Germany continues to prove that it embraces the technologies of tomorrow, both as a means to grow its economy and also to be a world player against new economic powerhouses like China. Companies from the United States verify Germany’s place in the world through their investments. More than 3,000 U.S.-based companies have operations or subsidiaries in Germany, employing more than 800,000 workers.

For a nation that held tight to its labor union demands, Germany is introducing new labor laws that make its work force more flexible. Included is the allowance for Saturday shifts, flexible work hours and profit sharing in place of fixed bonuses. The nation continues to reduce government red tape and introduce an internationally competitive corporate tax structure.

While Germany, Europe’s largest economy, has been stagnant for some years, the German Chamber of Industry and Commerce indicates that 16 percent of German companies now plan to hire more workers, compared with 10 percent last year.

The 2006 Economic and Growth Report indicates Bavaria will exceed the growth rate resulting in new employment by 2 percent, well above the average for the whole of Germany. Consequently, Bavaria retains its position as the No. 1 state for job creation in Germany.

Bavaria has witnessed a surge in demand for small and medium-sized business loans, a clear sign of a positive mood change. At the same time, the number of building permits granted rose by 48 percent in the first quarter of this year compared with the same period a year ago. Site location projects are definitely on the rise.

Bavaria Cultivates Closer U.S. Ties

A clear indication is Bavaria’s reopening of its embassy in Palo Alto, Calif., which government officials expect will generate more new business from the western part of the United States.

San Francisco-based eRide opened a development center in Munich in May. The semiconductor company wants to develop dual mode chips for use in the European SatNav project Galileo and the American GPS system.

“Germany in general — and especially Munich — offers an excellent location for our newly developed company,” said Jens Bodenkamp, managing director of eRide Europe. “The innovative automobile industry, the strong mobile telecommunications sector and the European Galileo project provide great market potential.”

A few years back, General Electric set up its first, and as yet only, European research center in Garching. The Research Reactor Munich at Garching was the attraction. Meanwhile, GE Healthcare Germany formally opened its strategic center in Munich. The facility will establish a central service for the Healthcare Technologies and Biosciences units, providing information for its German customers and business partners.

“In Germany, Munich is the center for medical engineering and biotechnology; it is the very nerve center of the country,” said Bernd von Polheim, country manager of GE Healthcare Germany and head of the Commercial Center. “The establishment of a central Commercial Center at this site is a major investment in the future, in particular in light of the many opportunities for cooperation presented by the GE Global Research Center in Garching.”

Adopting new technologies also provides Germany with a protective edge in manufacturing. For example, when 2,900 solar panels were needed to complete the new roof of the Stillwell Avenue Train Station in New York City, its architects turned to Glaswerke Arnold of Merkendorf, Baden-Wittenberg, the only company with the know-how to correctly apply solar film to glass panels.

Trailblazing the renewable fuel frontier, the University of Hohenheim, traditionally strong in agriculture, now operates one of Europe’s most advanced biogas laboratories. It will concentrate on optimizing the production of fuel from biodegradable sources and was recently designated the coordinating body for all bioenergy research activities in the state of Baden-Wurttemberg.

In Wegberg, near Aachen, Clyvia Technology GmbH, a subsidiary of Las Vegas-based Clyvia Inc., launched a pilot facility in July for the transformation of waste oil into light heating oil. In August, the first large-scale test of the facility was successfully completed, producing more than 520 gallons of heating oil. Heating oil is chemically identical to diesel fuel. In the future, not only waste oil, but also cleaning oils, oil sludge and plastics will be used as raw materials. The $3.64 million facility has an annual capacity of 4,000 tons and is intended for production.

Clyvia expected to begin with serial production of the facilities in September. They are, therefore, useful for different industries: recycling, industrial companies, the oil industry, automotive scrap plans, rail industry and seaports. In Germany alone, Clyvia estimates the potential at around 500 facilities.

Benefits of the East

Berlin-Brandenburg has established itself in international competition as a prime location for high-tech, modern service companies and the processing industry. It is distinct in that it offers seven universities, 21 colleges and polytechnics, and 250 research institutes.

China’s second largest computer notebook maker, Hasee, has established offices here. The company is planning to use the Berlin location as a base to build its European operations.

A number of former eastern German locations are prime for high-tech advancement. Simtek, a U.S.-based supplier of integrated memory circuits, has opened a product development and customer service center in Dresden, Saxony, a location that is “an ideal scientific and engineering environment,” according to the company.

U.S. chipmaker AMD is investing $3.25 billion in its operations in Dresden. The company already operates two plants to manufacture silicon wafers, as well as a design center there. The state of Saxony is supporting the investment with a number of incentives. The company has been active in Dresden since 1996, and by 2008, AMD will have invested nearly $10.5 billion there.

Elsewhere, the state of Thuringia has attracted U.S. automotive supplier BorgWarner, which is investing $33.8 million in Arnstadt to help the company meet the growing demand for transmission systems.