Germany, along with Europe, is in the midst of a period of unsurpassed change as nations embrace the Euro currency and economic harmonization efforts.

Long known for its efficiency and industrial power, Germany appears poised to continue its legacy of success as it continues to offer international firms educated workers, incentives and world-renowned productivity.

“As to Germany’s place at the crossroads of the new Europe, it is only necessary to experience the choked E-40 autobahn that passes Weimar,” writes The Wall Street Journal’s columnist George Melloan. “Trucks carrying goods between West European points and Poland, the Czech Republic and other points east rumble over a highway that only a few years ago was lightly populated. … This is the new face of commerce in central Europe.”

“We are the strongest economy in Europe, and are one of the world’s three leading export nations,” said Peer Steinbrueck, minister, Economy Technology and Transport in the German state of North Rhine-Westphalia. “There has been a kind of geographic shift which — obviously — did not mean we physically moved at all. Until 1989 we were a border or front state, right up against the ‘Iron Curtain.’ Today we are in the middle of Europe.”

With its major cities of Cologne and Dusseldorf, the state of North Rhine-Westphalia exports about $160 billion worth of goods and services each year.

“Thirty-four of Germany’s top hundred companies have headquarters (here). Among these, the most important economic sectors are chemical, engineering, metal manufacturing and processing, automobiles and vehicle parts, media services, logistics and food,” Steinbrueck said.

Multimedia attraction

In Bavaria, which prides itself on being a leader in bio and information technology, communications is also attracting major media players. In March, Disney Character Voices International and Todd-AO Corp. signed a letter of intent with the state to build a modern Munich studio to be used for the company’s dubbing and post production activities. At the same time Multimedia, the journal of Germany’s online industry, ranked Bavaria the nation’s leader in the production and dissemination of Internet-based services and content.

Clearly this breadth of capabilities was in the minds of non-German companies which, last year, invested $17 billion in Bavaria.

Biotech continues to be essential to Bavaria’s extraordinary growth. Since the early 1990s, the number of biotech and related life science companies has grown at an 18 percent annual rate. Four-fifths of these companies are headquartered in greater Munich.

Firms there include the Max Planck Institutes for Biotechnology and Neurobiology, the University of Munich’s Gene Center and soon-to-be-completed  schools  of chemistry and pharmacy.

But Bavarian biotech activities are not solely focused on its capital city. Major growth is also evident in and around the University at Regensburg. There, world-class research is conducted into applications of bacteria. Nuremberg, Wurzburg and Erlangen are also vital biotech development centers.

Along with the prominent presence of information technology giants such as Microsoft, Intel, AMD, Compaq, Sun, Netscape and AT&T — all of which base their German headquarters in Bavaria — many site selectors have been impressed with the state’s labor pool.

Transportation advantages

North of Munich lies the trading and industrial city of Hamburg. In 1998, Europe’s second busiest port city saw some 117 companies generate or preserve approximately 10,000 jobs. 

Total new international investment in Hamburg reached $400 million last year. International trade, logistics, media and related services are among prime attracting forces, drawing multiple entries from such diverse sources as the Commonwealth of Independent States, Scandinavia, Taiwan and Turkey.

With  further European Union interaction with the Baltic States, Poland and the Czech Republic on the horizon, Hamburg’s economic climate is expected to enjoy another dynamic and lasting push.

Among key Hamburg industrial sectors are aircraft maintenance repair and services, call centers, multimedia/Internet, computer software, film production and transportation. For companies needing maritime access, Hamburg’s container traffic last year grew by 6.3 percent. 

Even though Hamburg trails only Rotterdam among leading European ports, major growth plans are afloat to keep it in the forefront of modern sea transport.

The city of Hannover takes the world stage in June of next year. Hannover will be home to World Expo 2000, which will feature booths and demonstrations from countries around the world.

The Expo gives Hannover a chance to show off its strong points to leaders from all corners of the globe. A total of 54 countries will be building their own pavilions. The  Hannover metropolitan area contains over 1 million people, and it is ideally situated in central Germany.

At the heart of Germany, and Europe’s business and financial activities, Frankfurt recently got some good news. In July, an agreement was signed for the withdrawal of the U.S. Rhine-Main Air Base from Frankfurt Airport. That will free up space for commercial development.

When the agreement is finalized, this real estate should be desirable to a wide range of manufacturing and service-oriented operations.

Frankfurt’s existing cargo airport already provides an advantage to businesses.  CargoCity Frankfurt is an intermodal airport devoted entirely to the movement of goods, which is a part of the Frankfurt Airport. Companies can link to Europe’s rail network and road system directly from the airport.

The Danube region also boasts a strong transportation network connecting it to the rest of Europe. The Danube River connects Germany with the Czech Republic, Hungary and Slovakia, while a network of airports and highways allow goods to move efficiently.

The region also provides trained workers, with universities in Passau, Regensburg and Linz and colleges in several locations.

Technology center

Of course the region with perhaps the greatest development possibilities remains eastern Germany. A decade after the Berlin Wall fell, remarkable strides have been made to awaken this sleeping giant following 44 years under Soviet control.

For example, Saxony has attracted more than 350 microelectronics firms in the past few years. Draws include its central location, educated work force, and government financial incentives. This is also the location of joint ventures between Motorola and Siemens, Semicondutor300 and Advanced Micro Devices.

Saxony, with a population of 4.6 million, offers ready access to central and eastern nations such as the Czech Republic and Poland. Long involved in the earliest development of semiconductors, Saxony offers four highly-rated universities and five technical colleges, and a highly-skilled work force available at competitive wages.

“The Technical University Dresden and the University Chemnitz-Zwikau are absolutely top addresses for microelectronics,” said Martin Gillo, CEO of AMD Saxony Manufacturing GmbH Electronics.

Gillo’s firm has been in Saxony since 1996 when Advanced Micro Devices Inc. of Sunnydale, Calif., broke ground in Dresden for a semiconductor plant. This plant, where production of leading edge Kryptonite 6 microprocessors is to occur, is set to make its debut this year.

Other U.S. firms with Saxony investments include Applied Materials of Santa Clara, Calif., and American Microsystems of Pocatello, Idaho.

Biotech companies find success

In Germany’s capital of Berlin, biotechnology is providing a welcome infusion of economic growth. For example the three-year old Max Delbruck Center for Molecular Medicine is one of the clear beneficiaries of the government’s 1996 decision to lift strict limits on biotech research.

The center, located across the street from two hospitals, lets doctors team up with scientists to test out breakthroughs, and companies turn their diagnostic tools and therapies into commercial products.

Fully-fitted lab space there costs less than half the price of comparable facilities along Maryland’s Route 270 biotech corridor. Local and German governments offer sizable rebates on capital investment and other incentives for research, development and training.

The center is home to 28 companies employing some 800 scientists. Ten of these tenants signed on last year. Among U.S. firms at Delbruck is Ribozyme Pharmaceuticals, which develops new drugs as well as animal, health and agricultural products.

In June, 1998, the company bought a small Berlin company named Transgenics and folded it into a new subsidiary dubbed Atugen Biotechnology.

“Ribozyme was able to cherry-pick some top scientific talent, and Transgenics immediately raised its profile,” said Gunter Rosskamp, vice president for life sciences at the Industrial Investment Council, which works to attract foreign investment to eastern Germany.

“Atugen opened its doors with $20 million in the bank,” said Rosskamp. “That’s hardly the profile of a biotech beginner these days in the U.S. There, financing for small startups has virtually vanished.

“Between Germany’s ready cash and cutting edge technology, how can U.S. biotech companies afford to stay at home?”

Berlin is located in the state of Brandenburg, the fifth-largest state in Germany, in terms of land mass. The region is also conveniently located for companies trying to reach a large audience in Europe.

Within one day’s drive, companies can reach 200 million people in Europe. The new Berlin Brandenburg International Airport, scheduled to be constructed south of Berlin, will add to the transportation access in the region.

The region provides a skilled work force to its companies. There are six universities and 21 colleges in the area with a total attendance of 130,000.

The state offers several incentives to foreign companies looking to invest. In some instances, the state picks up 35 percent of expansion costs, and even more for small- and medium-size companies. The aid comes in the form of investment grants, tax incentives, low-interest loans and worker training.