Sector Report: Logistics VOL 02 | 08.2008
INVEST IN GERMANY MAGAZINE The global IT giant IBM is well-known for its innovativ
Germany’s Green Car Revolution xxx
Welcome Address
6 More than a year ago, we published an issue entitled “Good Times: The Booming German Economy.” Since then, the world economy has entered into a phase of uncertainty. And yet the upswing in Germany has been so strong that our title still holds true today. This makes us not only happy but also optimistic for the remainder of the year. Our partner institution, the German Office for Foreign Trade, has analyzed the trade statistics for the first months of the year and forecast that Germany will retain its export world 13 champion position in 2008 – a title many predicted would have been lost by the end of the year.
Success Story
Three World Market Leaders, One Vision.........................................................3 Major Investment
Saudis Invest EUR 200 Million in NRW...........4 Turbocharger: Performance and Exhaust Gas Efficiency....................................5 Cover Story
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The German Automotive Industry: Driving in the Innovation Fast Lane............ 6/9 Industry Report: Stationary Fuel Cells: Great Investment Possibilities...................... 10 German Logistics Go Green.......................... 11 Bio-Boom: Lifestyle Concerns Change Food Market in Germany................. 12 The Philadelphia Story: Germans Win Biotech Awards in USA.......... 13
The constantly increasing number of important foreign investments in Germany is also a good sign. Research in Motion Ltd. (RIM), the manufacturer of the popular BlackBerry convergent mobile device, has announced that it will locate its European R&D center in the city of Bochum in North Rhine-Westphalia. IHI Charging Systems International, a joint venture between Daimler and Japan’s IHI Group, has begun construction on a new production plant for turbochargers in Thuringia, and Kenersys GmbH (part of the Indian wind energy Kalyani Group) plans significant investment in a wind turbine plant in Mecklenburg-Vorpommern. These are just a few examples of recent foreign investment activities. Invest in Germany has also been hard at work on a number of exciting new projects attracting inward investment in sectors such as renewable energies, logistics, foodstuffs, electronics, and life sciences.
Foreign Direct Investment
Chinese Investors Discover the Advantages of Germany............................14/15 Foreign Investments in Eastern Germany....................................... 17 German Business
Starting Over: How Germany's Startups Got Their Groove Back..............18/19 Porsche Tops Recent Image Ranking................................................20 The Unsung Heroes of Engineering Breakthroughs.....................21 Out of Time......................................................22 Top Science and Research Location
Making Stem Cell Research More Competitive...........................................23
Our service to you will be significantly enhanced by the cooperation agreement which we recently signed with the German Bi-national Chambers Abroad (AHK). The 120 foreign offices of the AHK worldwide will be your new point of contact in all investment-related matters as well. We will be sharing our experiences with the staff of the AHK to ensure that you receive comprehensive information should you have an interest in investing in Germany. I hope the latest issue of our magazine – with its cover story about the sustainable solutions of the German automotive industry, a selection of success stories, industry reports, R&D stories, and innovation news – makes for interesting and informative reading. If you like what you read, please don't hesitate to contact us for further information. Michael Pfeiffer Managing Director
Top Science and Research Location
Unearthing Golden Nuggets.........................24 Shine a Light-Laser Technology in Germany......................................................25 Alma Matters: German Universities’ Pursuit of Excellence.....................................26 The Little University with the Big Reputation..........................................27 Innovative Germany
Innnovation News..................................... 28/29 A Sneak Preview into the Future............. 30/31 Project DEUS 21 – Happy When it Rains.............................................................32 Germany and the Germans
Typically German!...........................................33 About Us – Our Events
How the West Was Won..................................34
On the cover:
Vehicles with fuel cells like this Mercedes-Benz F600 Hygenius concept car, can also provide electricity for households. © Mercedes Benz
Publisher: Invest in Germany GmbH Friedrichstraße 60 10117 Berlin Phone: +49 (0)30 200 099-0 Fax: +49 (0) 30 200 099-111 office@invest-in-germany.com www.invest-in-germany.com Managing Director: Michael Pfeiffer Chairman of the Supervisory Board: Michael Glos, Federal Minister of Economics and Technology
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Director Public Relations: Eva Henkel Editor: Eva Forinyak Language Editor: William MacDougall Design: www.typoly.de (Art: Inken Greisner) Litho: Dietsche & Gebhardt, Berlin Print: Medialis Offsetdruck GmbH, Berlin
Distribution: Invest in Germany Magazine is jointly distributed in North America and Asia by the Financial 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 information. Articles published under specific names do not necessarily reflect the opinion of the editors.
Photo: Christian Hüller
Imprint
Success Story
Three World Market Leaders, One Vision In 2005, US company Evergreen Solar, Norwegian firm Renewable Energy Corporation (REC), and Germany’s Q-Cells established EverQ in Thalheim, Saxony-Anhalt. The joint venture proved to be a commercial hit and a shining example for successful international cooperation in the solar sector.
Melting furnaces in the EverQ workfloor
Photo: EverQ
The three stock exchange-listed world solar sector market leaders are equal partners in the enterprise. The companies enjoy a 33.33 percent shareholding as well as bringing their respective knowhow to the table. As the world's largest producer of silicon and wafers for photovoltaic devices, REC guarantees a steady supply of silicon to the venture. Evergreen Solar brings its internationally unique String-Ribbon™ wafer production technology to the proceedings, with Q-Cells contributing its considerable precision production know-how. Q-Cells, the world’s biggest manufacturer of solar cells, and EverQ are the main forces behind the rapid growth of the solar sector in the Solar Valley of Thalheim, at Bitterfeld-Wolfen in SaxonyAnhalt. The company manufactures wafers, cells, and solar modules under the brand name Evergreen. “The integrated production differentiates us from most other companies in the solar sector,” says Guido Willers, process engineer at the R&D division under construction. EverQ relies for the most part on the patented
String Ribbon™ technology (employing a silicon-saving procedure) of Evergreen Solar to produce wafers. ”The technology counts among the most innovative and has a promising future in the solar industry. The wafer created in this way, consists of polycrystallized silicon, which is much more efficient than so-called thin film cells, with little silicon consumption,” explains Willers. Thanks to the solar technology, a bright future awaits Thalheim. In the last few years 3,000 high-skilled jobs have been created; by 2012 more than 10,000 people will be active in the solar industry throughout the region. “The specific advantages of the Bitterfeld region played a significant part in the location decision and subsequent extensions,” says Hans Jörg Axmann, chief technology officer of EverQ. “The qualified and motivated employees with experience of the industry, the very good industry infrastructure, non-bureaucratic public authorities at the local and state level, and excellent transport connections to the airport and the interstate
highway all contributed to create the general conditions necessary for successful further development.” Preparations are currently underway to list EverQ, with further measures to strengthen the management and the organization of the company also in place. “Our aim is to make EverQ independent from the joint venture partners and give it its own place in the market,” said Axmann. This will include manufacturing under its own brand name. The company is currently investing around EUR 150 million in a third production plant in Thalheim. From 2009, solar wafers, cells, and modules will also be manufactured at the third plant. In the course of the development, 500 extra jobs will be created, bringing the total work force to 1,500. The new solar factory will double total capacity to around 180 megawattpeak (MWp) per year. The ambitious goal of the fast-growing company is to produce around 600 MWp per year from 2012 – the equivalent of the annual electricity consumption of 120,000 four-person households.
Major Investment
Saudis Invest EUR 200 Million in North Rhine-Westphalia’s Chemical Future
Surveying a crane as it floats one of the final concrete pillars for the basic frame to its final resting place, SABIC Polyolefine GmbH Managing Director Jan van den Berg can rest assured that all is going according to plan: “The new plant in Gelsenkirchen is a central building block in our growth strategy. With it we increase not only our production volume and improve our cost base, but we can also react more specifically and individually to the material requirements of our customers.”
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The new plant has a total capacity volume of 250,000 tons of polymer granulate per year – enough to fill nearby Bundesliga football club Schalke’s 61,482 capacity Veltins Arena stadium to the roof. Two reactors capable of producing a broad range of synthetic granulate materials of different chain lengths and particle sizes form the centerpiece of the new bimodal polymerization facility. According to van den Berg, this provides an important competitive advantage: “The plant and our expert knowledge allow us to produce polymer granulate materials with excellent mechanical characteristics.” This will certainly prove useful in the fast-growing gas and water pipe market where material characteristics including impact strength, durability, and corrosion resistance are particularly important. Equally important to SABIC’s expansion plans is the Gelsenkirchen location itself. Gelsenkirchen-Scholven belongs to the ChemSite Initiative: a public-private partnership launched in 1997 by the chemical industry in the state of North RhineWestphalia. The initiative forms an um-
brella for all activities in the chemical industry value stream in the region, providing production locations for investors from the chemical, processing, and related industries. “We are part of an integrated refinery and petrochemical plant complex. As such, we profit in particular from the synergies available on the ground,” says van den Berg. The Dutchman considers GelsenkirchenScholven to be part of the company’s wider expansion plans. “We have optimal growth conditions here. In addition, our expansion plans are also supported by ChemSite.” Beside the obvious advantages of the Ruhr location for SABIC, van den Berg points to one further bonus: “The new facility will guarantee the future of the site and sends out a positive signal to the North Rhine-Westphalia economy.”
SABIC Polyolefine GmbH Managing Director Jan van den Berg
Photos: SABIC
One of the ten largest petrochemical companies in the world, Saudi Arabia’s SABIC (Saudi Basic Industries Corporation), is investing EUR 200 million at its state-of-the-art Gelsenkirchen-Scholven site to create one of the most modern plants for the manufacture of bimodal polyethylene. Polyethylene is a thermoplastic commodity widely used in consumer products. As one of the world’s leading manufacturers of chemicals, fertilizers, plastics, and metals, SABIC supplies the raw materials to those companies who manufacture the products essential to ordinary daily life.
The construction site of SABIC
Major Investment
Turbocharger by IHI
Turbocharger: Performance and Exhaust Gas Efficiency The turbocharger is part and parcel of modern engine development. It has proved a complete success in diesel engines. Now there is also talk of a breakthrough for the gasoline engine. When Swiss citizen Alfred Büchi registered a patent for turbocharging back in 1905, no one anticipated just how triumphant the technology would later become. But with the BMW 2002 Turbo hitting the market in 1973, and the Porsche 911 Turbo following one year later, the road to success was paved. Volkswagen and Audi rose to be the pioneers of turbo diesels and later turbo charged direct injection engines (TDI).
Photos: IHI-CSI
If diesel is increasingly an option for “fun motorization” today, then it is so thanks to torque thrust. Today it is almost impossible to buy a diesel without turbo. The situation is still slightly different with gasoline engines. Here the problem is the delayed response behavior (the so-called “turbo hole”) which is gradually being resolved. Bi-turbo concepts with two turbochargers which kick into action at different speed ranges are complicated but effective. The industry achieved a similar effect using variable geometry turbochargers (VGT) with adjustable guide blades. These have now become the technology state-of-theart for diesels. For gasoline engines this is not the case, as the exhaust gas temperatures are much higher than for diesel. As a result, very expensive materials must be used. To date, the only gasoline engine with VGT layout is the six-cylinder box in the Porsche 911 Turbo (997) which was developed with Borg Warner. The turbo provides a lot of driving fun. What makes it so interesting in terms of the current environment debate is that it allows engines to be made smaller – often referred to as “downsizing.” This means, for example, that BMW's three liter bi-turbo six cylinder engine has the same performance as the significantly bigger, normally aspirated V8. The same applies to engines of any size. Business is booming so much so that it is not only established providers like Honeywell, Borg
Warner, and IHI who are anticipating increased capacity. A new entrant, backed by two well-known names in the German supplier industry, has also made an appearance. Since spring 2008, the two suppliers have been operating under the name “Bosch Mahle Turbo Systems” to develop turbochargers for gasoline and diesel engines with the goal to begin mass production in 2010 or 2011. Borg Warner has invested EUR 81 million in new turbocharger factories in Thailand and Mexico and anticipates global demand to reach 27 million turbochargers within five years (40 percent above the 2008 level). A good example of how foreign investors in the supplier industry can benefit from the location advantages of Germany as a high technology country is provided by Japanese turbocharger manufacturer IHI. The ICSI (IHI Charging Systems International GmbH) joint enterprise established by Daimler AG and IHI has announced that it will build a EUR 45 million turbocharger factory in Arnstadt (Thuringia). The factory will have a workforce of 400 in the startup phase at the end of 2008, rising to 800 in the medium term, with further capacity build-up foreseen in research and development. ICSI managing director Hiromu Furukawa underlines the positive factors behind the site decision: “The location was chosen for its exceptional supply of expert manpower and other workers, especially in the fields of automobile construction, metal handling, mechanical engineering, and electrical engineering.” According to ICSI’s second managing director, Jörg Stein, the “possibility to cooperate with universities and research institutes from the state of Thuringia” was an additional reason for choosing the Arnstadt location. For more information about the topic please contact Mr. Robert Krauss, krauss@invest-in-germany.com
Interview
In a joint venture with Daimler, IHI is building a EUR 45 million plant in Arnstadt, Thuringia, to supply the auto industry with turbochargers. We spoke with Jörg Steins, general manager at IHI Charging Systems International, which is headquartered in Heidelberg. What are the prospects for turbocharging in the European auto industry? We see enormous growth in Europe. In a few years, we expect 80 percent of all gasoline engines to be turbocharged. The ratio will be similar to the diesel. And this trend will be reflected in China and North America as well. Where are your customers based? Our initial customer is located nearby in Eastern Germany, and the location, our own supplier base, and the skilled workers available here make it easier to achieve a smooth launch and rampup. We will start with a capacity of one million units annually, but on the site in Arnstadt, we can grow to up to four million units. Which other locations were considered? We considered various locations in Hungary, Poland, and Romania. To be sure, there is still a gap in labor costs, but it is closing. All factors included, the package in Arnstadt was the most attractive one.
Cover Story
The German Auto Industry: Driving in the Innovation Fast Lane It’s common knowledge that some of the fastest, most luxurious and best cars in the world are built in Germany. Less well known is the fact that many of the cleanest and most environmentally friendly cars are also built here. With its top-down strategy for environmentally friendly technologies, the premium segment is among the leaders on this front. sion reduction measures. Once the appropriate measures have been considered, the relevant technologies must be quickly developed and introduced. Porsche is a case in point. The sports car manufacturer is on the verge of a decisive breakthrough in the “hybridization” of its range of cars. Not only will there be a full hybrid SUV Cayenne, but the new Panamera high-performance sports sedan will also offer environmentally friendly hybrid technology to its customers. Typically, forward-looking innovation developments are introduced “top down” in the luxury car segment first. The benefits experienced in this segment are then passed on to the remaining vehicle class segments for the good of society at large.
Key components of a hybrid concept by Conti
Yet being first to market isn’t necessarily a guarantee for market success. Very often it is those players who manage the interaction between technological competence, cost-effective production, and market-focused pricing who emerge as winners. Volkswagen has proved this in recent years in the compact minivan (Touran), hardtop convertible (Eos), and most recently, in the compact SUV (Tiguan) segments. In each instance, Volkswagen was not the first to market, but it ended up at the top of each segment. A similar situation exists for innovations driven by climate and CO2 emis-
Graphic: Conti
Germany has played a pioneering role in driving auto innovations forward in recent decades. Technological advances made by the German auto industry read like a condensed history of the modern motor car. The Otto four-stroke engine. The diesel engine. The world’s first passenger cars (Daimler and Benz). History-making petrol and diesel fuel injection developments in the ‘50s. Porsche and Audi’s introduction of the fully galvanized body in the ‘80s. All of these milestone achievements stand as lasting tributes to German auto engineering vision.
To give another example, Daimler is making massive strides in the hybrid market with its Mercedes brand. According to the company’s chief engine developer, Dr. Leopold Mikulic, the company’s engine technology strategy is changing: “We will of course concentrate on alternative engines in the future. For example, combustion engines combined with hybrid engines. All of our engines will be ‘hybrid ready’ in the future, even those which we are bringing to the market in the near future.” Daimler is also paving the way forward to mass production of fuel cell vehicles. Daimler board chairman Dr. Dieter Zetsche says that a big advantage of fuel cell technology is that the components needed are identical to those of battery-driven electrical cars.
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Cover Story
The German general public is highly sensitive to environmental issues – fortunately. As a result, decision makers in politics and industry are quick to investigate and promote new and innovative solutions. The lead taken by the German auto industry and its successful supply industry (with Bosch and Continental in the front line) has played a crucial role in making “Europe” synonymous with environmentally conscious vehicles. Innovative steps taken by German manufacturers Volkswagen and Audi The company structure promotes cooperation between Wolfsburg and Ingolstadt. Volkswagen’s “BlueMotion” range of fuel efficient cars stand for consumption-lowering measures in the diesel sector, with the modular efficiency kit bundling measures with an integrated approach (such as economical engines, intelligently connected auxiliary units, lightweight construction, optimized aerodynamics, and advanced driver-assistance systems). Downsizing engines with the goal of reaching the performance levels of bigger, multi-cylinder engines
BMW pursues a specific path with its hydrogen combustion engine
with smaller engines will soon lead to the manufacture of high-performance gasoline engines with CO2 values below 140 g/km. As early as 1999 the Wolfsburgers had a thoroughly environmentally friendly car on the market. However, the Lupo 3L TDI was not well received on the market. The same holds true for the Audi A2; a groundbreaking full aluminium car which has suffered from a high sales price and a design which takes some time getting used to. Volkswagen and Audi’s engine transmission technology is four years ahead of the competition thanks to their dual-clutch transmission. BMW, Ford, and Volvo have only recently joined the rank of companies giving new momentum to this lower consumption and faster reaction transmission concept.
Photo: BMW; Graphic: VW
A forerunner: the three-liter VW Lupo 3L TDI, built from 1999 to 2005
BMW For many years the Bavarians seemed to be trendsetters with their hydrogen combustion engine, but the delayed deployment of a hydrogen filling station infrastructure – mostly due to cost reasons – has put a temporary damper on these ambitions. Besides that, the Bavarian car manufacturer has successfully developed its “efficient dynamics” concept. Initiated in 2003 and launched in 2007, it includes an innovation kit with its focus on brake-energy recovery, intelligent generator regulation, automatic stop-start function, and switch-point indicator. This has helped BMW cut fleet consumption by nine percent compared to the previous year. Board chairman Dr. Norbert Reithofer argues that ”nobody in the industry can match that.” In its first year, BMW sold 450,000 “efficient dynamics” concept vehicles in Europe. On hybrids, the Bavarians cooperate with Daimler and General Motors. The SUV X6 is the first BMW to receive a full-hybrid engine, while the 7 series sedan will come to market with a moderate hybrid solution. Mercedes-Benz The Swabians pursue different approaches to saving energy. One of them is MercedesBenzes “Blue Efficiency” vehicles with highly advanced exhaust gas treatment systems for diesel engines and fuel-saving start-stop systems for the A and B class. Hybrid technology is another. Soon, the S Class will get a mild hybrid system and the ML Class will be available as a full hybrid. Other quick implementation scenarios for environmental technologies are in the works (e.g. for the E Class volume model available from 2009). The high performance AMG sub-brand will undergo a green image change with hybrid versions of some of its products. According to a pledge made by AMG boss Volker Mornhinweg in March 2008, the extremely sporty AMG models will reduce CO2 emissions by up to 30 percent by 2012.
Cover Story
Porsche Cayenne Hybrid
Porsche The Stuttgarters’ environment package has taken shape in close cooperation with Volkswagen and Audi. The hybrid solutions of the Cayenne series are part of the package, as is a similar concept for the new Porsche Panamera. Lightweight construction, promoted in a number of special editions of the 911 range, will remain a trademark of the sports car manufacturer in the future. What the suppliers are doing
Testing a turbocharger
The National Organization for Hydrogen and Fuel Cell Technology (Nationale Organisation für Wasserstoff- und Brennstoffzellentechnologie – NOW) provides proof of the extent to which Germany is committed to the promotion of trendsetting technologies. NOW is a full subsidiary of the Federal Government with half its budget borne by the industry. Auto industry representatives include Volkswagen, Daimler, BMW, Ford, and General Motors/ Opel. Managing director Dr. Klaus Bonhoff explains the approach: “It is about creating as much value in Germany as possible and it is also our priority that hydrogen vehicles get on the streets in Germany.” (See interview overleaf.)
Germany is an excellent location to launch innovative and environmentally friendly technologies. The big manufacturers are constantly on the lookout for creative minds and innovative small and mediumsized companies to take up new ideas and develop them. Environmental topics are at the top of the list of innovations which can help redefine or strengthen brand images. When it comes to technological competence, the country where the car was invented has always been ahead of the rest. The German car industry is well aware of its responsibility, especially in the context of the current climate and environmental debate. For more information about this industry please contact Mr. Robert Krauss, krauss@invest-in-germany.com
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Photos: Porsche; Honeywell
Robert Bosch GmbH has accelerated development in the hybrid sector. Dr. Bernd Bohr, head of the automotive wing, says: “The hybrid will gain market share at the top end of the European market.” Overall, the Stuttgarters see the hybrid technology development with a sense of proportion. Bohr makes this clear with an example: ”Downsizing with a turbocharger and Lambda 1 direct injection is much cheaper than the expensive stratified direct injection technology.” Another affordable step for the OEM is start-stop systems, for which Bosch predicts market penetration of more than 50 percent in Europe in the near future. In addition, Bosch will soon manufacture turbochargers in cooperation with the supplier Mahle. From 2011, turbochargers will be supplied by an industry joint venture.
Cover Story
Interview
Dr. Klaus Bonhoff of the National Organization for Hydrogen and Fuel Cell Technology (Nationale Organisation für Wasserstoff- und Brennstoffzellentechnologie – NOW). How is NOW structured and what are its goals? Dr. Bonhoff: NOW is a federal government subsidiary, although half of our budget is provided by the auto industry. Companies involved include VW, BMW, Daimler, Ford, and GM. The overall budget for the innovation program for the next ten-year period is more than one billion euros. We want to promote research and development in order to demonstrate that this technology is suitable for everyday use. Hydrogen filling station set-up 1 tank 2 pump room 3 hydrogen pipe 4 dispenser
Photo: NOW; Graphic: Total
5 hydrogen return pipe
Does it only address German companies? We would like to create as much added value in Germany as possible, and it is an overriding wish of ours to see hydrogen vehicles on German streets. But foreign investors can get involved in a myriad of ways – even with complete systems. However, they will then have to indicate whether they are making a long-term commitment or whether they are interested only in componentdevelopment, integration services or production. When will hydrogen cars be ready for mass production? We assume it will be possible to manu facture cars with hydrogen engines – which are comparable with conventional cars in every way – in the thousands if not tens of thousands by around 2015. Are developments being concentrated in the area of fuel cells or is the focus still on the hydrogen combustion engine?
Both applications will be developed further, although BMW has publicly chosen to focus on hydrogen com bustion engines. On the other hand, other companies such as Daimler and Volkswagen are concentrating on fuel cells. There are many common interests. Take the filling station infra structure, for example. The goal to establish hydrogen as an alternative fuel unites all participants. Could the advances being made in battery technology make hydrogen as an energy source obsolete? Definitely not. Both are key tech nologies, and cars with fuel cells are basically considered to be hybrids. However, electrical cars will not be able to equal the range of the hydrogen car – and the charging time will remain a problem. It won't be possible to charge the batteries required in five minutes in the future either.
Industry Report
Stationary Fuel Cells: Investors See Great Possibilities in Emerging Industry
Germany has the largest fuel cell market in Europe, with over 350 active companies and institutes and 70 percent of all fuel cell demonstration units in Europe. Not surprisingly, the country boasts a strong
domestic market for fuel cells. Some figures: after this period, a sales volume for house energy supply of over 70,000 devices per year is to be expected as well as a growth in installed capacity of over 200 MW per year for industrial energy supply. An attractive market with a strong existing R&D environment, supplier network, a strong commitment of strategic cooperation partners like utilities, and an attractive legal framework are major selling points for Germany. The Combined Heat and Power Act as well as the Renewable Energies Heat Act and the Renewable Energies Sources Act promote the production of heat and electricity through decentralized energy systems like fuel cells. A further impulse has been given through the creation of an incentive program (with
cash incentives up to 1650 €/KWel) for small CHP units (up to 50 kWel) announced by the Federal Ministry for the Environment on 8 June 2008. Germany’s Ministry of Transport, Building, and Urban Affairs announced at the beginning of this year the creation of the NOW GmbH, which will be in charge of the coordination of the National Hydrogen and Fuel Cell Technology Innovation Program (NIP). The NIP, which has no equivalent in Europe, offers grants of up to 50 percent of R&D project costs. Over a ten-year period, NIP, together with industrial partners, will invest EUR 1.4 billion in fuel cell technology. Qualified employees, proximity to customers and suppliers, as well as support from the state government were reasons that the Australian company Ceramic Fuel Cells Ltd. (CFCL) chose the German state of North-Rhine Westphalia for its EUR 12.4 million manufacturing plant. In the town of Heinsberg, CFCL will assemble – over a five year period – 50,000 fuel cell systems that can be integrated into conventional boilers for use in low carbon heating or power systems. German firms such as Baxi Innotech and Vaillant GmbH, and the Swiss company Hexis AG, are currently engaged in pilot projects across Germany, with the installation of fuel cell heating systems in schools, seniors’ homes, and multi-family houses. In addition, the American company UTC recently announced the completion of major milestones at its stationary fuel cell system at a hospital in Bocholt, Germany. The NIP is planning to support further projects focusing on the installation of fuel cells for home energy supply and the use of biogas systems for industrial power generation, along with other fuel cell applications. Therefore, there is bound to be more exciting news emerging from this innovative industry. For more information about this topic please contact Mr. Raphaël Winkler,
Fuel cell stack made up of 60 planar components 10
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winkler@invest-in-germany.com
Photo: Forschungszentrum Jülich
The stationary fuel cell industry is becoming an attractive source of foreign investment in Germany. Stationary fuel cell technology refers to the use of fuel cell technologies to supply energy in the form of heat and power to industrial facilities and homes. This technology has a much higher efficiency than traditional energy production sources. Germany’s R&D benefits, the possibilities of the largest European market with many potential partners, its qualified workforce and geographic location are attractive reasons to invest.
Sector Industry Report: Report Logistics
About xx The global IT giant IBM is well-known for its innovativ
xxx
German Logistics Go Green
Photo: Sky Sails
German logistics companies – large and small – are working even harder to reduce their carbon footprints Generating over EUR 200 billion annually, Germany’s logistics industry is Europe’s largest and the backbone of the nation’s manufacturing might. Logistics is much more than just transportation from point A to B; it entails adding value throughout the supply chain in a timely and cost-efficient manner. “Green logistics” goes one step further, maximizing processes that are both economically efficient and environmentally friendly. Climate change currently tops the global agenda and companies are feeling pressure to reduce their carbon footprints. 11
At the same time, spiraling fossil fuel prices force companies to search for new ways to maximize efficiency and save energy. All this is happening at a time when the logistics industry is expanding. Despite the predicted doubling of transportation’s performance, the Federal Ministry of Transport estimates that by 2050 the volume of annual freight traffic in Germany will increase by nearly 50 percent from the current 3.7 billion to 5.5 billion metric tons. Germany’s government is working hard to promote eco-friendly practices in the industry which is responsible for over one-fifth of the nation’s CO2 emissions.
With its “Freight Transport and Logistics Masterplan,” the Ministry of Transport is encouraging companies to utilize shortsea shipping and reduce empty truck runs. Even without incentives, companies are discovering that cutting waste and improving energy efficiency isn’t just good global citizenship or image enhancement. It’s also smart business. Take a few examples from the shipping industry. Air traffic usually grabs the headlines, but sea traffic actually accounts for twice as much CO2 emissions. Different techniques are being employed to reduce this impact, and sometimes the simplest means are the best. For example, some ships employ “SkySails” – a German-developed system that harnesses wind power by using enormous parasail kites to reduce fuel consumption by 10 to 35 percent. Cargo container shipping giant Hapag-Lloyd, for example, has learned that reducing speeds by 20 percent results in a considerable 50 percent reduction in fuel consumption. Savings on land are just as tangible as those at sea. Coffee and retail giant Tchibo is making significant investments in a “Logistics Towards Sustainability” program that envisions reductions in transport-related emissions by seven percent by the end of 2008 and 30 percent by 2015. To reach these ambitious goals, the company will use software to optimize delivery routes, improve palette-loading techniques, and take cargo off the road and onto the railways between its distribution and logistics hubs. These are just a few of the changes making German logistics greener. Other improvements include utilizing renewable energies and biofuels, using radio frequency identification (RFID) to reduce paper documentation and faulty loading, pooling inner-city delivery services, designing packaging to maximize volume while minimizing material, deploying hybrid delivery vehicles, and rewarding employees for adopting eco-friendly work habits. In short, Germany is true to its environmental thinking and is paving the way for even greener logistics. For more information about this industry please contact Mrs. Isabel da Silva Matos, matos@invest-in-germany.com; or Mr. David Chasdi, chasdi@invest-in-germany.com
Industry Report
Bio-Boom: Lifestyle Concerns Change Food Market in Germany
A recent study (“LOHAS – Lifestyle of Health and Sustainability”) conducted by the consulting firm Ernst & Young in Germany indicates all that has changed, with growing public awareness of what constitutes healthy nutrition. Although Germans have long been proud of their habit of eating well, the LOHAS study indicates most consumers’ desires have gone beyond a taste for excellent bread and beer brewed according to the centuries' old "Reinheitsgebot" (purity law). It predicts that smaller “reform” organic food stores or “Bioladen” selling organic food – and retailers of goods produced by sustainable means or “fairtrade” products – may no longer be able to meet growing demand. Nearly 60 percent of the food companies interviewed believe that “organic” plays an important strategic role in their future, observing that it shows enormous potential for market growth. “For consumers, ‘just’ filling up on tasty food is no longer enough,” said Peter Schommer of Ernst & Young AG, announcing the study results. He added, “Attributes such as organic, or ‘fair trade’, and ‘made 12
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using sustainable production methods’ are having an increasing influence on consumers’ buying decisions.” According to Ernst & Young, this could mean big business for firms savvy enough to move in to meet the needs of a growing market. The LOHAS study finds, that such products can no longer be viewed as being destined for “niche” markets, but instead that they are becoming more and more mainstream. More surprisingly, the survey also found that to date there is no single brand specifically associated with these products; concluding that there is major potential for brand creation in a number of areas. The study also forecasts that opportunities for setting up organic supermarkets and organic discount chains in Germany remain excellent: consumers want to have their organic food shop in the neighborhood. Study co-author Hendrik Gottschlich told the media, “It is highly conceivable that the market share of organic and fair trade products will rise from its current 10 percent to 30 percent in the mid-term.” The study also contains a number of caveats for businesses. Consumer confidence is the key to success for manufacturers and retailers in the long term, it claims. Some 90 percent of the survey’s respondents said they wanted guarantees that the products they buy have been organically, ethically, and sustainably produced. The German government is aware of the changes in consumer behavior and supports the development of sustainable
sales. Germany’s Federal Ministry for Education and Research (BMBF) for example, will host its 5th Forum for Sustainability in Berlin in September. This will be held in conjunction with the 12th European Roundtable on Sustainable Consumption and Production (erscp2008), a three-day interdisciplinary conference featuring representatives from science, industry, public authorities, and politics. The sponsors say the aim of the meeting is to facilitate innovation and to promote sustainable consumption and production by challenging participants’ projects, ideas and approaches, as well as stimulate debate regarding their contribution to sustainable development. They add that best practice examples will be shared, solution-driven opportunities explored, and joint projects initiated. As the LOHAS study concludes, the market is growing, and guaranteed quality is important. The government and other institutions are developing ways to ensure quality. There is also plenty of opportunity in Germany for marketing organic, ethically produced and fairtrade products on a larger scale than at present, and the country is a ready-made hub to penetrate other European markets too. In fact, if the success of Germany’s long tradition of guaranteeing the purity of their beer is any indication, the sky could be the limit. For more information about this industry please contact Mr. Daniel Lindel, lindel@invest-in-germany.com
Photo: Biocompany
As little as a decade ago, the comment "You’re getting plenty of calories with that already,” was seldom heard at German snack bars – even as an order of fries with mayo was being passed over the counter. In fact, if asked, Germans would more often say that they were not the ones who needed to watch what they ate.
Industry Report
The Philadelphia Story – German Biotechnology Cleans Up at US Industry Awards Industry acclaim for German-based biotechnology manufacturing facilities at this year’s Interphex fair Germany is second only to the United States as a producer of biotechnological medicines. But quantity is not the only measure of success for the German biotech sector: it has also been getting high marks for quality and innovation. The recent success of German-based biotech companies at one of the world’s most important life sciences showcases is just one example – albeit striking – of this peer recognition. America’s Interphex life sciences fair is a major annual gathering for the pharmaceutical and biopharmaceutical industries. German biotech production locations did particularly well at this year’s event in Philadelphia, taking home four of the five “Facility of the Year” awards made by the International Society for Pharmaceutical Engineering (IPSE) and the industry magazine Pharmaceutical Processing. Of 18 German locations in the running, Roche’s Penzberg plant, Boehringer Ingelheim’s facility at Biberach, IDT Biologika’s new site at Dessau, and Pfizer’s factory at Illertissen, each came top in their respective categories.
Photo: Boehringer Ingelheim
Conception, Execution, Operation and Automation: Four Key Success Factors Swiss pharmaceutical group Roche, one of the largest biotech producers in Germany, received the “Project Execution” award for its Biologics IV plant at Penzberg near Munich. The highly automated plant – which was completed in less than three years – employs 150 staff in the production of Herceptin®, an antibody drug for the treatment of breast cancer. Nearly EUR 300 million has been invested in Biologics IV so far, and the company is planning to spend another EUR 172 million on the Penzberg site to eliminate bottlenecks between research and production. 13
Cell fermentation in biopharmaceutical manufacturing
Biberach-based family business Boehringer Ingelheim took the prize in the “Facility Integration” category for its new 9,000 square meter research and development complex which opened in November 2007. The EUR 80 million R&D center, which employs some 1,500 people, is located next to Europe’s largest biopharmaceutical production facility. The company is now spending EUR 60 million on another still larger laboratory and office complex. IDT Biologika’s facility at Dessau-Tornau in the eastern state of Saxony-Anhalt was singled out in the "Operational Excellence" category for its organizational concept which had the production site up and running within 18 months.
The facility manufactures human vaccines from viral pathogens; some of them, such as smallpox, require strict separation and careful handling which is why much of the plant’s work is automated. The world’s largest pharmaceutical company, Pfizer, produces or prepares more than 80 million packs of medicine a year at Illertissen in Bavaria. The Interphex judges were particularly impressed by the plant’s fully automated “Newcon” facility for the production of varenicline, a highly toxic substance used in drugs for smokers trying to break the habit. Because of its danger to humans, the drug has to be produced inside a biosphere. “Newcon” allows this to be done at the touch of a button, thereby keeping staff out of harm’s way.
Foreign Direct Investment
Production of rotor blades at SINOI Rotortechnik GmbH
Chinese Investors Discover the Advantages of Germany Bilateral economic relations between Germany and China are often portrayed as being one way: German companies relocate production to China to take advantage of lower labor costs. The story is, however, not so simple. In fact, Chinese companies are expanding into Germany. They are looking for experts, R&D specialists, and the chance to penetrate the European market. In the process, they are adding value to the German economy and providing work for German people.
Huawei, founded in China in 1988, is an international leader in telecommunications systems and solutions with 68,939 employees worldwide (at the end of 2007). Its products and services are used in over
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150 countries and serve 35 of the world’s top 50 operators. The company reported contract sales for 2007 of USD 16 billion. Things were very different for Huawei in 2001. At that time, the company’s revenues were a fraction of what they are today (USD 2.65 billion in 2000), and the company was looking to expand beyond its native Asia and tap into the European market. As one of Europe’s largest markets,expansion into Germany made perfect sense for Huawei. The company also chose Germany because of the presence of many potential business partners including Deutsche Telekom.
This logic is paying off. Huawei is currently building a network development and research center in the western German city of Bonn (the former federal capital) and is working closely with Deutsche Telekom on a number of projects. In May 2008, Huawei opened an “Innovation Lab” in the German city of Darmstadt. The company is cooperating with several Deutsche Telekom subsidiaries to test and further develop new fixed-line technologies.
Photo: Sinoi
In some ways Peng Wei does not raise any eyebrows. He is a young clean-cut Chinese businessman wearing a dark business suit. Only when one delves deeper does it become clear that he is unusual. Still in his early 30s, he is already the Managing Director of Huawei Technologies Deutschland GmbH – a German subsidiary of the Chinese Huawei Company.
Foreign Direct Investment
Seven years down the line, Huawei employs over 500 people in Germany and has one of its major European business centers in Düsseldorf. Nearly two thirds of its employees in Germany are German citizens and the young managing director has nothing but the highest praise for them. He admires their excellent qualification, strong discipline, and high level of professionalism. Given the chance to make his company’s investment decision again, he would definitely choose Germany.
Peng Wei, Managing Director of Huawei Technologies Deutschland GmbH
Huawei is clearly the largest player of the small number of Chinese businesses with subsidiaries in Germany. According to the most recent statistics, there are between 600 and 800 businesses in Germany that are owned by Chinese investors. This statistic does not include restaurants or travel agencies owned by Chinese.
China and Germany are both major players in the renewable energies market, and this industry offers an excellent example of Chinese companies investing in Germany. Chinese firms particularly look to this sector for the country’s expertise and infrastructure to increase sales and develop new markets in Europe. A good example is China National Building Material Group Corporation (CNBM), a China-based manufacturer of technologies for wind energy such as rotor blades required for windmills. In 2006, CNBM was looking to expand into the European market. It found its opportunity in NOI Rotortechnik GmbH, a German company with headquarters in the Eastern German state of Thuringia. The German company had fallen on financially hard times, but still enjoyed a reputation throughout Europe for making topnotch products for windmills. CNBM also saw the company’s strength in R&D and Germany’s position as the world’s largest market for wind energy as major attractions. 37 percent of worldwide wind turbine and component production comes from Germany.
CNBM purchased a 100 percent stake in NOI the following year, renaming and relaunching the company as SINOI GmbH. Thanks to the excellent efforts of its German managers who had previously been NOI employees, the new Chinesecontrolled company was able to recover lost profits and regain its customer network. The company is currently planning to expand and increase its workforce from 130 to 200. The practice of retaining local talent in positions is a major part of the Chinese investment strategy in Germany. This “localization” policy allows the Chinese owners to utilize the expertise of longserving German workers for optimal results. These stories illustrate that Germany is increasingly becoming a place where Chinese investors are looking to expand into strong and wealthy markets, use the expertise of experienced employees, and earn the trust of a “made in Germany” label. Huawei and SINOI are excellent examples of development in the diverse array of industries, suggesting that Germany’s economy does in fact benefit from China’s increasing wealth and broadening economic worldview.
Photos: Huawei
The German Bundesbank reports that Chinese foreign direct investment (FDI) in Germany increased nearly 90 percent between 2003 and 2006, hitting nearly EUR 295 million in 2006. Nevertheless, the total investment volume remains miniscule compared to a major economic power like the United States which invested over EUR 48 billion in Germany in 2006. Yet with the diversity of new Chinese companies entering the German market, there is little doubt that the presence of Chinese businesses in Germany will be more pronounced over time. Indeed, the Ministry of Commerce in China, Mofcom, predicts that Chinese investments in foreign countries will increase annually by 22 percent until 2010. Chinese companies are seeking opportunities to use specialized knowledge of German employees and institutes. This is taking the form of creating new companies and taking over existing ones that have talented employees but are experiencing financial difficulties. Examples can easily be found in sectors as diverse as IT, machine building, medical technologies, and renewable energies. 15
Huawei Buildings (from the top): Manufacturing Building; Testing Center; R&D Center; Training Center; Exhibition Hall; Staff Dormitory and Pool; Market Center.
THE
FUTURE IS MEASURED IN
OPPORTUNITIES
Renewable Energies – great investment opportunities for you.
One region in the world is profiting from the cleantech boom: Eastern Germany. This region has become a hotbed of cleantech industrial activity. Having vigorously developed resources in all major fields of renewable energy production – solar, sustainable mobility, and wind power – Eastern Germany is now attracting a great deal of international investment interest.
www.powerhouse-eastern-germany.com
Invest in Germany is the inward investment promotion agency of the Federal Republic of Germany. We assist and advise international companies about investment opportunities in Germany. Our experts provide comprehensive project management and support services from site selection to the final realization of the investment. All inquiries remain confidential and our services are free of charge.
Foreign Direct Investment
Foreign Firms Invest to Unlock New Markets and Local Technology New research carried out by the Halle Institute for Economic Research (IWH) uncovers the strategic investment motives attracting foreign companies to the Eastern German processing industry. The IWH's recently launched “FDI micro database” provides a number of interesting answers to these crucial questions on the basis of representative company level evidence. The study shows that the largest shares of foreign investors originate from the EU-15 group of countries and Switzerland (52 percent) as well as North America (24 percent). Most foreign investors located their activities in the federal state of Saxony (29 percent), followed by Thuringia, Berlin, Saxony-Anhalt, Brandenburg, and Mecklenburg-Vorpommern (8 percent) respectively.
Investment motives
The majority of foreign investors set up shop as the result of some form of acquisition. By and large, foreign investors have majority or full ownership of assets at the time of market entry. “Local knowledge, qualification and technology” was cited as being the second most important investment motive right behind “market access.” In addition, the majority of investors also aim at “increasing their efficiency.” This mix of investment motives already indicates the importance of tech nological capability as a locational factor.
Source: IWH, FDI micro database / Note: Multiple answers were possible
Apart from production activities, around 60 percent of subsidiaries are active in research and development (R&D). Moreover, around 79 percent of firms implemented product or process innovations during the time period observed. Hence, approximately 82 percent of firms can be said to be technologically active (i.e. conducting their own R&D or implementing product or process innovations).
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Frequency of answers in percent
0
10 20
30
40
50
60
70
80
90
100
Market access Knowl./Qualif./Technol. Increasing efficiency Investment incentives Risk diversification Following key clients Natural resources low importance no importance
important
very important
extremely important
missing value
Yet innovation is not restricted to the boundaries of the individual company. A large number of companies consider innovation to be a collaborative effort involving other actors including suppliers, customers, and scientific institutions. As many as 37 percent of the technologically active foreign investors attach distinguished importance (on an “important”, “very important”, “extremely important” scale) to local science organizations as a source of technological knowledge used in their own R&D or innovation-related activities. This applies to 34 percent of technologically active affiliates in respect to Eastern German customers and to 29 percent for Eastern German suppliers. Technologically active foreign investors are not isolated from the Eastern German innovation system. However, the survey shows that Eastern German customers and suppliers are less often a source of technological knowledge than their Western German and foreign peers. This might be related to the relative size and importance of the Western German and foreign markets.
In contrast, foreign investors source technology from scientific institutions based in Eastern Germany more often than they do from similar institutions in Western Germany or abroad. On the one hand, this may well be caused by the need for geographic proximity in science-related technological partnership. On the other hand, it may have been triggered by the profound transition that took place in Eastern Germany’s scientific infrastructure. The IWH scrutinized which factors determine the extent to which foreign affiliates source technology from the Eastern German innovation system. The results show that strategic orientation of international investors as well as regional framework conditions matter. In particular, regional human capital endowment as well as public expenditures for higher education attract the technological activities of foreign firms and foster their integration into the Eastern German innovation system. For further information about the FDI micro database please contact: Bjoern.Jindra@iwh-halle.de
German Business
Starting Over: How Germany’s Startups Got Their Groove Back
And at last count there were more mobile phones in use in Germany than there were people (104 prepaid and contract mobile phones per 100 people). As a result, the way ordinary people use technology has also radically changed. The internet allows us to do a lot more than just read email; we can establish contact with long-lost friends or update our profiles in any one of the dozens of social networking platforms designed to meet our exacting profile requirements (be it as young professional, expectant mother or even dog-lover). The Stars among the Startups
In the not so distant past, Silicon Valley’s technorati considered it a badge of honor to have their web applications copied by their German counterparts. An application not the subject of a German “copy/ paste” innovation wasn’t worthy of the name. Factors of language and localization played a major role in the flurry of so-called “copy/paste” startups in Germany, with developers providing German versions of US services to meet local demand (for instance, MySpace only received its official German launch in March 2007). Far from being merely “me-too” applications, the German equivalents were often a response to a missed localization opportunity. However, German web innovators found themselves in a classic catch 22 situation: unable to create new applications due to investor caution, but able to secure financing for localized versions of web platforms which had already proved their commercial worth elsewhere.
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This trend is now being reversed, with German startups leading the web 2.0 way forward. The German startup scene is abuzz with activity, thanks to a newly vibrant internet investment culture promoting creativity and innovation. The share of innovative internet companies operating in Germany is much greater than it was in the New Economy. This is in part due to the fact that starting a business in Germany has never been easier (thanks to the relaxation of company formation laws and a raft of SME funding initiatives), but also to the profound changes realized in the German IT infrastructure. This year the 50 percent mark for households with broadband internet access will be passed – allowing Germany to steal a symbolic march on the Western European average of 42 percent coverage. More than three quarters of German households own a PC (with 60 percent of Germans online).
studiVZ (Studentenverzeichnis – student’s directory) has been similarly successful. Originally conceived as an online social network for the nearly three million students in the German-speaking countries, studiVZ now claims to have almost five million users. In February this year, a third platform, “meinVZ” (my directory) was added to the existing studiVZ and schülerVZ (school students’ directory) platforms. In January 2007, the student social networking platform was sold for
Photo: aka-aki
aka-aki team of founders
Two of the most successful German startup stories in recent years have been in the rapidly expanding realm of social networking. Launched in November 2003, social networking site Xing (formerly OpenBC) is a web-based community platform for professionals and executives. The company has been trading on the Frankfurt stock exchange since December 2006, making it one of the very first web 2.0 companies to go public. Xing, which has over five million users and generated over EUR 20 million in 2007, recently announced plans to launch in the UK later this year.
German Business
an undisclosed sum (reportedly for a figure “over EUR 50 million, but under EUR 100 million”). Social community building using socalled “social software” may well be the current big thing, but contextual and semantic network searching are being talked of as the next big things by those in the know, with a number of German companies in the development vanguard.
Munich’s Proximic is set to give internet giant Google a run for its money in the online advertising stakes with the world’s first dynamic “contextual content network” platform. Yahoo and eBay have already signed up to syndicate product listings as contextual ads on other websites using the company’s “pattern proximity” software. This step represents a first for both Yahoo and eBay, with Proximic netting an inventory of 50 million ads (Proximic calculates that Google, in comparison, has an inventory of around one million unique ads). Proximic claims that advertisers will be able to place their ads more accurately than ever before.
Photos: aka-aki; Syncing
The semantic web (or “web 3.0” as it is being heralded in some circles) is alive and kicking in Kassel where Qitera is pushing its “semantic wikinomics” philosophy on its eponymously named “next generation information engine.” Qitera is a “semantic web service” that allows information to be collected in a meaningful and connected way.
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Although it’s still early days yet for Proximic and Qitera, both companies have already established registered offices in the US.
Media Research’s recent findings that online advertising expenditure has increased by 41.1 percent to EUR 298 million on last year’s figures.
Good Expectations
A great deal of the new German internet startups may well have names strangely reminiscent of children’s TV shows or obscure foreign locations (e.g. aka-aki, Woobby, Yabonga, etc.) but, as the current business climate shows, there’s nothing remotely childish about their business objectives. Who knows, the next internet revolution might well be being “made in Germany“ as we speak. Watch this virtual space.
The new confidence being felt within the German internet scene is making its mark on the German economy. According to the German Association for Information Technology, Telecommunications and New Media (BITKOM), three out of four hightech companies expect an increase in turnover this year. More good news for German startups is provided by Nielsen Berlin 2.0 – Germany’s Startup City
Managing director of Syncing Matthias Kandeler
Every week a new startup opens its doors for business in the German capital. More than 60 internet companies have set up home in the city in the past two years. German and international companies alike are flocking to set up shop in Berlin in order to capitalize on the city’s growing reputation for affordable locations, young and highly trained personnel, and world-class creativity.
According to the Financial Times published fDi Foreign Direct Investment magazine, Berlin is the third most attractive investment location in Europe behind London and Paris. eBay has its largest premises outside of the US in Dreilinden near Berlin where it employs more than 1,000 staff providing customer services to 11 European countries in seven different languages. But it’s not just the big companies who are finding success in Berlin. Companies like Swedish startup SoundCloud are moving to the city to take advantage of the unique Berlin mix of contacts, know-how and private investment opportunities. And it’s paying off. Berlin startups aka-aki and Syncing recently won BITKOM’s “Innovators’ Pitch 2008” contest for innovative ideas and business models.
German Business
Porsche Tops Recent Image Rankings
This year’s survey was more extensive than ever before. This time around survey participants not only evaluated the overall image of companies, but also considered image-building criteria such as company degree of client orientation, quality of product or service, and the influence of these elements on overall company image.
Although profitability is not a strong point of low-cost carrier Air Berlin, its reputation nevertheless remains good thanks to above average performance in terms of client orientation. The study also found that rising profits and share price performances alone do not determine the popularity of a company.
Car bodies on the production line
Swabian sports car manufacturer Porsche occupied the top image spot for the fifth year in succession, with fellow car manufacturers BMW and Audi occupying second and third places respectively. Product excellence was identified as being the most important cornerstone of a durable positive company image. A positive image is derived from good performance, with client-orientation playing the greatest role in performance.
Of growing importance is how companies interpret their social responsibility. Ethical factors, such as dealing responsibly with employees, clients, suppliers, and the environment are playing an increasingly dominant role. The study also confirmed that honesty and creditworthiness are becoming more important to company image, as advertising claims and promises are increasingly held up to scrutiny by consumers using the internet to check their veracity.
German Image Champions Top 50 – Foreign Companies Have an Excellent Reputation Porsche
Auto
BMW
Auto
Audi
Auto
Adidas
Consumer Goods
ICT+Communications
Miele
Consumer Goods
Coca Cola
Consumer Goods
Lufthansa
Transportation +
Tourism
Hugo Boss
Consumer Goods
Nokia
ICT+Communications
Bosch
Manufactured Goods
Puma
Consumer Goods
SAP
ICT+Communications
Nike
Consumer Goods
Ikea
Trade
Apple
ICT+Communications
Haribo
Consumer Goods
Sony
Consumer Goods
FAZ-Group
Media
Linde
Manufactured Goods
Dr. Oetker
Consumer Goods
Henkel
Consumer Goods
Toyota
Auto
Heidelberger Druck
Manufactured Goods
MAN
Manufactured Goods
Tchibo
Consumer Goods
Volkswagen
Auto
Microsoft
ICT+Communications
Daimler
Auto
Beiersdorf
Consumer Goods
ThyssenKrupp
Basic Materials
Amazon
ICT+Communications
Nestlé
Consumer Goods
IBM
ICT+Communications
Aldi
Trade
Hewlett-Packard
ICT+Communications
Intel
ICT+Communications
Continental
Manufactured Goods
Sony Ericsson
ICT+Communications
Ebay
ICT+Communications
Fielmann
Trade
Bayer
Pharmaceuticals
Bertelsmann
Media
BASF
Basic Materials
Sixt
Transportation +
Tourism
Danone
Consumer Goods
Hubert Burda Medien Media L`Oréal
Consumer Goods
Douglas
Trade
Boeing
Manufactured Goods
Otto Group
Trade
Source: manager magazin 20
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Photo: © 2008 Dr. Ing. h.c. F. Porsche AG
For the fifteenth time, Germany’s Manager magazine asked around 2,500 board members, managing directors and executives for their views on the biggest German companies as part of its biennial image profile study.
German Business
The Unsung Heroes of Engineering Breakthroughs Their work is essential for the mechanical engineering and electronics industries, but they remain unknown: external engineering service providers are the new anonymous creative stars of the most important industrial sector in Germany – reports Wirtschaftswoche. You could be enjoying the sophisticated high-tech entertainment system onboard a new Airbus A380 without giving any thought to the who, what, where, when or how it was developed. Or at some point in the near future you might be zipping down a country lane in an Audi, savoring the performance-enhancing qualities of an electric motor that kicks in upon acceleration while simultaneously cutting fuel consumption – and you would not have the foggiest idea whether it was the carmaker or a subcontractor that came up with that ingenious power booster.
Photos: Airbus Deutschland GmbH; Brunel; Lufthansa Technik AG
Airbus Germany
The aerospace giants, carmakers and other industry leaders would have you believe, of course, that every single nut and bolt that goes into their product was designed, tested, patented, and manufactured in-house. But the truth is that an increasing number of the gadgets, features, improvements, and inventions incorporated into the products of many of Germany’s flagship companies may well have been devised by so-called “Ingenieurdienstleister” – or external engineering service providers. These unsung heroes of new-fangled breakthroughs have been operating quietly on the sidelines, away from the spotlight while their revenues and workforces
have been rapidly growing the past five years. Companies like Euro Engineering, Ferchau Engineering, Brunel and Bertrandt have experienced phenomenal growth – the result of a process that began accelerating from the late 1990s, as major manufacturers sought to improve their profit margins and focus on their core businesses by outsourcing elements such as R&D to external providers.
The external engineering service provider sector in Germany received an important boost in 2004 with a law change that allowed external development service providers to loan their experts to customers for an unlimited period. That legislative reform has had a considerable impact, deepening the level of cooperation and confidence between providers and customers.
“You can find our work in nearly every conceivable product – from the Airbus to the automobile,” said Michael Witte, executive board chairman of Euro Engineering in Munich, quoted in a recent edition of Germany’s Technik + Wissen magazine. “But only seldom are we allowed to talk about that work and never are we allowed to put our name on anything.”
A study by the international strategy and technology consulting firm Booz Allen Hamilton found the optimism for the sector’s future was entirely justified. It predicted that global volume for development service providers would grow from EUR 750 billion currently to EUR 1,100 billion by 2020. It also predicted that the dominant sector would be IT, software, and telecommunications with about 30 percent of the orders total followed by the automotive sector (19 percent), aerospace (eight percent), and energy suppliers (three percent).
The major brands fear a possible backlash or even damage to their reputations if word leaked out that subcontractors were supplying vital or high profile parts and systems to the final product. Yet the service providers are hardly complaining about their near anonymity – because they are profiting handsomely from the resulting double-digit earnings growth. Ferchau, from the western town of Gummersbach near Cologne, has doubled its workforce to 4,000 and nearly tripled its revenues to EUR 280 million in the last five years; Brunel from Bremen has seen a near tripling of its work force and its revenues to 2,013 and EUR 128 million respectively. “We’ve still got our best years ahead of us,” said Brunel managing director Carsten Siebeneich, who plans to create another 1,000 jobs in 2008 alone. “It’s an ambitious target but not unrealistic. Our strength is our broad-based know-how. It allows us to come up with cross-sector solutions and ideas that benefit everyone.” Anonymous creative stars
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Reassembly of the compression stage of a jet engine
German Business
Out of Time In today’s fast-paced world, time is money. All number of timesaving devices (ranging from shiny, state-of-the-art laptops and PDAs to the more humdrum teabag and TV dinner) have been created to help save time, but somehow we seem to have less time than ever before. What to do? “Make every second count,” says German time expert Karlheinz Geißler in the Wirtschaftswoche economic weekly.
According to time specialist Karlheinz Geißler, the problem is longer working hours which have blurred the boundary between leisure time, free time, and work time. As a result, we lead more stressful lives. “People feel an increase in time pressure for two reasons,” says university professor Geißler. “Firstly, new technology is increasing the speed at which tasks can be carried out. Secondly, more and more things are being worked on at the same time. Time is being compressed.” And there’s no turning the clock back, as Geißler believes that this trend is set to intensify in the years ahead. Time is money: only by gaining time can economic growth be generated. At the same time, society is increasingly turning into a 24/7 culture as it strives to use every second and minute of the day more cost-effectively.
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Consumer Bubble Geißler believes that there is nothing wrong in getting things done faster. The problem is that people rarely think about what can be done with the time they’ve saved. No sooner have we consumed our fast food meal, wiped our hands using a paper serviette and swallowed the last of our cardboard cup coffee than we’re off spending the time “saved” shopping for other “timesaving” solutions. One solution, of course, is to simply stop consuming so much. Another is to change the way we organize our time. For example, senior managers who are fathers spend much more time talking to their children than was the case in the past. But that they chose to do this on their new-fangled smartphones is more problematic. According to Geißler, it would be better if they simply spent time reading a book to their children. Time of itself doesn’t have any value. “Time is always connected to experiences, which give it quality,” says Geißler. “Just as money by itself doesn’t make you happy, neither does time. You have to accrue time in order to be able to lose it: time spent on pleasant things, loved ones and self-culti-
vation. Otherwise, children would merely be a ‘brake’ on time, culture nothing more than a frivolous diversion, and love but a waste of time.” Downshifting for a Better Life But all is not lost. Geißler points to the increasing number of ways of escaping time pressures. Increasingly more workers are taking lengthy sabbaticals, unpaid leave or parental leave as they “downshift” their professional commitments for an improved quality of life. “Downshifting” might lead to a loss of income, its advocates concede, but also to a better managed and more fulfilling life. The downshifting trend is becoming ever more important as individuals reassess their professional and personal goals to pursue academic goals, spend time with their families or simply embark on a voyage of self discovery. What might have been wrongly dismissed in the past as a midlife crisis, is today being recognized as an opportunity for improving motivation and promoting increased flexibility. As Geißler puts it: “Any company that views innovation as important should give every employee the opportunity to have a break from their routine.”
Collage: Typoly
In an age where we should theoretically have more free time on our hands (thanks to the simple fact that we are all living longer), we seem curiously hard pressed to find time for the family, favored recreational activities, or even just to relax.
Top Science and Research Location
Making Stem Cell Research More Competitive New changes to the stem cell law will enhance Germany’s biotechnology sector Stem cells are an increasingly important factor in the battle against serious diseases and could even lead to cures for cancer, heart disease and other ailments that we have always thought incurable. However, the law in Germany places strict rules on the use of stem cells for research and development. Until very recently, scientists in Germany could only use human embryonic stem cells extracted before January 1, 2002. The German parliament has voted to amend this strict regulation; thus providing a new development opportunity to the whole German biotechnology sector by relaxing the guidelines governing the use of human embryonic stem cells for research purposes. The Bundestag’s decision on April 11 to move the cut-off date forward to May 1, 2007 means researchers will now have a much greater number of embryonic stem cell lines at their disposal – around 500 instead of the 21 currently available. The change will also end the research restriction of Germany’s scientists as well as clarify their legal position: they will no longer risk falling foul of the law when taking part in international research projects using stem cells extracted after the old deadline. A move in step with the times
Photo: Amgen
The request for change has been building for some time. Earlier this year, the Robert Koch Foundation sent out a powerful signal of the importance of stem cell research and Germany’s role as a research location by honoring three pioneering stem cell researchers for “their outstanding accomplishments in the field of stem cell biology.” The German government has also been throwing its weight behind the relatively new field of regenerative medicine which embraces both stem cell research and tissue engineering. Together with regional governments and one of the country’s leading research institutes, the Helmholtz Association of German Research Centers, it has been instrumental in providing 23
funding for interdisciplinary “translation centers” in Berlin and Leipzig. Announcing the initiative at the end of 2007, Germany’s Minister for Education and Research, Annette Schavan, said “We are successfully applying scientific discoveries to clinical practice and in doing so allowing innovation into the healthcare system.” Biotech companies head east Locating the new centers in Berlin and Leipzig implicitly recognizes the growing importance of biotechnology in the former Eastern German states as a whole. Since reunification in 1990, they have been highly successful in attracting biotech companies and investment – a development in which the government’s attempts to boost the region’s flagging economy in the mid-90s undoubtedly played a part.
Berlin-Brandenburg is now one of the country’s biggest single biotechnology clusters and successfully competes with other clusters in Europe. Regional clusters have also formed around Dresden, Leipzig/Halle, Dessau, and Rostock. In addition to financial subsidies, the availability of land and suitable local infrastructure have also been important considerations. For example, among the smaller eastern hotspots, the presence of chemical clusters in Leuna and Dessau, and the optics cluster around Jena have enabled biotech companies to tap into existing facilities to develop new synergies. For more information about this sector please contact Ms. Nicola Henneberg, henneberg@invest-in-germany.com, or Mr. Tilo Mandry, mandry@invest-in-germany.com
Device for the extraction of stem cells
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Unearthing Golden Nuggets in Jülich Last year’s Physics Nobel Prize was a highlight for physicists in Jülich. The western Rhineland region formerly best known for its lignite mining is being reinvented as a flourishing environment for innovation – Germany’s answer to Silicon Valley. Founded in 1956, Forschungszentrum Jülich is now the country’s largest think tank with a staff of 4,400 and a very bright future. The roads on campus are being widened, construction cranes are everywhere and the cables for the world’s fastest civilian supercomputer, “Jugene,” are being put into place. Jugene is used by 200 different European research groups ranging from material sciences and particle physics to environmental research. But it is not only the construction boom that has made the Chairman of the Board, Achim Bachem, a happy man. “The feeling of excitement in the air is almost tangible,” the mathematics and information technology professor says. “The research going on in Germany is starting to catch up with the international competition. We’re at the top.”
The German Ministry for Research and Technology is supporting such projects within the framework of its “High-Tech Strategy,” which provides grants that can cover up to a quarter of the costs of cooperative developmental efforts between companies and research institutes. The so-called “Exzellenzinitiative” (Initiative for Excellence) created by the federal and state governments promotes cooperative efforts between universities and research institutes.
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SAPHIR, an atmosphere simulation chamber for environmental research
One prominent beneficiary of these efforts is the University of Aachen (“Rhei nisch-Westfälische Technische Hochschule RWTH”). It was designated an “elite university” after signing a cooperation agreement with Forschungszentrum Jülich and receives an additional EUR 180 million. Brain research, information technology, and simulation sciences are the topics of JARA, the Jülich Aachen Research Alliance, in which Jülich and Aachen combine their strengths. The 1980s were a difficult time for nuclear energy. Back then, the management decided to reposition Jülich in terms of a revised strategy: the nuclear research reactors were gradually shut down. As a result, new areas of research into dif-
ferent energy sources emerged as well as a focus on environmental research. Researchers at Jülich are now experimenting in fields as diverse as new fuel cells, plasma physics, and photovoltaics. By embracing a broad range of research interests and adopting an interdisciplinary credo, Jülich exemplifies all that is positive and forward-looking about German research today. For Bachem’s predecessor, Joachim Treusch, this was the key. “You no longer discover golden nuggets of knowledge by just focusing on classical physics, chemistry or pharmacy, but rather you find them at the intersection of larger fields of study; in fields that are also being explored in neighboring disciplines.”
Photo: Forschungszentrum Jülich
The mood has been especially ebullient since December when Peter Grünberg was awarded the Nobel Prize in Physics for his discovery of giant magnetoresistance: the first for Jülich and its umbrella organization, the Helmholtz Association. It was an important breakthrough – Grünberg’s trailblazing work demonstrated that some of the best research in the world was being carried out in Germany. It also showed what scientists in Germany are capable of achieving despite the country’s rather conservative research system.
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Shine a Light – Laser Technology Made in Germany Germany celebrates its leading position in the research, design, and production of lasers that make modern life possible. When lasers were first invented in the early 1960s, scientists weren’t really sure what to do with them. In fact, one scientist is legendarily reported to have called them “a solution looking for a problem.” Almost 50 years later though, it’s hard to imagine modern life without lasers. Consumers are most ordinarily familiar with them through printers, DVDs, and bar codes. But countless applications have been found for them in all walks of life: consumer electronics, IT, science and medicine, industry, law enforcement, entertainment, and the military. Germany has developed into a powerhouse for laser production and research. Forty percent of all beam sources sold worldwide proudly bear the “Made in Germany” logo, and some of the industry’s leading producers call Germany home. Although these companies are by and large concentrated in Baden-Württemberg and Bavaria, facilities throughout the nation produce lasers – particularly for use in automation and measurement, medical, and microsystem technologies.
Lasers have been every bit as much of an eye-opener for Germany’s manufacturing giants. Lasers help these companies weld, cut, melt, harden, and polish their products in a fraction of the time of previous methods. For example, shipbuilding legend Meyer Werft uses 400 km of laser hybrid welds per ship (which equals 40 percent of the welds). Siemens Power Generation uses similar technology to reduce gas turbine manufacturing time from 17 to 5 days. Lasers have also been a blessing for Germany’s key automotive industry. Lasers can cut sheets of metal into the proper shapes using less energy and time and putting less stress on the material. However, such lasers aren’t only used with metal. For example, Korean auto parts giant SL Corporation is now using Korea’s first hybrid laser device – designed
and constructed in Germany – to make products such as the tail lights for Hyundai vehicles: cleaner, faster, and more efficiently. What really sets the German laser industry apart is its faith in the laser’s potential. German companies reinvest over 10 percent of laser revenue in R&D, far above the industry average of 3 percent. The German government shares this faith too. Between 1987 and 2004, it directed over EUR 770 million to related optical technologies. Moreover, its current “High-Tech Strategy” envisions EUR 310 million of support for the industry between 2006 and 2009. For more information about this topic please contact Mr. Oliver Seiler, seiler@invest-in-germany.com
Photo: Forschungszentrum Jülich
Between 2003 and 2006, industry sales rose at an average annual rate of 13.4 percent; climbing from EUR 4 billion to EUR 5.83 billion. In that same period, the number of industry employees increased by four percent annually to reach 45,000 in 2006. Almost 70 percent of the laser products produced in Germany eventually find a home abroad, with 75 percent of those remaining within the EU. The range of laser applications is incredibly diverse and growing still. Perhaps the most celebrated modern use of lasers is in refraction surgery, which corrects the vision of near and far-sighted people. In 2006 alone, 93,000 Germans were able to put away their glasses and contact lenses for good thanks to this amazing technology. Writing bits using laser beams
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Alma Matters: German Universities’ Pursuit of Excellence
Four years ago, the Excellence Initiative came into force in Germany. The further education concept for universities exceeded all expectations and took the doubters by surprise. under the carpet. “The German university system believed for a long time that all universities are equal. That was an illusion. The quality differences, which have always been there, have become more apparent,” said Jürgen Mittelstraß, academic researcher and professor at the University of Konstanz.
Four years later, the mood is a very different one – writes the major German daily business paper Handelsblatt. The Excellence Initiative, which has its roots in the “Brain Up!” project, has brought more impetus to the world of German higher education than hoped.
The leveling of the academic playing field, which took place after the student movement of the 1960s, is slowly being reversed. “The university reform in the course of the 1968 movement also introduced some lamentable values, turning universities partially into “cosy and amiable” institutions. Performance often didn’t play a role,” said Mittelstraß.
“German universities are more stimulated than they have been for the past 25 years,” said Michael Schuster, director of the humanities and social sciences program for the German research community.
Those days are over. Only a few social scientists, such as Michael Hartmann (Technical University of Darmstadt) maintain the elite phobia of the 1970s and 1980s.
The country will award EUR 1.9 billion to nine elite universities, 37 excellence clusters, and 39 graduate schools by 2011. Even more crucial is the change of awareness in further education policies. Promoting elite establishments has once more become the focus of research policy. Differences becoming evident Differences between academic institutes are now being accepted and not swept 26
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Hartmann believes that promoting specific universities will make it more difficult for socially disadvantaged young people to gain access to the top universities.
Logo University Konstanz
Axel Meyer, professor for evolutionary biology at the “elite” University of Konstanz, sees it differently. In his experience, quality differences are simply a matter of course. “University-goers already orientate themselves via the university rankings in Spiegel or Focus magazines or Die Zeit newspaper.” Raised profile abroad The initiative has brought a lot of publicity abroad as well as in Germany, which may help lure foreign students to German universities. “We are on the lookout for good PhD students. There’s a buyers’ market for good academics. Too many talented people go abroad,” says Axel Meyer. “If, in the future, we can attract the best Indians and Chinese, who currently go to Stanford, as well as the best Germans, then the Excellence Initiative will have been worth it.”
Photo: Ines Blersch, Stuttgart
In January 2004, the German government held an innovation congress entitled “Germany. The future.” The education minister presented a concept to promote further education called “Brain Up! Germany is looking for its top universities.” Most newspapers were united in their skepticism.
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The Little University with the Big Reputation When Brandenburg University of Technology (BTU) energy technology professor Harald Schwarz recently set off to visit the University of Sao Paulo in Brazil, the furthest thing on his mind was a red carpet reception. The Sao Paulo university is the largest in Brazil, whereas his own Cottbus-based technical university has less than 5,000 students. Sao Paulo can bask in its reputation as the country’s and Latin America’s top academic and research institute. The Cottbus university on the other hand, would never claim to count itself among the leading lights of the German academic world – observes the Berlin daily paper Der Tagesspiegel.
Photos: Brandenburg University of Technology
But a red carpet reception is exactly what he got. Schwarz has enjoyed similarly warm receptions in Shanghai, Peking, and Taiwan. All well and good for a visiting elite university professor, but hardly the sort of welcome normally accorded a professor from a provincial technical university in Eastern Germany. Cottbus is a city with a population of just over 100,000 in the Lausitz region in the state of Brandenburg. The landscape is scarred by working and derelict open-cast lignite mines. Looming over slag heaps are the superstructures of enormous brown coal excavators and the smokestacks of declining heavy industries.
ment has allowed the Brandenburg university to develop a recipe for energy production and a technology much coveted by countries including Brazil and China. The university has built a state-of-the-art CO2 free coal-fired power plant in partnership with Swedish energy giant Vattenfall. The Swedish power suppliers have invested EUR 70 million in the prototype plant which makes use of carbon capture and storage technology (located in the appositely named mining town of Schwarze Pumpe – Black Pump – the plant is due to begin test operations this year). Brandenburg’s only technical university has already begun transferring the CO2 free technology to countries around the globe. The university has also established partnerships with institutions as far flung as Chile and China, as well as just across the border in Poland. In the coming winter semester, BTU will offer a joint energy technology course of study with universities in Peking, Shanghai, Taiwan, Sao Paulo, Rio de Janeiro and Bela Horizonte. The university affiliated Panta Rhei Interdisciplinary Research Institute for Lightweight Construction Materials is also building a growing international reputation. The research center specializes in technology transfer research geared to meet business lightweight materials
BTU Cottbus high voltage test equipment
needs. The research center has already established partnerships with Bombardier in the rail transportation sector and Daimler, VW, BMW and Thyssen-Krupp in the auto industry. The lightweight materials being developed by Panta Rhei for today’s cars are a far cry from the resin composite body used for the iconic two-cylinder Trabant produced as Eastern Germany’s response to scarcity of resources. The international recognition currently enjoyed by the Cottbus university in the fields of energy technology and lightweight materials technology shows that even smaller, so-called provincial universities can build international reputations by adhering to founding academic principles. And BTU’s mission statement? “BTU: Building-Technology Environment. Designing a sustainable future.”
Yet according to university president Walther Zimmerli, it is this otherwise uninspiring landscape which is responsible for the five star treatment BTU staff enjoy overseas. “Anyone who wants to work on energy supply in the future has to come to Cottbus because of its unparalleled laboratory facilities.“ Where other universities have to spend considerably to simulate optimal research conditions, BTU has these right in its backyard. Zimmerli calls the area a “living laboratory” with “real life“ laboratory conditions. One thing the Lausitz region has in abundance is brown coal: where better to develop a way to burn it cleanly than here? Innovations borne from working in this “living laboratory” have put the small university on the map – both at home and abroad. The unique research environ27
University building staircase (IKMZ)
Innovative Germany
+++++ Innovation News +++++
The Institute of Applied Research (IAF) at the Ingolstadt University of Applied Sciences, Audi, Volkswagen, and the international automotive supplier Continental
Optimization of airbag perfomance
Proteins for Airplane Wings As any Inuit can tell you, fish live in freezing water without themselves freezing, yet, unlike mammals, they’re cold-blooded. How do they do it?
have extended the accident recognition system by an innovative new technology which uses the “structure-borne sound” of a crash to determine how the vehicle is being deformed. Everybody who regularly travels by train will be familiar with the following phenomenon: railway tracks produce a humming noise long before the train arrives. This sound is called structure-borne sound. It helps to warn us when danger threatens. This is exactly how the idea of the scientists under the direction of Professor Thomas Brandmeier of the IAF and his partners, Michael Feser from Continental, and Sigrid Saulich from Audi, came into being. A newly developed sensor not only enables the central airbag control unit to ”feel“ the crash as the passengers do, but also to “hear” how the structure of the vehicle is being deformed. The sound produced by the deformation of the vehicle structure spreads throughout the vehicle as structure-borne sound. The combination of hearing and feeling allows a finer, faster distinction between light and dangerous crashes by a centralized control unit mounted in the passenger compart-
The Frauenhofer Institute has succeeded in synthesizing them; mixing them into paints, and testing them successfully. As part of a three-year research project with industrial participation, technically
ment of the vehicle. This in turn enables the optimization of airbag performance without additional sensors or additional costs. Research and development at German universities of applied sciences is conducted in close collaboration with industry; enabling the rapid transfer of new technologies to the general public. With its research focused on vehicle safety, the Ingolstadt University of Applied Sciences helps German manufacturers justify their claim that German-manufactured products are safe, robust, and solid. On the other hand, it also helps them to satisfy growing legislative demands. This system, which will be ready for production by the end of 2008, is being made possible by investments by the project partners Audi, Volkswagen, and Continental in partnership with the University of Applied Sciences at Ingolstadt. Additional promotion and financing comes from the German Federal Ministry of Education and Research. www.fh-ingolstadt.de/iaf iaf@fh-ingolstadt.de
relevant surface findings should be transferred. To these belong the special lacquer for the anti-ice effect which improves the durability of such surfaces against external influences.
This question is of more than philosophical value, and in fact the Frauenhofer Institute for Production, Engineering and Applied Material Research in Bremen has spent a lot of time looking into it: if a material could be devised that would keep surfaces like airplane wings and hightension wires from freezing up, the world would be a better place. The answer seems to lie with a family of proteins synthesized not only in fish, but in plants and insects which can survive subzero temperatures.
Scratch the ice off the car in the morning or wait at the airport until the airplane has been de-iced. Both are necessary for safety reasons, but one loses time and is angry as a result. The development work being carried out by the Fraunhofer Institute IFAM shows a way to avoid this annoyance in the future.
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Photos: Continental; Fraunhofer IFAM Institut
The Car That Can Hear: The Structure-borne Sound Airbag
Innovative Germany
+++++ Innovation News +++++ Smart Clothes What, actually, does clothing do? Apart from keep us warm, protect us from the elements, and – if it has pockets – give us somewhere to carry our bits and pieces? We all know what purpose clothing serves, but with the rise of microelectronics, research is being carried out into what clothing could do. In the not so distant future, clothing can – and most probably will – help keep us healthier, entertain us, and add a whole new dimension to our social and leisure activities. The elderly and the chronically ill often need to eat or take medication at specifically prescribed times. Being sick or infirm, they very often forget to do just this, with their health suffering accordingly. A gentle reminder would ordinarily be enough to prevent this unfortunate situation occurring, but how best to administer it? What if the clothing they wore was equipped with micro-sensors which monitored their health? That might sound far-fetched, but the EUR 2.6 million Nutri-Wear project of the Rhine-Westphalia Technical Institute is helping do exactly that. Supported by Motorola, textile manufacturer Elastic, and medical care firm Suprima, the project is developing pajamas and underwear equipped with sensors which measure the body’s electrical resistance levels. Electrical resistance – or “bio-impedance” as it’s also called – changes when the wearer eats or drinks.
Photos: Fraunhofer Institut München
Café Culture Helps Put Business on the Menu Imagine that you’ve got a business and you’ve got a surefire business idea. It’s a great idea, but you need help – you’re an enterpreneur, not a scientist, and you need academic clout to get the idea off the ground. Cold-calling universities is a time-consuming and fruitless task. Ask around too publicly, and you run the risk of your idea becoming public property. What to do? Might we suggest heading to a café? Not just any café of course, but the
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Since studies show that over 40 percent of clinic and other care facility residents suffer from poor nutrition, such clothing could provide a lifeline; alerting caregivers and helping save lives. In a similar vein, several of Germany’s Frauenhofer Institutes are working to develop a shirt which monitors heartbeat and breathing. Hooked up to a smartphone, this would help alert doctors when things go seriously wrong. Microsoft’s European Microsoft Innovation Center in Aachen is working on a t-shirt which tracks blood-sugar levels and transmits the information to a wrist-watch worn by diabetic patients who receive a signal when it is time to take their insulin.
image; clothing hooked up to GPS-similar satellite information systems to help navigate unfamiliar surroundings; and a fabric shopping bag which uses solar energy to recharge your iPod, cell-phone or BlackBerry while you walk. All of which gives a completely new meaning to the expression “smart dresser.” Who knows, with clothing this smart, you might never want to get undressed again!
But it’s not just the sick and infirm that can benefit from such innovations – fit and active people can also reap the benefits of “intelligent clothing”. Adidas and Polar have already produced a training system called “Project Fusion” which monitors heartbeat, speed, and elapsed distance for joggers. Skiers can stay in touch with the Texsys and Swany-manufactured G-Cell glove which integrates a cell phone into a high-tech ski glove. Currently in the pipeline from Frauenhofer is Project ConText: a smart outfit linked to a system which analyzes individual tennis swing or golf stance to provide verbal feedback. Other smart clothing projects in the works include t-shirts with micro-fabrics capable of video display (washable of course!) so that you can wear a moving
transfercafé, which has just opened for business on the web with support from the state of Berlin and the EU. Head over to www.transfercafe.de to be greeted by none other than Albert Einstein who’ll lead you to virtual tables where resident experts in the fields of mechanical engineering, the environment, electronics, and material technology are waiting to offer their scientific expertise. According to Berlin Senator for Business, Harald Wolf, small companies very often don’t know how or where to get the knowl-
Wearable computing
edge they need to develop their products. Survey findings show that there are over 3,500 small and medium-sized firms in Berlin, each with fewer than 20 employees. Around two thirds of these companies would like to establish contact with experts from the sciences, but only half of them succeeded in this. Thanks to transfercafé, experts are but a mouse click away: find the suitable café table and click on it to be presented with a menu of experts and areas of specialist knowledge. Click again and you’re on your way. All this and no need to even leave a tip for the waiting staff.
Innovative Germany
Tomorrow’s Innovations Today Germany’s reputation as a technological powerhouse is premised upon the country’s rich historical legacy of innovation. Since 1978 a jury affiliated with the Wirtschaftsclub (Economy Club) Rhein-Main and Wirtschaftswoche magazine has met to award an annual German economy innovation prize. Over the years, winning inventions have found their way into general production to become a part of everyday life. These aren’t merely theoretical innovations for a brave new world, but products ready to be manufactured. Taking a sneak preview into the future, we present the 2007 grand prize winners and a selection of runners-up. semiconductor that's 2,000 times thinner than a human hair you only get one chance to get it right. Diode lasers, which are used for this purpose, are extremely efficient. They also require exact focus, which is where the Dortmund-based firm Limo (Lissotoschenko Microoptics) enters the picture. Limo has perfected a way of producing lenses (beam-shaping optics) which correct diode lasers' isotropic or multi-directional characteristics. Limo's anisotropic beam-shapers are world beaters: the firm has already registered 82 patents in this area with a further 280 patent applications pending. For a company with only 220 employees, this is a remarkable achievement. Start-up Concentrix Solar It has been possible to harness the sun's rays to produce electric power for decades. What hasn't been possible has been to do so efficiently, even though we've now reached the point where whole
buildings can generate their own electricity as research efforts have refined the materials used to make solar collectors. The next step is to large-scale generation. This is what Flensburg-based company Concentrix is working on. The principle is straightforward enough: the more light obtained, the more energy generated. But given that the sun only produces so much light, the trick is to concentrate that light coming up with a cell capable of turning it into as much energy as possible. Concentrix solves the first problem with ultra accurate Fresnel lenses (originally developed for lighthouses) which are both light and thin and can concentrate sunlight 380 times. The second problem they resolve by placing three semiconductors – each capable of converting a given color spectrum into electricity – on top of one another. The result is an array of cells working at 25 percent efficiency, with a jump to 35 percent expected in the immediate future as the technology is refined.
Medium-sized Firm: Limo Lasers have come a long way from the death rays of science fiction to the harmless reality of lasers in ordinary household devices like CD players. They also have numerous other applications: from keyhole surgery to the etching of printed circuits where precision accuracy is imperative – when you're dealing with a Concentrix Solar CPV plant in Puertollano, Spain
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Photo: concentrix-solar
Grand Prize Recipients Large-sized Firm: MAN Diesel There are two standard types of engine: the four-stroke internal combustion or “Otto” engine and the diesel engine. Each has its respective advantages, but when it comes to engines larger than those used in conventional cars, the diesel is the clear winner in terms of power. Unfortunately, it’s also the clear loser in terms of harmful emissions. In 1997, on a flight from Augsburg to Copenhagen to attend a conference, MAN engineer Wolfram Lausch was talking to his then boss Hans-Günther Bozung about this very problem. The main drawback was the spark plugs which just didn’t generate enough ignition power for a large-scale engine. What if there was a way to design a four-stroke engine ignited by an injection of high-powered gas? It took eight years of work, but by April 2005 a prototype had been made and tests begun. The first PGI (performance gas injection) engine made its debut the following year at a trade fair in Cologne and the first orders started coming in from Russia and Argentina. Thanks to its radically reduced emissions, the PGI is a strong contender for use in power generating plants being built as Kyoto Protocol measures are phased in worldwide.
Innovative Germany
Runners-Up EnBW (Energie Baden-Württemberg) Energy use throughout the day isn’t constant: it fluctuates with demand. But monitoring this change has always been a problem – one that’s now been solved by this giant company’s invention of an intelligent device which reports to a central internet base every 15 minutes, thus allowing the supply of energy to be micromanaged. With one thousand of these devices ready to be installed at test locations, EnBW hopes to save its customers money – and conserve energy at the same time.
EnBW power meter
EnBW power radar
Photos: EnBW; Moonlight
Sto: Amazing Paint Who would have thought that one way to reduce automotive emissions would be to paint walls white? This is exactly what Stühlingen firm Sto, working in partnership with Professor Horst Kisch of Erlangen University and the Kronos Chemical Company, has done. The company's StoPhotosan Nox product, which costs EUR 12 a liter, makes use of titanium oxide particles and light to break down nitrous oxide and ozone emissions into harmless gases. And it isn't sunlight dependent – ambient and artificial light do the job just as well. FZK:Transforming Biomass Biofuel is a hot topic these days, but with land better used to produce the world's food supply being one potential source, we're morally bound to look further afield. One solution is Bioliq, a fuel made from straw and wood shavings using a process developed by the Forschungszentrum Karlsruhe (FZK – Karlsruhe Research Center). These waste materials are processed into slurry then refined at a largescale plant by pyrolysis: the chemical decomposition of organic materials by heat in the absence of oxygen. Bioliq is proving to be the most efficient large-scale biomass transforming manufacturing process discovered to date.
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ifm:Intelligent Sensors Essen’s ifm electronic is a world leader in the development and manufacture of sensors. That include the sensors which open doors automatically, so it’s little wonder that they’re as concerned as anyone by the fact that they open too readily – driving up heating and air-conditioning bills as a result. In developing a 3D sensor which reacts intelligently to somebody wanting to enter a door and not to somebody just walking by, they have come up with a device that promises to enhance car safety. By analyzing the picture its camera takes, it can survey the surroundings of a parked car for hidden objects, analyze the movement of the eyelids to determine the driver’s fitness to drive, and calculate the exact inflation rate and size for a deployed airbag. “There are countless applications; we’re expecting some surprises,” said Thomas May, the company’s research director. Moonlight: Energy-Storing Plastic
Emergency lighting never looked better – or used less power. Moonlight’s spheres are used as conventional lights in plenty of indoor and outdoor situations, but the Wehr-based company realized that when the power goes out an alternative source of power has to keep the emergency lighting going. This led them to develop Neverdark; a model which provides up to 90 minutes of light from an energystoring plastic they’ve developed. So if the power fails, the lighting doesn’t. They’re even waterproof!
Carpegen Fungal diseases are difficult to treat – not least because in order to eliminate the fungus, you have to identify it. Carpegen, based in Münster and long-time leader in diagnostics, has come up with a solution: a mycodiagnostic chip which can identify the DNA of 99% of the fungus species responsible for oral infestations. A swab is sent to Carpegen’s laboratories on the chip which has reacted with the material placed on it. Once it’s identified, precise treatment can begin immediately. Carpegen also hopes to have skin-fungus and mildew tests for the home soon. Rewitec It’s a basic law of physics: if you rub two things against each other they’ll eventually wear out. That’s why, amongst other things, we have motor oil: so automobile engines don’t wear themselves to death. The oil forms a barrier between the metal parts. Increasing the efficiency of this process via additives has kept chemists busy for years. Rewitec, in Lahnau, has come up with an ultra-modern solution using M2, an oil additive which uses nanotechnology to recoat worn parts with metal silicate nanoparticles adhering to damaged surfaces to build a protective layer. And it’s not just intended for automobiles: M2 is already being used in ships’ motors and wind generators. Carl Zeiss Vision Wearing glasses has always been an area of tentative approximation, as exact correction of defective vision via a lens requires an accuracy of diagnosis and production far beyond the capabilities of the human eye. Carl Zeiss, one of the oldest names in the business, has come up with a diagnostic machine, the i.Profiler, which interfaces with the i.Scription lens-maker to make glasses which are accurate to a hundredth of a diopter – for a higher degree of vision correction than ever before. Infineon Cell phones continue to pack more and more features into a tiny amount of space, making chip design one of the most crucial factors in this ultra-competitive industry. With its E-Gold chip, Munich firm Infineon has managed to pack a baseband processor, radio frequency transceiver, power management unit, and RAM all into a single tiny chip measuring 8mm by 8mm. Moreover, they’ve also figured out a way to produce it one third cheaper than all previous units, thereby enhancing the quality of the cheapest cell phones.
Innovative Germany
Drinking Water
Developed by the Fraunhofer Institute for Interfacial Engineering and Biotechnology in partnership with its Institute for Systems and Innovation Research division and the RWTH Aachen University, the decentralized treatment plant concept allows waste water to be reclaimed for household use or converted into energy and fertilizer.
The downstream rotation disc filters retain the anaerobic bacteria in the reactor and filter the treated sewage.
Water is a precious natural resource, but all too often, we literally pour it down the drain. More than ever before we have to find ways to avoid indiscriminate use of a much-needed resource. In the summer of 2004, development work started on a landmark water treatment project at a residential estate in Knittlingen near Pforzheim. Part of the DEUS 21 (Decentralized Urban Infrastructure Systems) project sponsored by the Federal Ministry for Education and Research (BMBF), the water and waste water initiative is the only one of its kind in the country.
Using up-to-the-minute membrane technology, the process allows waste water to be filtered to levels suitable for drinking. The filtered material is then refined and put to other uses around the house. All of the houses within the project have different sources of water supply: one for drinking water and one for domestic household use purposes. The domestic household water is produced from rainwater by passing it through a membrane to filter out microorganisms. Because rainwater has virtually no calcium content, it is ideal for washing clothes and dishes, showering or flushing the toilet, or even watering the daisies in the garden. Specially designed seepage troughs were designed for each building to collect rainwater and channel it through subterranean passageways to a building onsite on the estate’s border where a series of membranes filtered it and fed it back to the subdivision as drinking water. The quality of the water going out is continuously monitored.
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Rainwater
Secondary Use
generation, the nitrogen and phosphorous chemical salts are then processed into fertilizer. This same system also processes kitchen waste, which is put down the drain, ground up, and deposited in a trap under the sink to be similarly flushed away to the processing facility. As the test facility for the wider DEUS 21 project, Knittlingen residents have the possibility to use some or all of the options available, with the project being monitored to evaluate just which features are the most used and liked. “Before we can sell our ideas abroad, we first have to show that we can do it in our own country,” explains Professor Walter Trösch, deputy director of the Fraunhofer Institute for Interfacial Engineering and Biotechnology. According to Trösch, the projects carried out within the DEUS 21 framework to date have proven that a decentralized infrastructure can work. “We now intend to offer our technology on the world market – either as a turnkey solution or in the form of individual components that users can adapt to their own requirements.” With water conservation being one of the great issues of our time, great hopes are being placed on the success of this and similar water conservation projects. Certainly, the success of DEUS 21 injects new life into that old idiom of every cloud having a silver lining.
A parallel network carries household water – what goes down the drain after washing – to a separate facility in the same building which separates out the calcium and detergent and returns the water to the houses to be used to irrigate gardens and lawns. This leaves sewage. Houses on the estate are equipped with vacuum toilets (similar to those used on airplanes, ships, and trains), which use ten times less water than conventional water-saving toilets. Sewage goes to a high-performance anaerobic membrane assembly to be biologically degraded in a sealed container. It is then broken down into natural gas which is used for heating and electricity
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Washwater
Water directs the way in the water house. Rainwater processing, vacuum station, and sewage treatment equipment are stored here.
Photos: Fraunhofer-Institut für Grenzflächen- und Bioverfahrenstechnik IGB
Project DEUS 21 – Happy When it Rains
Sewage Water
Germany and the Germans
Typically German! Many clichés about German people do the rounds in the world. Only one group can really convincingly confirm or deny these clichés: the foreign “insiders” living in Germany. “So, what is typically German?” That question was put to dozens of people with migration backgrounds living in Berlin by the Berlin radiomultikulti radio station and the Berliner Zeitung daily newspaper. Here are a select few answers given by those with an intimate knowledge of the Germans. “... punctuality and discipline.”
“… that things must always be clearly defined”
Nihat Sorgec, 49, born in Turkey,
Tyron Ricketts, 34, born in Austria, actor
managing director of an educational institution in Kreuzberg, Berlin
“... not to show emotion.” Mo Asumang, 44, daughter of a Ghanaian
“... rather direct. And also a certain measure of honesty, making a German kiss a sincere kiss. To me, that is what is meant with ‘German quality’.”
and a German, tv presenter and producer
Marwan Kassab-Bachi, 74, born in Syria, painter
“What is typically German?... Being organized. That I find great about Germany. I experienced it first hand when I was working here in the opera house: organization. It works, and in most cases it works better than in other cities where I've worked. For instance, in Belgrade.”
“... a Mercedes. That is such a symbol. Mercedes has always been Mercedes and will always be Mercedes.” Stipe Erceg, 33, born in Croatia, actor
Tamara Marcovic, 38, born in Serbia, singer
“... as far as I am concerned, the order.” Katerina Medvedeva, 39, born in Moscow, actress
“... not so typical as it was before. It was always said Germans are strict and diligent, disciplined, compliant, but that has changed quite a bit. In any case, I find the Germans not to differ from other Europeans.” Francoise Cactus is a singer, musician and writer
“... pickled cabbage.” Michael Ginsburg, 24, born in Russia, actor
“…sausage, beer, Mercedes, pork meat, driving fast and Oktoberfest.” Nikolai Valuev, 34, born in Russia, boxer
“... they compromise. There are so many people on a small surface area … people must simply get along with each other, and so they must be able to compromise.” Tim Coughlin, 50, born in Canada, managing director “... the curried sausage of the people of Berlin.” of Canadian speciality restaurant Tim’s am Winterfeldtplatz
Thierry Prevost, 45, born in France, managing director of Galeries Lafayette Berlin
“... to drink cappuccino after the meal.” Laura Garavini, 41, born in Italy, managing director of the trade union-linked society "Union der Italiener in der Welt"
Photos: typoly
“... wooden lattice fences and to wait at the red traffic light – even when no car is in sight.” Nicol Ljubic, 36, born in Croatia, author and journalist
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“... typical German? ... does not exist.” Neco Celik, 35, with Turkish roots, director and author
About Us – Our Events
How the West Was Won: Spreading the Eastern Germany Success Story Stateside What business opportunities does Eastern Germany offer North American investors? Guests in Toronto, Houston, and Atlanta got the answer to this question at a series of events organized by Invest in Germany’s Eastern Germany team in cooperation with the local bi-national Chambers of Commerce, assigned by the Federal Ministry of Transport, Building and Urban Affairs. about the strong reasons for investing in Germany and why Canadian companies hold CAD 9.4 billion in assets in the country.
and has access to skilled technical labor. Germany's regulatory agencies also move with remarkable efficiency," said Mr. MacLellan. Government incentive provision covering 50 percent of investment costs at the new facility also played a significant factor in the company’s decision to begin production in Eastern Germany.
ing presence in Eastern Germany. Thanks to the region's excellent, highly qualified workforce, Porsche has been producing its Cayenne model in Leipzig with considerable success. As a result, the sports car manufacturer has decided to begin production of its new Panamera model in Leipzig too. The auto industry is a prime example of a manufacturing sector that is thriving in the East, and one which offers myriad opportunities for new entrants across the whole value chain. As well as throwing a spotlight on Eastern Germany's automotive and manufacturing industries, the executive event in Houston also cast light on the fast-growing service and renewable energies sectors in the flourishing east. US investors play a major role in the economy of the region: US investments make up 47 percent of the total investment volume in Eastern Germany invested since 1997.
Other Canadian photovoltaics (PV) companies like 5N Plus have also discovered the advantages of the investment location: 5N Plus is set to open a plant for thin-film PV panels in Eisenhüttenstadt on the German-Polish border. The company chose the location because of the region’s skilled workforce and its proximity to Eastern Europe. At the networking reception and executive dinner, representatives from the Canadian business community were able to learn a lot more 34
Invest in Germany Magazine
At the second roadshow event in Houston, after the welcome address of State Secretary Dr. Engelbert Lütke Daldrup from the Federal Ministry of Transport, Building and Urban Affairs, keynote speaker Dr. Wolfgang Lindheim of Porsche explained the rationale behind the Stuttgart-based company's large manufactur-
The three-city roadshow ended in Atlanta, where Matthias Schönberg of Continental Tire North America gave the keynote address. Here the main focus was on the automotive industry again, with particular attention paid to manufacturers and suppliers. Not only Porsche, but also BMW and General Motors’ German subsidiary Opel have made major investments in Eastern Germany and these expansions signal the creation of new market entry possibilities to suppliers in the automotive industry.
The roadshow title – “How Far East? Rethinking North American Corporate Presence in Germany” – alluded to the fact that overseas investors wanting to serve the Eastern European market can find the optimal location in Eastern Germany. The lively discussions held between guests and hosts showed that the positive attitude of the Canadian and US executives towards the business location Germany is not the exception but rather the standard.
Photos: Invest in Germany
The keynote speaker at the Toronto roadshow was ARISE Technologies Corporation founder Ian MacLellan. ARISE is an Ontario-based public solar technology company which is currently building a EUR 50 million solar cell production facility in the town of Bischofswerda in the state of Saxony. The investment represents the company's first step into the European market. "We selected Eastern Germany because it is the largest solar market in the world. It has a high concentration of solar technology companies,
Bringing International Business Together: Germany’s International Business Opportunity Platform www.e-trade-center.com, the central German internet portal for international business opportunities, enables foreign and German companies to offer their products and services worldwide as well as to place inquiries for products and services they are seeking. Companies can enter their request free of charge by completing an online questionnaire. As a special service, e-trade-center’s supporting institutions – major German business organizations engaged in foreign trade promotion – offer their assistance in publishing business contacts on this site. These entries are marked as “Premium Entries.” On the bilingual website, companies will find the latest international business opportunities enabling them to contact partners all over the world directly.
If the DVD is missing, please contact: request@invest-in-germany.com
e-trade-center‘s premium partners: – German Bi-national Chambers of Commerce Abroad (AHK) –G erman Chambers of Industry and Commerce (IHK) –A ssociation of German Chambers of Industry and Commerce (DIHK) –G erman Office For Foreign Trade (bfai) –A frica-Association (AV) – I bero-America Association (IAV) –G erman Asia-Pacific Business Association (OAV) –D eutsche Gesellschaft für Technische Zusammenarbeit (gtz) –F ederal Chamber of Architects (BAK) –F ederation of German Wholesale and Foreign Trade/ Federation of German Export Trade (BGA/BDEx) –G erman Confederation of Skilled Crafts (ZDH) –G erman Association of Consulting Engineers (VBI) –E ast and Central Europe Association (OMV) –G erman Near and Middle East Association (NUMOV) – iMOVE – Senior Experten Service (SES) Furthermore, the e-trade-center provides access to: – the “market place,” containing countryand sector-specific business opportunities related to a special topic or event. –a dditional matchmaking databases. –u seful online portals, offering infor mation on the German economy and market, trade fairs and exhibitions. – t he services of the German business organizations engaged in foreign trade promotion.
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The German Chamber Network | AHK All Around the Globe: • Algeria • Argentina • Australia • Austria • Belarus • Belgium • Bolivia • Bosnia and Herzegovina
AHK - Your Bridge to the German Market All Around the Globe: The German Chamber Network | AHK 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.
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.
Deutsche Auslandshandelskammern
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.
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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