ECONOMIC OVERVIEW GERMANY:

ECONOMIC OVERVIEW GERMANY:

Market, Productivity, Innovation

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Economic Overview Germany 2015/16 www.gtai.com

ECONOMIC OVERVIEW GERMANY

P ho to : i sto ck ph ot o. co m – ©C la udi a D ew al d BASIC DATA Area: 357,340 sq. km Population (m.): 80.9 Number of companies 3.7 million, 99.6% SMEs Total turnover of all companies (2012) EUR 6.1 trillion, 35% SME turnover

ECONOMIC DEVELOPMENT

GDP (nominal in EUR billion) 2014: 2,904; 2013: 2,810; 2012: 2,750

Per capita GDP (EUR) 2014: 35,247; 2013: 34,219; 2012: 33,569 Inflation rate 2014: 0.8%; 2013: 1.6%; 2012:2.1% Unemployment rate 2014: 5.0%; 2013: 5.2%; 2012:5.5% GDP GROWTH 1.5 1.0 0.5 0 2012 2013 2014

(real annual change in percent)

0.4 0.1

1.6

GDP FORMATION 2014

FOREIGN TRADE (EUR BN)

2014 2013 2012 Exports Imports Balance 1,134 917 +217 +3.7% +2.0% 1,093 898 +195 -0.2% -0.8% 1,096 906 +190 +3.4% +0.7%

GERMANY’S TRADE RELATIONS WITH EU (EUR BN)

2014 2013 2012 Exports Imports Balance 604 633 -28.5 +3.2% +3.9% 585 609 -23 -1.2% -0.3% 593 611 -18 +2.5% -0.7% Export goods (2014):

Machinery 18.1%; motor vehicles and parts 17.1%; chemical goods 15.7%; electronic goods 9.1%; metal goods 8.1%; foodstuffs 4.5%; others 27.4% Import goods (2014):

Chemical goods 12.7%; machinery 12.3%; crude oil and gas 12.1%; electronic goods 10.1%; motor vehicles and parts 8.3%; metal goods 7.6%; foodstuffs 6.0%; others 30.9%

Sources: Germany Trade & Invest, Federal Statistical Office, Federal Ministry of Finance, ifm Bonn 2015 Manufacturing Industries 22.2% Construction 4.8% Commerce, Transportation, Catering 15.4% Information & Communication 4.7% Financial Services,

Renting, Business Services 26.0% Others 26.9%

PAVING THE WAY

FOR FOREIGN DIRECT

INVESTMENT

FIRST CHOICE BUSINESS LOCATION Ernst & Young’s “European Attrac-tiveness Survey 2015” confi rms Ger-many’s reputation as one of the most attractive business locations in the world. International decision makers ranked Germany first within the EU, and third worldwide in the “most attractive business location” cate-gory. A substantial 42 percent of the 800 plus international manag-ers surveyed consider Germany to be western Europe’s foreign direct investment (FDI) magnet.

The AmCham Business Barometer 2015 highlights the positive regard in which US companies active in Ger-many hold the country. Asked about their opinion on the German busi-ness environment, 90 percent of US company respondents expressed satisfaction. Sixty-six percent are convinced that Germany will either improve or maintain its competitive edge in the future.

FREE AND OPEN MARKETS

Germany has a welcoming attitude towards 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. G e r m a n l a w m a ke s n o d i st i n c -tion between Germans and foreign nationals regarding investments or the establishment of compa-nies. The legal framework for FDI in Germany favors the principle of freedom of foreign trade and pay-ment. There are no restrictions or barriers to capital transactions or currency transfers, real estate purchases, repatriation of profits, or access to foreign exchanges.

SUPPORTING INVESTMENT PROJECTS

Incentives in Germany are designed to meet the immediate capital needs of investors. Early stage investment financing 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 investment incentives are made available in the form of a raft of programs created to sup-port putting together a workforce in Ger many (e.g. through w age subsidies) and provide generous R&D projec t as sis tance. Incen-tives in Germany are available to all investors – regardless of inves-tor country of provenance. Funding to the tune of more than 19 billion has been freed up by the EU (co-financed using means obtained from German federal and federal state budgets) for the period 2014 to 2020. As well as this, Germany and its individual federal states also make their own incentives funds available to prospective investors.

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www.gtai.com/incentives

GLOBAL FDI MAGNET

According to the United Nations Con-ference on Trade and Development (UNCTAD), Germany ranks among the world’s leading countries for for-eign direct investments with EUR 612 billion in inward FDI stocks in 2014. This represents a growth of 174

per-cent since 2000.

According to official Bundesbank (German Central Bank) statistics for 2013, 56 percent of all FDI stocks in Germany originate from within the EU; with a further seven percent derived from the remaining Euro-pean non-EU countries. Investments from outside the EU continue to grow. North America accounts for 21 per-cent of FDI stock, while Asia holds a 10 percent share.

FOREIGN DIRECT INVESTMENT

Economic Overview Germany 2015/16 www.gtai.com

AMCHAM BUSINESS BAROMETER 2015

American business executives highlighted the following fi ve factors as the top location advantages that distinguish Germany from its competitors.

Skilled workers Supply chain networks Research & Development Infrastructure

Market potential

Economic Overview Germany 2015/16 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 2010 and 2014, fDi Markets recorded a total of 4,142 investment projects from almost 3,500 foreign companies. In 2014, around 800 proj-ects were recorded - one of the best results achieved to date. Germany ranks fourth internationally in terms of FDI projects attracted.

The most important countries as sources for new investment proj-ects are the USA (21 percent of all investment projects), Switzerland (11 percent), and the UK (nine per-cent) respectively. In 2009, China emerged as a major source of invest-ments, rising to the most important Asian source country for greenfield FDI projects in Germany. The high level of Chinese investment has been maintained since then, mak-ing Germany the world's number one location for Chinese greenfield investments.

DIVERSE INDUSTRY OPPORTUNITIES

According to fDi markets, foreign companies invested in 39 different sectors – underlining Germany’s highly diversified economy. Most new investment projects were real-ized in the ICT & software industry (18 percent of new projects), business and financial services (15 percent) were close behind.

Most new projects open sales and marketing & support offices. One in eight investment projects is manufac-turing-site located – making this still a very important business activity in Germany.

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FDI PROJECT SHARE IN GERMANY BY SECTOR 2010-2014

Source: fDi Markets 2015

Source: fDi Markets 2015

FDI PROJECT SHARE IN GERMANY BY BUSINESS ACTIVITY 2010-2014

0 5 10 15 20 25 30 35 40

Sales, Marketing & Support Business Services Manufacturing Headquarters Logistics, Distribution & Transportation

Retail 42% 15% 11% 5% 5% 11% Other Activities 11%

ICT & Software 18%

Industrial Machinery & Equipment 11%

Business & Financial Services 15%

Textiles 10% Consumer Goods (incl.

Food & Beverages) 8% Chemicals, Plastics, Paper 8%

Electronics & Semiconductors 7% Transportation, Storage & Logistics 5%

Healthcare, Pharma, Biotechnology 5% Energy, Minerals, Metals 4% Automobile 4% Other Sectors 5%

EUROPE’S

ECONOMIC HUB

EUROPE’S LARGEST MARKET Germany is the largest market in Europe. It constitutes 21 percent of European GDP, and is home to 16 per-cent of the total European Union (EU) population. The German economy is both highly industrialized and diversi-fi ed; with equal focus placed on ser-vices and production.

STABLE ECONOMY

Germany is widely considered to be the economic stabilizing force in Europe - particularly within the Euro-zone. Between 2010 and 2014, EU-28 real GDP grew by less than one per-cent. During the same period, the Ger-man economy grew at a rate of around two percent, with Germany's real GDP growth rate higher than that of France, Italy, and the UK. The German govern-ment expects an upswing of 1.8 per-cent in 2015.

GLOBAL PLAYER

Germany’s products continue to be export hits worldwide. Offering inno-vative and competitive products of the highest quality, it is not surpris-ing that, since 2010, Germany’s aver-age export quota has amounted to 39 percent. In 2014, German export levels reached EUR 1.1 trillion – compared to imports of EUR 917 bil-lion –with the trade balance reach-ing a record value of EUR 217 billion. 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.

Sixty-eight percent of all exports are exported to European countries, of which 58 percent go to EU mem-ber states. In 2014, the nummem-ber two region for German exports was Asia; receiving approximately 17 percent of all goods from Germany, followed by the Americas at 12 percent. MANUFACTURING LOCATION GERMANY

German companies represent ten percent of European manufacturing companies and generate 28 per-cent of total EU turnover in the sector. In fact, the manufacturing sector represents more than one fifth of Germany’s “value added” – one of the highest shares in Europe. Increasingly more foreign companies are placing their faith in Germany as a vital production site location, and are benefiting from the country’s excellent business framework and superior productivity rates.

SMEs: GERMANY’S ECONOMIC BACKBONE

Exports are driven by Germany’s backbone of highly innovative small and medium-sized enterprises (SMEs). These constitute 99.6 percent of all companies, employing almost 80 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-28) Population

(in million) Share of Total Population (EU-28) Germany 2,904 21% 81 16% UK 2,223 16% 64 13% France 2,132 15% 66 13% Italy 1,616 12% 61 12% Spain 1,058 8% 47 9% Netherlands 663 5% 17 3% Poland 413 3% 38 8% Czech Rep. 155 1% 11 2% EU-28 13,920 507 Eurozone 10,067 72% 337 67% USA 13,112 319 China 7,789 1,364 Japan 3,477 127

SHARE OF TOTAL GDP AND POPULATION IN THE EUROPEAN UNION 2014

Source: Germany Trade & Invest, Eurostat, World Bank 2015

CLOSER TO MARKET

WITH FIRST CLASS

INFRASTRUCTURE

EUROPE’S GLOBAL LOGISTICS HUB With state-of-the-art transporta-tion networks (road, rail, sea, and inland waterways) as well as a dense network of national and inter-national airports, Germany pro-vides easy access to domes tic and international markets. As a truly global logistics hub, more goods pass through Germany than any other country in Europe. Its approx-imately one quarter share of the European logistics market (EU-28, Norway and Switzerland) reflects Germany’s role as the major pla-yer in the continent’s economy. WORLD CLASS TRANSPORT INFRASTRUCTURE

Germany’s infrastructure excel-lence is confirmed by a number of recent studies including the Swiss IMD’s World Competitiveness Year-book and various investor surveys conducted by institutions includ-ing the World Economic Forum (WEF) and Ernst & Young. The 2014 Logistics Performance Index of the World Bank ranked Germany first worldwide for its logistic profi-ciency; singling out Germany’s quality of trade and transport infra-structure. Accumulated in this score for Germany are high marks for the quality of roads and air transport, excellent railroads and port infra-structure, as well as its information infrastructure.

WORLD CLASS NETWORK INFRASTRUCTURE

Among the highlights of the coun-try’s network infrastructure are Europe’s second largest port mea-sured in container por t traffic (Hamburg), Europe’s largest port container terminal (Bremerhaven) and over 250 inland ports. Germany has a dense network of airports, of which 21 are international airports. Of these, 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 37,860 km of railway track being almost enough to cir-cle the globe. Germany’s high-speed railway network, with speeds of up to 300 km/h, is the fourth largest in the world.

LOGISTICS GIANTS

Not only is Germany’s logistics infra-structure among the best, its compa-nies are also global logistics leaders. In fact, the world’s leading 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 EUR 230 billion in 2013 make Ger-many Europe’s logistics leader. No other EU country comes close to Ger-many’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 Germany 2 Netherlands 3 Norway 4 UK 5 Belgium 6 Sweden 7 Switzerland 8 France 9 Luxembourg 10 Ireland QUALITY OF INFRASTRUCTURE IN EUROPE 2014

Source: World Bank Logistics Performance Index 2014

BRINGING EAST AND WEST TOGETHER

In 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 commer-cial ties with Switzerland and Aus-tria and direct road, rail and water links with the Balkan states. Turning eastwards, Germany’s borders with Poland and the Czech Republic also bring the Slovak Republic and Hun-gary within easy reach and make the more distant markets in Turkey and Russia readily accessible.

ECONOMIC OVERVIEW GERMANY: MARKET

INCREASING

COMPETITIVENESS

HIGH PRODUCTIVITY

Measured 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 2004 to 2013. This made the economy more com-petitive – particularly manufacturing. STABLE LABOR COSTS

At the same time, the labor cost gap between Germany and its eastern European neighbors has been sig-nifi cantly reduced. In fact, Germany has gained the labor-cost edge in recent years. Since 2004, wages have risen in most European coun-tries (EU-28), with the growth rate averaging 2.5 percent. While some countries – particularly those in eastern Europe – experienced a rise of more than fi ve percent, Ger-many recorded the lowest labor cost growth within the EU at just 1.8 percent. This has been another decisive argument in favor of Germany as a premium business location. EXCELLENT PRODUCTION STANDARDS

Germany’s high productivity is also closely linked to its excellent pro-duction process standards. This has been confirmed by a study of international executives conducted by the World Economic Forum (WEF). According to the study findings, Germany is seen as an EU country where the best and most efficient process technology is applied.

“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.”

ECONOMIC OVERVIEW GERMANY: PRODUCTIVITY

1=labor-intensive methods or previous generations of process technology 7=the world’s best and most effi cient process technology

Source: World Economic Forum 2014-2015

ASSESSMENT OF SOPHISTICATION OF PRODUCTION PROCESS 2014-2015

0% 5% 10%

Source: Eurostat 2015

LABOR COST GROWTH IN BUSINESS ECONOMY 2005-2014 (ANNUAL AVERAGE GROWTH IN PERCENT )

1.8% 2.3% 2.3% 2.6% 2.6% 4.3% 4.8% 5.3% 5.2% Germany France Netherlands Spain UK Czech Rep. Slovak Rep. Hungary Poland 0 1 2 3 4 5 6 7 6.4 6.2 6.1 6.1 5.7 5.5 4.9 4.6 4.2 4.1 Japan Germany Netherlands USA UK France Czech Rep. Spain Slovak Rep. Poland China 4.1 Hungary 3.9

HIGHLY SKILLED WORKFORCE Germany’s excellent workforce is decisive to the country’s high pro-ductivity rates. It comprises over 42 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 SYSTEM

In order to secure the economy’s demand for highly qualified per-sonnel, Germany developed a dual system in vocational training - com-bining the benefits of classroom-based and on-the-job training over a period of two to three years. There are currently more than 320 occu-pations recognized by the system. In close cooperation with the Ger-man government, the GerGer-man Cham-bers of Industry and Commerce (IHKs) and the German Confedera-tion of Skilled Crafts (ZDH) ensure that exacting standards are rigidly adhered to, guaranteeing the quality of training provided across Germany. One in fi ve German companies take part in the dual vocational training system, thereby turning apprentices into specialists who fi t each compa-ny’s individual needs. Most appren-tices receive an employment contract after training. In production-based industries more than 70 percent are taken on as employees, underlining the importance of the training system for companies. More than 1.3 million young people are currently in voca-tional training in Germany. Germa-ny's dual education system enjoys an unparalleled international reputation, being responsible for the lowest youth unemployment rate in Europe.

ENGINEERING EXCELLENCE

According to the German Federal Sta-tistical Offi ce, Germany has a partic-ularly high academic uptake rate. In the academic year 2014/2015, some 827,500 students – at more than 425 institutions of higher education – embarked on a course of academic study. Germany’s share of university students in the sciences, mathemat-ics, computer sciences, and engi-neering is the second highest in the EU, with 33 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 graduates with a doc-toral degree. With 328 PhD graduates per million inhabitants, it ranks fourth in a comparison of EU countries.

WORKFORCE IN GERMANY BY LEVEL OF PROFESSIONAL EDUCATION 2013 (PERCENT OF TOTAL WORKFORCE)

Source: Federal Statistical Offi ce, Federal Institute for Vocational Education and Training 2014 Skilled Craftsmen

(dual education system apprentices) 53%

Vocational College Graduates & Technicians (master craftsmen) 10%

Unskilled 18%

University Graduates19%

ECONOMIC OVERVIEW GERMANY: PRODUCTIVITY

DUAL EDUCATION SYSTEM

APPRENTICESHIP Training contract between

company and apprentice

State-recognized training occupation 1-2 days training 3-4 days training

Source: Germany Trade & Invest 2015

(based on: DIHK, Federal Ministry of Education and Research, Federal Statistical Offi ce 2013)

COMPANY - pays remuneration for apprentice - training by company employee as certified trainer of apprentice PUBLIC TRAINING SCHOOL

- funded by federal state - 2/3 vocational subjects

HIGH INNOVATION

RATE

INNOVATION LEADER GERMANY Signifi cant sums are invested in the development of new technologies and innovations. Total R&D expen-diture of almost EUR 80 billion in 2013 makes Germany Europe's big-gest research spender. Since 2009, R&D expenditures have steadily increased at a compound annual growth rate of 4.4 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. More and more com-panies are establishing interna-tional research facilities in Germany. Between 2010 and 2013, R&D FDI stocks in Germany grew by 85 per-cent to EUR 740 million.

DIVERSE INNOVATION LANDSCAPE Industrial research reflects Germa-ny’s key source of innovation. Domes-tic companies invested almost EUR 54 billion in developing new tech-nologies for competitive products in 2013. Five of the EU’s top ten R&D companies are German enterprises, with Volkswagen leading the rank-ing. Germany’s innovation landscape represents various research play-ers, with industry a major player in contract research. In 2013, com-panies invested almost EUR 15 bil-lion in third-party (i.e. contract) research. Today, successful research in Germany is based on efficient cooperation between companies, uni-versities, and research organizations. A national cluster network combines cooperative research along the value chain with traditionally strong and world-leading industries.

LOCATION ADVANTAGE: INNOVATION VALUE ADDED

Germany’s innovation profi le is dom-inated by manufacturing indus-try spending; with EUR 45.7 billion in outgoings equivalent to around 85 percent of the private economy’s internal R&D expenditure. Many of these high-tech industries have a signifi cant impact on domestic eco-nomic performance. The most recent data issued by the German Institute of Economic Research (DIW) finds that no other industrialized coun-try produces a larger share of gross value added in high-tech industries. A broad base of foreign investors in R&D underlines Germany’s strong position. According to a DIW study, more than 90,000 employees work in R&D in foreign-owned German sub-sidiaries. With an annual R&D budget

of EUR 13.2 billion, these companies account for more than 26 percent of total industry innovation expenditure. Most R&D facilities are still operated by European and US companies. HIGH-TECH PRODUCTS MADE IN GERMANY

German companies are global lea-ders in the development of new technologies. The “Made in Germany” brand has been a seal of quality for over a century. In 2013, Germany exported high-tech goods to the value of EUR 145 billion – making it the top high-tech goods exporter in Europe and second worldwide.

ECONOMIC OVERVIEW GERMANY: INNOVATION

RESEARCH-INTENSIVE INDUSTRIES SHARE OF GROSS VALUE ADDED 2012

Note: High-tech industries are characterized by high internal R&D expenditures of between 2.5%-7% of the average OECD turnover; Cutting-edge technologies show an internal R&D intensity of more than 7% of the average OECD turnover; Source: German Institute of Economic Research (DIW) 2015

14 12 10 8 6 4 2 0

Germany Japan USA UK

10 .6 % France 8. 2% 2. 4% 7. 5% 4.5 % 3.1 % 5.0 % 1.9 % 3.1 % _3.7% 1. 7% 2.0 % 2. 4% 1. 3% 1.1 %

Research-intensive industries (total) High-tech industries

Cutting-edge technologies

The country is also one of the lead-ing European nations in triadic pat-ents (patpat-ents registered at the three major global patent offices: the European Patent Offi ce, the United States Patent and Trademark Offi ce, and the Japan Patent Offi ce).

PROFITING FROM INNOVATION CLUSTERS

Innovation does not exist in splen-did isolation for German companies. Non-unversity research institutes, universities and companies all work together in numerous clusters throughout the country to improve or invent new products, services, and processes. To this end, the German Federal Government has been pro-viding targeted fi nancial support for 20 years.

Universities and non-university research institutions also serve as innovative partners to indus-try. According to the German Fed-eral Statistical Office, universities invested approximately EUR 14.3 bil-lion in R&D in 2013. Germany’s four globally renowned non-university research foundations - Max Planck, Fraunhofer, Helmholtz, and Leibniz - also boasted an overall research bud-get of around EUR 9 billion for the same year. With more than 71,200 full-time equivalent research per-sonnel working at more than 250 institutes, these organizations are involved in a broad spectrum of research projects; covering every-thing from fundamental to applied science.

PUBLIC R&D SUPPORT:

GERMANY’S HIGH-TECH STRATEGY The High-Tech Strategy promotes

the advancement of new technol-ogies by creating synergy effects bet ween industr y and institu-tional research. Most programs within the framework of the High-Tech Strategy promote partner-ships between different project partners – particularly enterprises and research institutes – in order to bring together institutional research and entrepreneurial exper-tise. R&D projects can accordingly count on generous fi nancial support in the form of R&D grants. Interest-reduced loans and special partner-ship programs complete Germany’s public R&D project support.

WORLD CLASS KNOW-HOW

While Germany is home to the lar-gest population of researchers in Europe (21 percent of all EU scien-tists live and work in Germany), German scientists work on proj-ects all over the world. Research results obtained by the Max Planck Society, for example, are achieved through fruitful partnerships with some 5,400 partners in research institutions in more than 120 coun-tries. Cooperation projects between companies and academic research institutes provide an effi cient way to close knowledge gaps. Scientists can be easily integrated into the company team of developers and researchers and, increasingly, institutes provide for the necessary laboratory facilities. EUROPEAN PATENT LEADER

With almost 13,100 patents granted at the European Patent Offi ce in 2014, Germany’s share of patents is almost twice that of France and the UK combined. This shows the commer-cial viability of innovations made in Germany. Source: Eurostat 2015 Germany 21% UK 15% France 15% Portugal 3% Sweden 4% Poland 4% Italy 7% Spain 7% Other EU-Countries 20% Netherlands 4%

NATIONAL SHARE OF RESEARCHERS IN EU-28 2013

“Germany is not only an attractive market, but it is also

extremely strong on research and development. This is

why I brought my R&D activities and marketing

opera-tions over to Germany from Switzerland.”

Zeng Quiping, CEO and founder of IDENCOM

ECONOMIC OVERVIEW GERMANY: INNOVATION

Ireland UK Russia Finland Sweden Norway France Spain Portugal Italy Poland GERMANY Malta Greece Denmark Czech Republic Austria Switzerland Romania Netherlands Belarus Ukraine Turkey Serbia Bulgaria 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 Tallinn Riga Vilnius Warsaw Kiev Chisinau Bucharest Sofi a Ankara Athens Tirana Skopje Belgrade Rome Valletta Bern Sarajevo Zagreb Ljubljana Vienna Budapest Bratislava Prague Podgorica <12 h < 24 h by truck 15 h > 30 h by train > 1.5 h > 3 h by plane > Cart ogr aphy: www .fot olia.de – ©António Duart e Sour ce: ©Germany T

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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.

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R&D EXPENDITURE BY FEDERAL STATE EQUIVALENT COUNTRY 2013 NORTH SEA BALTIC SEA CZECH REPUBLIC POLAND THE NETHERLANDS BELGIUM FRANCE LUXEM-BOURG

Source: Germany Trade & Invest research based on Federal Statistical Offi ce, Eurostat 2015

C ar to gr ap h y: ©ro cc omon to ya – is to ck ph ot o. com Baden-Württemberg ≙ Italy Bavaria ≙ Spain + Portugal Saarland ≙ Luxembourg Rheinland-Pfalz ≙ Portugal North Rhine-Westphalia ≙ Netherlands Hessen ≙ Finland

Saxony ≙ Czech Republic Thuringia ≙ Hungary Hungary

Saxony-Anhalt ≙ Baltic States Niedersachsen ≙ Norway Mecklenburg-Vorpommern ≙ Slovak Republic Schleswig-Holstein ≙ Hungary Hamburg ≙ Bulgaria+Romania+Hungary

Bremen ≙ Baltic States

Berlin ≙ Poland Brandenburg ≙ Slovenia

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Fr

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UK

INNOVATION “MADE IN GERMANY”

Germany invests signifi cantly in fast-developing tech-nologies. With a 2013 R&D investment level of almost EUR 80 billion, Germany invested the combined in-novation expenditures of the UK (EUR 33 billion) and France (EUR 47 billion) put together. Technology trans-fer between universities, non-university research or-ganizations, and companies takes place in highly spe-cialized technology clusters located across the country.

Individual federal state research budgets often corres-pond with those of other European countries. Bavaria’s R&D spending, for example, is comparable with the combined investments of Spain and Portugal, while North Rhine-Westphalia invests almost as much as the Netherlands.

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. For-eign companies profi t from our rich

experience in identifying the busi-ness locations which best meet their specifi c investment criteria. We help turn your requirements into concrete investment site proposals; provid-ing consultprovid-ing 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 appropriate financial package for your invest-ment and put you in contact with suitable financial partners. Incen-tives specialists provide you with detailed information about avail-able incentives, support you with the application process, and arrange contacts with local economic devel-opment corporations.

All of our investor-related services are treated with the utmost confi den-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 preselection Cost 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

relevant tax and legal issues SUPPORT SERVICES

DECISION & INVESTMENT

STRATEGY

EVALUATION

ECONOMIC OVERVIEW GERMANY: SERVICES

COMPLETE YOUR PROJECT MANAGEMENT NEEDS FROM OUR RANGE OF INVESTMENT AND ONE-STOP PROJECT CONSULTANCY SERVICES.

CONTACT

IMPRINT

PUBLISHER

Germany 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 [email protected] www.gtai.com EXECUTIVE BOARD

Dr. Benno Bunse, Chairman/CEO Dr. Jürgen Friedrich, CEO

AUTHORS

Thomas Bozoyan, Market Intelligence Germany Germany Trade & Invest, [email protected] Dr. Hans-Peter Hüssen, Market Intelligence Germany Germany Trade & Invest, [email protected] Marc Lehnfeld, Market Intelligence Germany

Germany Trade & Invest, [email protected] EDITOR

William MacDougall, Germany Trade & Invest LAYOUT

Germany Trade & Invest PRINT

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yan llig nte et I Mark ence Ger man y thom as. boz oya n@ gta i.c om T. + 49 ( 0)3 0 200 0 99-502 F. + 49 ( 0)3 0 200 0 99-9 99 For mor e in for mat ion on G erm any' s e conom y an d it s in ves tm ent oppor tun itie

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Germany Trade & Invest is the economic development agency of the Federal Republic of Germany. The company helps cre-ate and secure extra employment opportunities, strengthening Germany as a business location. With more than 50 offices in Germany and abroad and its network of partners throughout the world, Germany Trade & Invest supports German compa-nies setting up in foreign markets, promotes Germany as a business location and assists foreign companies setting up in Germany.

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