within

the EU at just 1.6 percent. This has

been another decisive argument in

favor of Germany as a premium busi-

ness location.

Excellent Production Standards Germany’s high productivity is also

closely linked to its excellent pro-

duction process standards. This has

been confi rmed by a study of inter-

national executives conducted by

the World Economic Forum. Accord-

ing to the study fi ndings, Germany

is seen as a country where the best

and most effi cient process technol-

ogy is applied.

Japan

1=labor-intensive methods or previous generations of process technology7=the world’s best and most effi cient process technology

Source: World Economic Forum 2011

0 1 2 3 4 5 6 7

GermanyNetherlands

USA

France

UK

Czech Rep.

Spain

Slovak Rep.

Poland

6.5

6.36.0

5.6

5.6

5.5

4.6

4.5

4.4

4.0

Assessment of Sophistication of Production Process 2010

China 4.0

Annual average growth expresssed as percentage of industry, construction and services.Source: Eurostat 2011

European Labor Cost Growth 2001-2010

0% 5% 10%

1.6%

2.1%

3.4%

3.6%

4.1%

6.3%

6.8%

8.3%

7.7%

Germany

France

Netherlands

Spain

UK

Poland

Czech Rep.

Slovak Rep.

Hungary

“Europe is a growing market for our light-curing

adhesives. Due to the highly qualifi ed workers and

effi cient cost structure, Germany was the clear

choice for the expansion of our production and

R&D activities.”A.Gregory Bachmann, President, DYMAX Corporation

Economic Overview Germany www.gtai.com

Highly Skilled WorkforceGermany’s excellent workforce is

decisive to the country’s high pro-

ductivity rates. It comprises over

40 million people – making it the

largest pool of ready labor in the

EU. Germany’s world-class educa-

tion system ensures that the high-

est standards are always met. More

than 80 percent of the German work-

force has received formal vocational

training or is in possession of an

academic degree.

Dual Education SystemGermany provides direct access to

a highly qualifi ed and fl exible labor

pool. For vocational training the

country developed the dual educa-

tion system – unique in combining

the benefi ts of classroom-based and

on-the-job training over a period of

two to three years – which is specifi -

cally geared to meet industry needs.

There are currently around 350

occupations recognized by the sys-

tem. The German Chambers of In-

dustry and Commerce (IHKs) ensure

that exacting standards are rigidly

adhered to, guaranteeing the quality

of training provided across Germany.

Engineering ExcellenceAccording to the OECD, Germany

has an excellent standard in higher

education. In 2010, some 443,000

students – at more than 400 uni-

versities – embarked on a course of

academic study. Technical fi elds of

study experienced an undergraduate

enrollment level increase of more

than eight percent. Germany’s share

of university students in the sciences,

mathematics, computer sciences,

and engineering is the second high-

est in the EU, with 31 percent of all

students. German universities have

introduced masters and bachelor

degrees for improved international

acceptance and comparison.

In addition, the country can be proud

of one of the highest rates of gradu-

ates with a doctoral degree. With 312

PhD graduates per million inhabit-

ants, it ranks second in a comparison

of OECD countries.

Outstanding ReputationGerman labor fl exibility is refl ected

in higher than average employee

motivation levels – exceeding those

of most leading industrialized nations.

In fact, according to the IMD World

Competitiveness Yearbook, German

Economic Overview Germany: Productivity

employee motivation levels are

greater than those of their coun-

terparts in the US, China, Poland,

France, and the UK. A direct corol-

lary of this is the fact that Germans

work more than their international

peers (41.8 hours per week) and lose

less days per annum to strike action

than other European nations (sig-

nifi cantly below the EU-27 average

according to Eurofound).

Workforce in Germany by Level of Professional Education 2010(percent of total workforce)

Source: Federal Statistical Office 2011

Skilled Craftsmen

(dual education system

apprentices) 55%

Vocational College

Graduates & Technicians

(master craftsmen) 9%

Unskilled 18%University Graduates 18%

10=highest motivation levelNote: IMD WCY Executive Opinion Survey based on an index from 0 to 10 Source: IMD World Competitiveness Yearbook 2011

Worker Motivation in Companies 2011

Denmark

0 1 2 3 4 5 6 7 8

GermanyNetherlands

Japan

USA

Czech Rep.

China

UK

Hungary

Poland

7.247.14

6.88

6.47

6.05

5.96

5.70

5.24

5.00

Spain

Slovak Rep.

4.95

4.82

France 4.42

8.09

Economic Overview Germany www.gtai.com

High Innovation Rate

Innovation Leader GermanyIn Germany, enormous sums are

invested in the development of new

technologies and innovations. Today,

total R&D expenditures of EUR

66.7 billion (2009) make Germany

Europe’s largest research location.

Since 2005, R&D expenditures have

steadily increased at a compound

annual growth rate of 4.6 percent.

R&D is considered to be among the

most important areas for the devel-

opment of the German economy. In-

dustry in particular has signifi cantly

increased its R&D expenditures in

recent years. The European Com-

mission accordingly expects Germany

to reach its ambitious 2020 R&D

target of three percent of GDP in

the coming years (Innovation Union

Competitiveness Report 2011).

R&D Excellence in German Regions The large amounts Germany invests

in fast-developing technologies

is visible at a regional level. The

individual federal state research

budgets correspond with those of

other European countries. For ex-

ample, Bavaria signifi cantly exceeds

Russia’s R&D investments, while

North Rhine-Westphalia invests

more than its western neighbor, the

Netherlands.

One of the most R&D intensive

regions with the highest research

expenditures in Europe can be

found in Germany. The regions

around Stuttgart, Karlsruhe, Tübin-

gen, and Darmstadt are unique in

Europe, benefi ting from high R&D

budgets in strong industries and

their immediate environs. Eight

percent of the total R&D budget in

Europe is spent in this geographical

cluster alone.

Value Added Through Innovative TechnologiesA 2011 study carried out by the

German Institute of Economic

Research (DIW) found that no other

industrialized country produces a

larger share of gross value added

in research-intensive manufactur-

ing industries than Germany. The

share of total value creation in

research-intensive industries in

Germany exceeds Japan and US

levels and is more than double the

share of France, UK, and Italy.

High-Tech Products Made in GermanyGerman companies are global lead-

ers in the development of new tech-

nologies. Standing for high quality

and innovation, the “Made in Germany”

brand has been a seal of quality for

over a century. In 2009, Germany ex-

ported high-tech goods to the value

of EUR 102 billion – making it the top

high-tech goods exporter in Europe

and second worldwide.

Economic Overview Germany: Innovation

R&D Expenditure by Federal State Equivalent Country 2009

NORTH SEABALTIC SEA

CZECH REPUBLIC

POLAND

THE NETHERLANDS

BELGIUM

FRANCE

LUXEM-BOURG

Source: Eurostat, Federal Statistical Office 2011

Car

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com

Baden-Württemberg

Spain + Portugal

Bavaria Russia

Saarland Croatia

Rheinland-Pfalz

Poland

North Rhine-Westphalia

Netherlands

Hessen Belgium

Saxony Portugal

Thuringia Hungary

Saxony-Anhalt Slovenia

Niedersachsen Norway

Mecklenburg-Vorpommern

Romania

Schleswig-Holstein

Slovenia + Slovak Rep.

Hamburg Czech Rep.

Bremen Luxembourg

Berlin Turkey

Brandenburg Bulgaria +

Romania

Germ

any

Fran

ce

UK

EUR 42.1 bn

EUR 29.3 bn

EUR 67.7 bn

DENMARK

Economic Overview Germany www.gtai.com

Intellectual property rights enjoy a

high level of protection in Germany.

For technical and commercial in-

novations, property rights can be

registered in the form of patents,

utility models, trademarks, and

designs. The same conditions apply

to foreigners as they do German

nationals when registering property

rights. These are just some reasons

why Taylor Wessing ranked Germany

fi rst in its Global Intellectual Prop-

erty Index 2011.

Profi ting from Innovation ClustersThe German R&D landscape is best

exemplifi ed by close cooperation

between the worlds of science and

industry. Germany’s publicly funded

research bodies provide an interna-

tionally unique selling point. The

applied research institutes of the

Fraunhofer Society and Leibniz

Association provide companies –

particularly SMEs – with unparal-

leled access to world-class re-

search. With about 60 institutes and

more than 13,000 employees, the

Fraunhofer-Gesellschaft utilizes

EUR 1.6 billion in research funding

every year. The Leibniz Association

has established a network of more

than 80 research institutions with al-

most 12,000 employees. Some of the

world’s most renowned fundamental

research institutes are also located

in Germany. The Max Planck Society

and the Helmholtz Association allow

companies to outsource costly

research activities. This eases the

access of developing new products

and decreases research and de-

velopment costs. Numerous spin-

offs underline the ability of German

research organizations to capitalize

on technology.

Public R&D Support: Germany’s High-Tech StrategyAn unprecedented campaign to foster

the advancement of new technolo-

gies has been launched by the Ger-

man government. Annual R&D fund-

ing of approximately EUR 4 billion

has been set aside to develop cutting

edge technologies. R&D projects

can accordingly count on numerous

forms of fi nancial support. Interest-

reduced loans and special partner-

ship programs complete Germany’s

public R&D project support.

World Class Know-HowWhile Germany is home to the larg-

est population of researchers in

Europe (20 percent of all EU scien-

tists live and work in Germany),

German scientists work on proj-

ects all over the world. For ex-

ample, research results within the

Max Planck Society are achieved

through fruitful partnerships

with more than 6,500 partners in

research institutions across 123

countries. Cooperation projects

between companies and academic

research institutes provide an ef-

fi cient way to close knowledge gaps.

Scientists can be easily integrated

into the company team of develop-

ers and researchers and, increas-

ingly, institutes provide for the

necessary laboratory facilities.

Europe’s Patent LeaderWith over 12,000 patents granted

at the European Patent Offi ce in

2010, Germany’s share of patents is

almost twice that of France and the

UK combined. This shows the com-

mercial viability of innovations made

in Germany. The country is also the

leading European nation in triadic

patents (patents registered at the

three major global patent offi ces:

the European Patent Offi ce, the

United States Patent and Trademark

Offi ce, and the Japan Patent Offi ce).

Economic Overview Germany: Innovation

Source: Eurostat 2011

Germany 20%

France 18%

UK 15%

Portugal 3%

Sweden 3%

Poland 4%

Italy 6%

Spain 8%

Others (18 EU countries) 20%

Netherlands 3%

National Share of Researchers in EU-27 2009

“As a global company, Alcatel-Lucent relies on

Germany’s excellent R&D landscape. A culture

of effi ciency, creativity, and entrepreneurship

creates the ideal environment for us to innovate.”Alf Henryk Wulf, Chairman of the Board, Alcatel-Lucent Deutschland AG

Economic Overview Germany www.gtai.com

Ireland

UK

Russia

FinlandSweden

Norway

France

Spain

Portugal

Italy

Poland

GERMANY

Malta

Greece

Denmark

Czech Republic

Austria

SwitzerlandRomania

Netherlands

Belarus

Ukraine

Turkey

SerbiaBulgaria

Lithuania

Latvia

Estonia

Bosnia-Herzegovina

Slovak Republic

Hungary

RU

Moldova

Macedonia

Albania

Croatia

Slovenia

Montenegro

Dublin

London

Lisbon

Madrid

Paris

Luxembourg

Berlin

Belgium

Brussels

Amsterdam

Copenhagen

Oslo

Stockholm

Helsinki

Moscow

Minsk

Tallin

Riga

Vilnius

Warsaw

Kiev

Chisinau

Bucharest

Sofi a

Ankara

Athens

Tirana

Skopje

Belgrade

Rome

Valletta

Bern

Sarajevo

Zagreb

Ljubljana

Vienna

Budapest

Bratislava

Prague

Podgorica

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Germany: At the Crossroads of Europe

Situated at the market crossroads of Europe, Germany’s optimal geographic

location is beyond question: over half of the EU population lives within 500

kilometers of Germany’s borders; more goods pass through Germany than

any other European country; and almost all of Europe is reachable within

three hours by air or 24 hours by road.

Kosovo

Pristina

Economic Overview Germany www.gtai.com

Industrial Focus of Networks of Competence

Biotechnology

Micro-Nano-Opto

Production and Processing

Transport and Mobility

Health and Medicine

Energy and the Environment

New Materials and Chemicals

Information and Communication

Aerospace

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Greifswald

Berlin

Dresden

ChemnitzJena

Cham

Munich

Bayreuth

Erlangen

Gerbrunn

Hanau

Darmstadt

Freising

Regensburg

MartinsriedGilching

Weßling

Augsburg

Göppingen

Oberkochen

Neumarkt

Freiburg

Stuttgart

Fellbach

Heidelberg

Karlsruhe

SaarbrückenKaiserslautern

Wörstadt

Wiesbaden

Bonn

Nuremberg

Kassel

GöttingenPaderborn

Bielefeld

Hanover

Gatersleben

Braunschweig

Vechta

Achim

Oldenburg

Bremerhaven Stade Hamburg

Lübeck

Aachen

Remscheid

Düsseldorf Lüdenscheid

Wuppertal

UnnaDortmund

Duisburg Velbert

Potsdam

Networks of Competence in Germany

The Kompetenznetze Deutschland (“Competence Network Germany”) initiative

of the Federal Ministry of Economics and Technology brings together the best-

performing innovation clusters and networks in Germany. These are set up

according to nine industry-specific category groups spread across Germany.

The network helps promote international cooperation and international cluster

knowledge transfer.

Economic Overview Germany www.gtai.com

Economic Overview Germany www.gtai.com

Our Investment Project Consultancy Services

Germany Trade & Invest Helps You

Germany Trade & Invest’s teams of

industry experts will assist you in

setting up your operations in Ger-

many. We support your project man-

agement activities from the earliest

stages of your expansion strategy.

We provide you with all of the indus-

try information you need – covering

everything from key markets and

related supply and application sec-

tors to the R&D landscape. Foreign

companies profit from our rich ex-

perience in identifying the business

locations which best meet their spe-

cific investment criteria. We help

turn your requirements into concrete

investment site proposals; providing

consulting services to ensure you

make the right location decision. We

coordinate site visits, meetings with

potential partners, universities, and

other institutes active in the industry.

Our team of consultants is at hand

to provide you with the relevant

background information on Germa-

ny’s tax and legal system, industry

regulations, and the domestic labor

market. Germany Trade & Invest’s

experts help you create the appro-

priate financial package for your in-

vestment and put you in contact with

suitable financial partners. Incen-

tives specialists provide you with

detailed information about available

incentives, support you with the ap-

plication process, and arrange con-

tacts with local economic develop-

ment corporations.

All of our investor-related services

are treated with the utmost confiden-

tiality and provided free of charge.

Project Management Assistance

Coordination and

support of nego-

tiations with local

authorities

Joint project

management with

regional develop-

ment agency

Project partner

identifi cation

and contact

Market entry

strategy support

Business oppor-

tunity analysis and

market research

Location Consulting /Site Evaluation

Final site

decision support

Site visit

organization

Site preselectionCost factor

analysis

Identifi cation of

project-specifi c

location factors

Accompanying

incentives application

and establishment

formalities

Administrative

affairs support

Organization of

meetings with

legal advisors and

fi nancial partners

Project-related

fi nancing and incen-

tives consultancy

Identifi cation of re-

levant tax and legal

issues

Support Services

Decision & InvestmentStrategy Evaluation

Contact

Imprint

PublisherGermany Trade and Invest

Gesellschaft für Außenwirtschaft

und Standortmarketing mbH

Friedrichstraße 60

10117 Berlin

Germany

T. +49 (0)30 200 099-555

F. +49 (0)30 200 099-999

invest@gtai.com

www.gtai.com

Chief ExecutivesDr. Jürgen Friedrich, Michael Pfeiffer

AuthorsThomas Bozoyan, Market Intelligence Germany

Germany Trade & Invest, thomas.bozoyan@gtai.com

Dr. Hans-Peter Hüssen, Market Intelligence Germany

Germany Trade & Invest, hans-peter.huessen@gtai.com

Marc Lehnfeld, Market Intelligence Germany

Germany Trade & Invest, marc.lehnfeld@gtai.com

EditorWilliam MacDougall, Germany Trade & Invest

LayoutGermany Trade & Invest

PrintCDS Chudeck-Druck-Service, Bornheim-Sechtem

SupportPromoted by the Federal Ministry of Economics and Technology and the Federal

Government Commissioner for the New Federal States in accordance with a

German Parliament resolution.

Notes©Germany Trade & Invest, September 2011

All market data provided is based on the most current market information

available at the time of publication. Germany Trade & Invest accepts no liability

for the actuality, accuracy, or completeness of the information provided.

Order Number14783

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Germany Trade & InvestFriedrichstraße 60

10117 Berlin

Germany

T. +49 (0)30 200 099-555

F. +49 (0)30 200 099-999

invest@gtai.com

About Us

Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. The organization advises and supports foreign companies seeking to expand intothe German market, and assists companies established in Germany looking to enter foreign markets.

All inquiries relating to Germany as a business location are treated confi dentially. All investment services and related publications are free of charge.

Promoted by the Federal Ministry of Economics and Technology and the Federal Government Commissioner for the New Federal States in accordance with a German Parliament resolution.

www.gtai.com