investment guide - L-Bank
Transcription
investment guide - L-Bank
INVESTMENT GUIDE @ Baden-Württemberg Investment Guide Baden-Württemberg 3 WELCOME TO BADEN-WÜRTTEMBERG! Baden-Württemberg is an attractive place, one that appeals to skilled specialists and companies from a wide range of disciplines and regions. The state located in southwestern Germany is known for its ability to integrate. This is a particularly important factor for companies that need highly trained specialists, an exceptional infrastructure and cooperative businessdevelopment programs. of Baden-Württemberg is helping technology companies turn their new developments into market-ready innovations and remain globally competitive. The strength of Baden-Württemberg continues to be underpinned by the automotive and mechanical-engineering industries, both of which are among the most important and innovative sectors in the state. Both industries are projected to increase their exports over the midterm. Baden-Württemberg’s economy is a driving force at home in Germany and abroad. In one reflection of this strength, for years the state has ranked first among Europe’s most innovative regions on the Innovation Index of the Baden-Württemberg Statistics Office. This ranking is achieved not only by successful major corporations, but also primarily by the many small and midsized enterprises in the state while being supported by an alliance of university and nonuniversity research institutes. For years now, Baden-Württemberg has been promoting this close relationship between the worlds of theory and practice as part of its business-development activities. Much is happening right now in this dynamic state. These developments serve as a good reason for the publishers of “Investment Guide Baden-Württemberg” to release a completely updated and expanded version of the publication. The innovation guide paints both a broad and detailed portrait of a state that is the leader in many areas, offers pinpoint investment support and is a great place to live. With this compass in hand, every business traveler can easily find his or her way around Baden-Württemberg. We look forward to seeing you! Baden-Württemberg has everything it needs to remain a leading business and research location in the future—and even expand it. The state commands a broad, first-class economic structure. Added to this are an exceptional research and university landscape and a broad alliance between academia and business. This is clearly seen in terms of digitization of the economy in general and in Industry 4.0 in particular. These megatrends are fueling nearly every industry and market today. With the innovation push in its investment-support programs, the state DR. ULRICH THEILEIS VICE CHAIRMAN OF THE MANAGEMENT BOARD OF L-BANK DR. ANDRÉ HÜLSBÖMER MANAGING DIRECTOR F.A.Z.-INSTITUT TABLE OF CONTENTS 1 Quality of Life starting on page 5 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 The Baden-Württemberg brand People and places Vacation region Baden-Württemberg, the land of connoisseurs Art and culture Sports and leisure time Work-life balance School education 2 Infrastructure in Baden-Württemberg— a Solid Foundation starting on page 17 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.2 2.2.1 2.2.2 Central infrastructure Trade-fair and exhibition centers Transportation and transportation infrastructure Modern administrative practices Broadband service Labor pool and job market Science and education Research and development (R&D) University degree programs and vocational training 3 Economic structure and business development 5 7 7 8 9 12 14 14 17 17 20 21 22 22 24 24 30 starting on page 36 3.1 3.2 3.3 Economic structure Regional economic clusters Economic performance and development 4 Investment-support programs for companies starting on page 53 4.1 4.2 4.2.1 4.2.2 Contact partners Investment-support programs External financing Equity and equity-type financing (mezzanine financing) 4.2.3 Loan guarantees 36 39 51 53 57 58 58 60 5 Overview of company law and business taxes starting on page 61 6 Contact addresses starting on page 64 Investment Guide Baden-Württemberg 5 1 QUALITY OF LIFE @ Baden-Württemberg, Germany‘s southwestern-most state, really does live its culture of openness and hospitality quite literally. The state welcomes skilled specialists and investors from Germany and abroad by providing them attractive opportunities that enhance their careers and lives outside of the work environment. Surveys continue to validate the high quality of life in Baden-Württemberg, whether in urban or rural areas. People here enjoy beautiful landscapes and a broad spectrum of cultural and sporting activities as well as numerous vacation and leisure-time opportunities. The State Statistical Office recorded 49.2 million overnight stays in 2014, a state record. Baden-Württemberg provides families with a diverse, first-class childcare and education system that ranges from kindergartens to universities and addresses every need and requirement. Such great fundamentals are reflected in a population figure of 10.6 million—the highest it has ever been. This growth has been fueled in particular by the influx of people coming to the state. More than 70,000 people moved to Baden-Württemberg during 2013. 1.1 THE BADEN-WÜRTTEMBERG BRAND “Made in Baden-Württemberg” is a well-known concept around the world. Corporations like Daimler, Porsche, Bosch and SAP are global players headquartered in the state. The state capital, Stuttgart, enjoys a high degree of international recognition, thanks to all that it has to offer in so many respects. In 2014, the city registered nearly 3.5 million overnight stays, which means another increase compared with previous years. Vacationers are drawn to the tourist hot spots in the Black Forest and on Lake Constance as well as to Heidelberg and Baden-Baden. But in terms of tourist destinations, Baden-Württemberg has so much more to offer. Visitors to all parts of the state will find so many charming towns, cities and countrysides well worth visiting. That applies to attractive countryside tours on foot or by bike, to recreational parks like Europa Park in Rust, to magnificent palaces and castles, and to vibrant towns and cities. Everywhere in the state, great importance is attached to quality of life. Baden-Württemberg continues to be able to persuade the large numbers of people who have relocated here that this region is a great place to live and work. The foundation for this high standard of living has been laid by an economy that has made the southwestern state one of the leading business locations in the world for many industries. In this respect Baden-Württemberg benefits from the robust economy in the rest of Germany and in key export markets. In 2014, the An Alpine panorama at Lake Constance. Source: City of Friedrichshafen, www.gerhardkassner.de. 6 Investment Guide Baden-Württemberg state’s economy grew in real terms by 2.4 percent compared with 2013, the strongest in three years. GDP growth of 2.3 percent is forecast for 2015. Baden-Württemberg has been historically characterized by a high level of employment. In September 2015, the state’s unemployment rate totaled 3.8 percent, second only to Bavaria as one of the lowest rates in Germany. Baden-Württemberg is also one of Europe’s top innovation regions. The 2014 Innovation Index calculated by the State Statistical Office ranks Baden-Württemberg in first place by some considerable margin, making Baden-Württemberg the region in the EU with the greatest power to innovate. This top position can be attributed in particular to the state’s vigorous, research-intensive industrial sectors, such as vehicle manufacturing, mechanical engineering and electrical engineering, as well as to the high concentration of patent registrations in the state. tancy. Today, a newborn boy in Baden-Württemberg has an average life expectancy of 79.2 years. For a newborn girl, that figure is even higher at 83.7 years. These age levels demonstrate the high quality of life in the state through which the Rhine and Neckar rivers flow as well as the population’s pronounced sense of health awareness. After all, the latter is a key factor in life expectancy according to statisticians. Another of Baden-Württemberg’s strengths is its superb education system. Secondary schools and institutions of higher learning as well as secondary-school and college students in the state perform at a strong above-average level in national and international studies and competitions. This outstanding performance is reflected in the top scores achieved by high-potential individuals just as much as in the overall high average standard of education throughout the entire education system. The educational institutions in Baden-Württemberg have achieved such a degree of transparency that every young person can receive a school Innovations drawing from intensive research and development work are not and vocational education that matches only generated by global corpohis or her own abilities and interrations. The backbone of the ests—with the gratifying result state’s economy is a strong that youth unemployment is and healthy midsized busionly 3.1 percent. This is the ness sector, which also lowest rate in Germany. conducts a great deal of The newly launched collective school (Gemeinresearch and development work itself. Hardschaftsschule) concept ly any other region in helps ensure that future Europe can boast such academic success of individual students is less a robust midsized business sector as the dependent on a person’s social background backbone of its economy than previously. Indeed, as Baden-Württemberg. Baden-Württemberg has More than 99 percent of one of the lowest school all companies in the state dropout rates in Germany. At are businesses with up to the same time young people 250 employees. The standouts among them include the in the state can take their first The historical town of Tübingen. approximately 300 hidden chamsteps on the career ladder more Source: Ulrich Metz, Tübingen. pions—midsized global market leaders quickly after completing their college that develop state-of-the-art technology education or vocational training programs products and components and sell them in the than in other regions. A very important point for global market. With 3.8 global market leaders per 100,000 parents who work is this: The state is improving employees’ inhabitants, Baden-Württemberg has the highest concentration work-life balance by increasing the number of childcare facilities and all-day schools. of these pacesetters in their industries compared with all other states in Germany. The number of global market leaders totals This overview of the state exemplifies what characterizes more than 400. The midsized business sector employs the bulk Baden-Württemberg and its people as well as what employees of highly qualified skilled specialists and executives working in and investors who come to the state can expect to encounter: the state and is looking to recruit new employees. The state’s open-mindedness, a passion to perform and inquisitiveness. economy is underpinned by an excellent research infrastructure, That applies to every region in Baden-Württemberg, to the especially as far as innovations are concerned. Foreign trade technology-oriented metropolitan areas of Stuttgart and Karlsprofits in particular from these parameters, with an export share ruhe as well as to the regions along the Rhine and to Hohenof about 50 percent. lohe and Upper Swabia. This points to another of Baden-Württemberg’s strengths: its structural balance. The entire state Baden-Württemberg also achieves great results in other areas features a tightly woven network of educational and research of life. Since the beginning of the 1970s, people in the southwestern state have regularly had Germany’s highest life expecfacilities as well as companies that cooperate with each other in Investment Guide Baden-Württemberg industrial clusters consisting of research and production facilities. As a consequence, the concept of a structurally weak area in Baden-Württemberg is alien. 1.2 PEOPLE AND PLACES The focus has always been on people in Baden-Württemberg. As a reflection of this, the formation of the state was approved in a referendum before it was formally established on April 25, 1952—a unique occurrence in the Federal Republic of Germany. On December 16, 1951, the majority of voters in Württemberg-Baden, Württemberg-Hohenzollern and Baden voted for the merger to form a new federal state. Theodor Heuss, the first president of West Germany and a native of the Swabian region himself, called the new state a “model of German possibilities.” The referendum in favor of establishing the state proved to be the opening chapter of a success story that is still being written today. The current population of Baden-Württemberg totals more than 10.6 million people. This represents an approximately 60 percent increase since 1952 when the state was established. Buoyant immigration from other parts of Germany and from abroad keeps the population level steady, regardless of demographic trends. The most populous cities are Stuttgart (604,000 residents), Karlsruhe (299,000 residents), Mannheim (297,000 residents) and Freiburg (220,000 residents). Baden-Württemberg covers more than 35,751 square kilometers, making it Germany’s third-largest state by area. Its southern neighbor, Switzerland, is only slightly bigger, and Belgium is somewhat smaller. Baden-Württemberg has comparatively few natural resources, however the state is rich in the talents and creativity of its inhabitants. The people in Baden-Württemberg are known as tinkerers who continue to come up with new ideas and refine them into marketable products. The most famous invention from Baden-Württemberg, which revolutionized the world, was the automobile. Inventors like Carl Benz and Gottlieb Daimler are part of a long line of technical experts and engineers who have helped make the state what it is today: one of the most successful technology regions in the world. The people in Baden-Württemberg not only have an affinity for technology, they also demonstrate their abilities in the fields of art and culture. Many famous individuals come from Baden-Württemberg, including the great writers, Friedrich Schiller, Hermann Hesse and Martin Walser. Having a sense of history and place as well as receptiveness to progress and modernity: these are the hallmarks of the strong bond between tradition and innovation in Baden-Württemberg. The Black Forest is one of the regions in Baden-Württemberg most steeped in history. But this rural upland area, located on the boundaries between the state regions of Baden and Württemberg, is also home to a number of highly specialized midsized companies that are world leaders in their niche markets. The state is diverse, and this diversity is Baden-Württemberg’s strength. Its residents have a strong sense of place, while 7 being cosmopolitan, creative and affable as well as colorful and socially cohesive. Tourist links: www.tourismus-bw.de www.familien-ferien.de www.urlaub-bauernhof.de www.heilbaeder-bw.de www.naturparke-bw.de www.camping-bw.de www.rad-blogger.de 1.3 VACATION REGION Tourism in Baden-Württemberg is synonymous with variety. The state offers both attractive amusement parks and highly rated health resorts as well as diverse landscapes and a rich assortment of city and cultural programs. Baden-Württemberg has more than 2,000 protected areas. Mountains, forests, gorges, river valleys, caves, rock formations, lakes and vineyards are great places for visitors to explore while hiking, bike riding, climbing, swimming, diving, paddling, walking and cycle touring. Visitors can actively explore each of the state’s regions on hiking and long-distance biking routes totaling more than 50,000 kilometers. This is particularly the case in the seven natural parks. Each day, historical cities like Heidelberg, Freiburg and Tübingen welcome thousands of visitors from all over the world. With 57 certified spas and health resorts, Baden-Württemberg is Germany’s top spa location. The Black Forest in particular is well known for such health resorts as Bad Dürrheim, St. Blasien, Baden-Baden and Bad Herrenalb. These places have a special climate that is praised for its salubrious effects. The highest concentration of star restaurants also attracts visitors. In addition to the Black Forest, Lake Constance, the Swabian Alps, the Neckar Valley and the Hohenlohe and Allgäu regions are all visitor magnets. All tourist regions are linked to the public rail network and are also easy to reach by car. The state government promotes sustainability as a key aspect of its tourism strategy. The projects receiving state funding include sustainable tourism and improvements to the tourism infrastructure. A project called the “Green South” bundles tourism opportunities in the areas of outdoor enjoyment, environmentally conscious mobility and climate-compatible accommodation as well as sustainable regional products and cuisine. Baden-Württemberg remains one of Germany’s most frequently visited destinations. An attractive location featuring an unspoiled natural environment, sport and leisure activities, art and culture as well as festivals and events offers every visitor a welcome getaway from the routines of everyday life. Monuments and museums, castles and gardens, events and exhibitions all provide visitors an opportunity to share in the state’s traditions and cultural identity. That is positively reflected in the travel industry’s results. According to the State Statistical Office, the number of overnight 8 Investment Guide Baden-Württemberg Helder & Leeuwen Kaffeeroester, Mannheim: Coffee enjoyment in Grid City and beyond At the beginning of 2007, Enver Atabay and his former business partner launched their own coffee roasting company, Helder & Leeuwen, located in Mannheim’s Quadraten (grid district), the center of the university city, by registering their business. “We conducted extensive research into coffee roasting for 18 months beforehand and developed a business and finance plan for our start-up,” qualified commercial lawyer Atabay explains. In September 2007, the founders started roasting coffee in a back-yard opposite the Water Tower, Mannheim’s landmark. The retail store they planned to open was initially still occupied and only opened in March 2008 following conversion work, including the installation of a bar. Yet the idea of running a coffee house died after just one year. “The business numbers just didn’t add up,” Atabay acknowledges. “Since that time, I have developed huge respect for anybody who becomes selfemployed in the food-service industry because it’s tough.” So Enver Atabay focused on his roasting facility. He and his business partner initially financed their coffee-roasting equipment by borrowing money from family and friends. Prior to that, they had failed to secure loan financing from a major bank. The start-up entrepreneurs were initially not in a position to repay these private loans. In the end, their relationship bank, a savings bank, partnered with Bürgschaftsbank Baden-Württemberg to assist the founders to restructure their debt. This former start-up is now growing steadily and generating profits year after year. That provides the financial security and latitude to be able to expand the business. Atabay relocated his coffee-roasting facility, warehouse and online sales operation to Mannheim’s Hafenpark, while the retail store, offering around 30 different coffee varieties, remained in Mannheims city center (Quadraten). these positive signs relating to overnight accommodations in Baden-Württemberg could also be seen in individual segments. In one reflection of this, the overall hotel segment—the industry’s core sector–posted above-average growth of 3.8 percent in overnight bookings. Camping vacations are also increasingly popular, as demonstrated by the 5.4 percent growth in overnight stays. The economic significance of tourism can be observed in the ratio of overnight stays to 1,000 residents. In particular, four counties stand out: Breisgau–Upper Black Forest county, the urban district of Baden-Baden and the counties of Freudenstadt and Lake Constance. The growing importance of city tourism is demonstrated by the fact that four other urban districts—Heidelberg, Freiburg, Stuttgart and Ulm have joined the traditional tourist destination of Baden-Baden to boast an above-average ratio of overnight stays. A comparison with 2008 shows that the number of municipalities with the most overnight stays has remained stable over the course of time. Most municipalities were able to improve their overnight-stay figures. The town of Rust, home to Europa-Park, has firmly established itself among the leading tourist destinations in the state, ranking behind the cities of Stuttgart, Freiburg, Heidelberg, Mannheim and Karlsruhe. Culinary links: www.tourismus-bw.de www.schmeck-den-sueden.de www.badischer-weinbauverband.de www.weinbauverband-wuerttemberg.de www.weininstitut-wuerttemberg.de www.turmbergwein.de www.einfach-besser-bier.de www.dehogabw.de 1.4 BADEN-WÜRTTEMBERG, THE LAND OF CONNOISSEURS Today, the company employs two full-time staff and three temporary helpers. Atabay also partners with subcontractors at events, such as the IAA in Frankfurt (International Motor Show). Helder & Leeuwen’s sales territory therefore extends way beyond the Rhine-Neckar region. “We receive plenty of private orders from people who originally come from here,” Atabay explains. “They want to enjoy their coffee even after they have moved away.” Baden-Württemberg is extending its lead in Germany’s finedining league. The 2015, the Michelin Guide awarded one, two or three stars to 77 restaurants in Baden-Württemberg in acknowledgment of their good to excellent cuisine. That speaks volumes for the vast range of culinary options in this first-class land of connoisseurs. Baden-Württemberg’s chefs continue to receive prestigious awards for their cuisine. Baden-Württemberg now heads the German rankings with a total of two threestar, six two-star and 68 one-star restaurants. stays during 2014 increased to more than 49 million. In 2014, as in previous years, this increase could mainly be attributed to visitors from abroad. According to the State Statistical Office, 4.5 million visitors with foreign residence booked at least one overnight stay in Baden-Württemberg last year. Overnight stays by foreign visitors exceeded the 10 million threshold for the first time in 2014 by reaching 10.3 million. The number of overnight stays booked by visitors from Germany also increased in 2014 over the previous year, setting a new record. In 2014, One municipality in the state that is worthy of special culinary mention is the Black Forest village of Baiersbronn. In 2014, master chef Harald Wohlfahrt, executive chef of the Schwarzwaldstube in Baiersbronn again retained his third star, which he has now been awarded 23 consecutive times—more than any other leading German chef. People even refer to a Wohlfahrt school of cuisine now. After all, students of the master chef demonstrate their culinary prowess in six restaurants that have each been awarded a new Michelin star. These include Paul Stradner from Brenners Park-Restaurant in Baden-Baden and Peter Hagen, Investment Guide Baden-Württemberg 9 colonization. Anyone who today travels through the winegrowing regions of Baden-Württemberg will find a large number of wineries serving fine wines from the bottle or the barrel. There are many wine taverns throughout the state ready to welcome visitors. Chefs at the Sennhütte in Tegernau. Source: Grether. With a share of around 25 percent of Germany’s overall wine-growing land, Baden-Württemberg is the country’s second-largest wine-growing state behind RhinelandPalatinate. Both Baden and Württemberg have several different wine-growing regions. The different altitudes, soils and climate conditions yield a fascinating variety of grapes. Trollinger is Württemberg’s best-known grape variety and regarded as the Swabian national beverage. In Baden, more than half the wine-growing area is dedicated to burgundy-type red and white grape varieties. This area extends from the north to the south, practically covering the entire Baden side of the Rhine River. Every year in the late summer and fall, the state’s wine-growing regions hold their traditional wine festivals, attracting many visitors from Germany and abroad. executive chef at ammolite—The Lighthouse Restaurant at Europa-Park in Rust. Five of the 11 three-star restaurants in Germany are also headed by former Wohlfahrt students. A total of two three-star restaurants are located in Baden-Württemberg: In addition to Wohlfahrt’s Schwarzwaldstube there is Restaurant Bareiss, also located in Baiersbronn. Not only good wines but also famous beers are produced in Baden-Württemberg. The state’s breweries take advantage of the excellent quality of the water and its numerous natural mineral springs to brew fresh beer. The most popular beers include products brewed by the Badische Staatsbrauerei Rothaus in the Black Forest. Yet “Baden-Württemberg, the land of connoisseurs” has so much more to offer. In addition to wide-ranging international fare, the state’s regions offer their very own specialty dishes and beverages, almost all of which are made using locally produced agricultural products. The beef stew called Gaisburger Marsch, Linsen mit Spätzle (lentils with Swabian noodles), Maultaschen (Swabian dumplings) and Schupfnudeln (thick noodles) are wellknown, popular traditional dishes representing Baden-Württemberg’s good home-style cuisine. Since 1996, the state has been promoting the campaign Taste the South—Baden-Württemberg. Restaurant owners who participate in the program provide their guests with an extra range of special regional or seasonal dishes or beverages. Among the state’s festivals, the Cannstatter Wasen in Stuttgart is by far the largest. Boasting more than 330 enterprises and up to 5 million visitors, it is Europe’s biggest carnival and covers an area of 35 hectares. Art and culture links: www.kultur.baden-wuerttemberg.de www.schloesser-und-gaerten.de www.landmuseen.de http://mwk.baden-wuerttemberg.de www.tanzszene-bw.de 1.5 ART AND CULTURE Baden-Württemberg both hosts and organizes a large number of internationally well-known events dedicated to the culinary arts. This makes “Baden-Württemberg, the land of connoisseurs” a firm fixture at many trade fairs. Since 2007, the annual consumer trade fair Markt des guten Geschmacks – Slow Food Messe has been held in Stuttgart. It is an event that focuses on conscious enjoyment as well as healthy, sustainably produced food. Viniculture and beer brewing—quality through tradition and expertise Baden-Württemberg is well known throughout the world as wine-growing country. The beginnings of the state’s traditionfilled viniculture industry stretch back to the era of Roman Maintaining traditions and securing their relevance in the present—this is a core responsibility of a society’s culture. Baden-Württemberg is a modern cultural region that consciously addresses its history while remaining receptive to the new and modern. This polarity between tradition and innovation creates a fertile environment and supports the state’s cultural identity with its sweeping forms and variations. This concentrated, multifaceted artistic and cultural landscape in Baden-Württemberg boasts so many highlights. In numerous cities, the state sustains theaters, music ensembles, museums, archives and colleges of art and music that reflect international standards of art and culture. Visitors will find such cultural opportunities in the metropolitan areas of Stuttgart and Karlsruhe as well as in midsized cities and towns and in rural areas. The state and municipalities—frequently in cooperation with companies and 10 Investment Guide Baden-Württemberg The Festspielhaus in Baden-Baden. Source: Festspielhaus Baden-Baden. private sponsors—act as patrons of a cultural life that is diverse, experimental and passionate. The pillars of artistic and cultural life in the state include the Württembergische Staatstheater Stuttgart with its worldrenowned ballet company, the Freiburg Baroque Orchestra, the German Literature Archive Marbach, the Center for Art and Media Karlsruhe, and the Akademie Schloss Solitude in Stutt- gart. Baden-Württemberg has two state theaters, three regional theaters, nine municipal theaters, about 50 privately run theaters and many amateur theaters. The state currently funds 16 theater festivals, including the Heidelberger Stückemarkt, the Internationale Schillertage and the Mozartsommer in Mannheim as well as the Tanz! dance festival in Heilbronn. The dance scene in Baden-Württemberg covers a wide range of styles, from multiple-award-winning classical ballet in the state theat- SDN Präzisionstechnik GmbH, Denkingen: Serial production of turned components for the global market Realizing their full potential and bringing their own ideas to life are powerful incentives for people starting up their own companies. Alexander Buschle was, in his own words, “an unhappy employee for many years,” one who wasn’t allowed to implement his ideas about personnel policies and optimized processes at his old employer. The cutting-machine operator’s search for a suitable company turned out to be tough. Takeover candidates frequently lacked substance because of outdated machinery, or sole proprietors withdrew their offers for sale. That was until an insurance representative let Buschle know about a supply company that sold springloaded plungers. Based in the Swabian town of Aldingen, Schwer Dreh- und Normteile GmbH, SDN for short, was the name of the 70-year-old company whose operations Buschle leased for five years in 2007 and then bought outright in 2012 with a loan from his relationship bank. Right from the start, the new CEO digitized the company from top to bottom and modernized its administration and logistics functions. SDN has been manufacturing spring-loaded plungers and precision-turned components in a new building in Denkingen since 2011. With 26 full-time employees and 20 shelteredworkshop staff, the company now provides an extensive product catalog that incorporates around 760 standard components. Added to these are some 480 customer-specific CAD components. Buschle abandoned the turned-part supply business of his predecessor as a result of the global economic crisis in 2009. “Our profit margins evaporated completely,” he recalls. “On the other hand, we took advantage of our proprietary manufacturing opportunities.” The company now uses 14 machines to manufacture around 60 percent of the turned components it sells, while it purchases the remaining 40 percent from four turneries in Baden-Württemberg. SDN supplies these products to nearly 300 customers from the mechanical-engineering, medical-technology, automotive-supplier and aerospace industries. One-third of the company’s output is exported, especially in the EU, but also to the United States, Switzerland and Israel. This has enabled Buschle to implement many of his ideas, including where personnel are concerned: Working with mentally handicapped colleagues from the organization Lebenshilfe Rottweil has become an integral and indispensable part of SDN’s value chain. Investment Guide Baden-Württemberg 11 European School Karlsruhe: The educational home of 14 languages It’s routine for the European School Karlsruhe (ESK) to admit and integrate international students whose parents’ global careers take them to western Baden-Württemberg. “As one of 14 European Schools, we are supervised by all the EU member states,” the school’s Danish director, Tom Høyem, explains. “And we teach European values such as openness, tolerance and democracy to our students.” Located in north Baden, ESK opened in 1962 initially to educate the children of officials working at the Institute for Transuranium Elements (ITU), a European Commission research organization. The school has long been open to students from European and non-European countries, and now the share of ITU students comprises only 20 percent. Classroom instruction is conducted in three core languages, German, English and French, as well as in all relevant native languages. The school provides the approximately 1,000 students with an educational program that ranges from kindergarten through the European Baccalaureate level. The around 160 staff members at ESK come from all EU member states and teach subjects in their native languages. The school’s catchment area has almost as broad a reach as the backgrounds of its teaching staff: “Our students come from the entire Karlsruhe technology region and beyond,” Høyem outlines. “That means from Mannheim and Heidelberg in the north, Strasbourg in the south and Stuttgart in the east.” Høyem does not dispute the fact that many parents need to be earning good salaries to be able to send their children to the school in Karlsruhe. But: “We have concluded more than 150 agreements with companies ers to free dance and contemporary choreography and performances. TanzSzene BW is an association of professional dance companies and representatives of the free-dance community in Baden-Württemberg that focuses on developing dance in the state. The state’s musical life is a vibrant mosaic of many different styles and genres. In Baden-Württemberg, music lovers will find an excellent range of options that includes everything from classic and contemporary music to jazz and pop. The state supports the theater orchestras at state and municipal theaters, Südwestrundfunk’s Radio Symphony Orchestra and eight cultural orchestras. As a result, the state provides a first-class program of concerts and enables ensembles to represent the state during guest performances around the world. Pop music and youth culture play an important role in Baden-Württemberg’s society, culture and economy. The state’s Popakademie was established in 2003 in Mannheim as a source of inspiration for the music industry. A number of regional pop centers act as points of contact for musicians, trade associations and businesses. The Popakademie’s RegioNet project oversees the integration of existing structures and networks. that pay the school fees and then settle up individually with their employees.” In addition, a certain number of reduced-price openings are available to parents who have a particular reason for their children to attend ESK. School fees total between 2,000 Euro and 6,000 Euro a year. The curricula, which are coordinated throughout the EU, and the European Baccalaureate are intellectually challenging, but potential students shouldn’t let this deter them. Intensive courses in the three core languages as well as segmentation of the seven high-school years into two- or three-year stages make lateral entry easier for new students, even when they are already young adults. Source: European School Karlsruhe. Fans can visit a wide range of festivals in the state practically every week throughout the year. In the European world of music, the Festspielhaus Baden-Baden has joined the prestigious summer festival ranks of such places as Salzburg, Lucerne and Aix-en-Provence. Featuring 2,500 seats, the building, which hosts performances year-round, is one of Europe’s largest classical music performance halls. The approximately 120 performances given each year bring joy to the lives of an average of more than 220,000 music lovers from all parts of the world. Thanks to its more than 1,200 museums and museum-like facilities, Baden-Württemberg’s museum landscape is very diverse— ranging from large state-funded institutions, important city art collections, significant special-subject museums and regional rural open-air museums to a host of smaller museums run by volunteers. As a result, Baden-Württemberg has the highest concentration of museums in Germany. Around 15 million people visit museums in the state every year. Baden-Württemberg has a very large number of historical buildings and monuments. The Romans, the Hohenstaufens and the Alemanni as well as dukes, bishops and kings have all left their mark on the region. The state heritage agency, Staatliche Schlösser und Gärten Baden-Württemberg (SSG), maintains 60 12 Investment Guide Baden-Württemberg SKILLED WORKERS’ ALLIANCE—AN OUTSTANDING EXAMPLE OF BADEN-WÜRTTEMBERG’S CULTURE OF OPENNESS AND HOSPITALITY The shortage of skilled specialists in Germany concerns many companies. In light of demographic change, some industries now have difficulty meeting their needs for skilled specialists and trainees. To counteract this trend, the Skilled Workers‘ Alliance has begun to bring together all partners in BadenWürttemberg involved in meeting the demand for skilled specialists. They have agreed on a list of objectives with 10 areas for action: In addition, Welcome Centers provide information and support to immigrating skilled specialists and their families to help them with getting established. Offered in cooperation with existing providers of advising services and other relevant institutions, assistance includes, for example, apartment searches, employment for life partners and childcare. Welcome Centers also provide guidance in terms of the government agencies and organizations that immigrants need to approach. 1.Enhance vocational training 2.Expand professional-development opportunities 3.Increase the number of women in employment 4.Increase the number of older people in employment 5.Integrate people with immigrant backgrounds more effectively into the labor market 6.Reduce unemployment, particularly long-term unemployment 7.Boost the level of full-time employment 8.Increase the number of employees in engineering, a field with shortages 9.Target immigration 10.Establish regional Skilled Workers’ Alliances Welcome Centers cooperate locally with regional Skilled Workers’ Alliances. The regional alliances are structured in a similar manner as the Baden-Württemberg Skilled Workers’ Alliance. Stakeholders in the regional alliances join forces at the regional level to agree on objectives and measures to recruit and retain professionals. Most regional Skilled Workers’ Alliances have identified the area to take action as the issue of immigration by foreign skilled specialists. Welcome Centers have access to local employment agencies, regional employer and trade-union representatives, chambers of industry and commerce, chambers of crafts and trades, regional business-development agencies, municipalities, institutions of higher learning and other partner organizations through the coordination center of each regional Skilled Workers’ Alliance. The Skilled Workers’ Alliance is also implementing a joint program to recruit and retain skilled professionals. A key element of the Skilled Workers’ Alliance is the establishment of 11 Welcome Centers for international skilled specialists in Baden-Württemberg. The state is enhancing its culture of openness and hospitality. Welcome Centers act as central points of contact for international skilled specialists and small and midsized enterprises (SMEs). The centers help the state pursue its objective of recruiting and retaining additional skilled specialists from abroad. Welcome Centers assist SMEs and bw-i with recruiting international skilled specialists. Their task is to approach companies, provide them with information and assist with searching measures. state-owned palaces, monasteries, gardens, castles and ruins. Around 3.6 million people visit the rich variety of state palaces, monasteries and castles each year. Heidelberg Castle retains its position among Germany’s top travel destinations with more than 1 million visitors. Those interested in historical buildings and monuments can also view the remains of the Limes, a Roman frontier wall; Hohenzollern Castle; and Maulbronn Monastery. Other visitor attractions include Schwetzingen Palace and Palace Gardens, Ludwigsburg Palace, Maulbronn Monastery, Weikersheim Palace and Palace Garden, and Salem Monastery and Palace. Lively traditions include Swabian–Alemannic Fastnacht (carnival) when merrymakers in traditional costumes and historical wooden masks symbolically drive away winter. To fulfill their guidance function, Welcome Centers maintain a strong network of contacts at various organizations and government agencies. These include the immigration advising services provided by the member associations of the League of Independent Welfare Associations as well as the social integration officials in the municipalities. The aim is to leverage synergies within this network. Incidentally, all Welcome Centers communicate directly with each other. At regular meetings, information is shared on such topics as the recognition of vocational qualifications and provision of advising services concerning recognition as well as on residence- Sports and leisure-time links: www.sport-in-bw.de www.schulsport-in-bw.de/Aktuelles.html www.wilhelma.de www.blueba.de 1.6 SPORTS AND LEISURE TIME Baden-Württemberg attaches importance to sports at all levels: both as part of the school curriculum as well as at the levels of competitive and popular sports in cooperation with clubs and associations. Of course, athletic activities for the disabled are also part of the sports landscape in the state. After all, sports bring people together. Sport as a policy objective was incorporated in the state constitution in 2000. Investment Guide Baden-Württemberg permit, employment-law and social-law fundamentals and immigration advising services. An important building block in this culture of openness and hospitality is the right of immigrants to have their professional qualifications assessed for equivalence. It provides immigrants with a legal entitlement to have the professional qualifications they obtained abroad individually assessed for equivalence with German qualifications. The underlying objective is to more effectively exploit the potential of skilled specialists with an immigrant background who already live in Germany as well as the potential of people willing to immigrate from abroad. That includes the goal of intensifying efforts to recruit and retain more foreign graduates from Baden-Württemberg’s institutions of higher learning to strengthen the state’s resources in the area of skilled specialists. Many foreign students have been leaving Germany after they graduate. Partners in the Workers’ Alliance, coordinated by the Ministry of Finance and Economics, are attempting to counteract this trend by creating a culture of openness and hospitality. The Welcome Campaign at the state’s institutions of higher learning provides foreign students and graduates with targeted information about living and working in Baden-Württemberg. Welcome events titled “Your Future in Baden-Württemberg” are held at many colleges and universities. These events involve both the relevant institutions of higher learning and the relevant partners in the regional Skilled Workers’ Alliance. Participating students learn about options to live and work in Baden-Württemberg after graduating and how to find employment with a Baden-Württemberg company if they opt to return to their home country. To date more than 10,000 students from Germany and abroad have participated. The bw-jobs.de communication platform provides job-seekers from Germany and abroad with an overview of living and working in Baden-Württemberg. Visitors can also obtain targeted For many years now, Baden-Württemberg has enjoyed an exceptional reputation as a host of international sporting events. In particular, the state capital, Stuttgart, has demonstrated to a global audience that it is an commendable host of major international sporting events. This was demonstrated, for example, as the city served as a venue for World Cup soccer games in 1974 and 2006 as well as when it hosted the European and World Athletics Championships in 1986 and 1993 respectively and the World Artistic Gymnastics Championships in 1989 and 2007. But other cities like Karlsruhe, Mannheim and Sinsheim have hosted and will continue to host major sporting events. In two examples of this, Mannheim hosted the World Ice Hockey Championships in 2010, and Sinsheim served as a Women’s World Cup venue in 2011. 13 information about programs and support services related to recruiting skilled specialists provided by the state of Baden-Württemberg, the Federal Employment Agency, business and industry associations, and regional business-development agencies as well as the regional Skilled Workers’ Alliances. The core component of the website is a job-search engine with around 30,000 job openings in technical professions. to the Welcome Centers in Links Baden-Württemberg: Welcome Center Sozialwirtschaft Baden-Württemberg www.welcome-center-sozialwirtschaft-bw.de Welcome Center Bodensee-Oberschwaben www.welcomecenter-bo.de Welcome Center Freiburg-Oberrhein www.welcomecenter-freiburg-oberrhein.de Welcome Center Gewinnerregion Schwarzwald-BaarHeuberg www.welcome-sbh.de Welcome Center Heilbronn-Franken www.welcomecenter-hnf.com Welcome Center Neckar-Alb www.welcomecenter-neckaralb.de Welcome Center Nordschwarzwald www.welcome-to-nordschwarzwald.de Welcome Center Rhein-Neckar www.welcomecenter-rn.de Welcome Center Stuttgart/Welcome Service Region Stuttgart www.welcome.region-stuttgart.de Welcome Center TechnologyRegion Karlsruhe www.welcome.technologieregion-karlsruhe.de Welcome Center Ulm/Oberschwaben www.welcomecenter-ulm-oberschwaben.de At the level of club sports, teams and athletes from Baden-Württemberg continue to attract attention and provide spectators with exciting competitions. VfB Stuttgart and 1899 Hoffenheim currently play in Germany’s premier soccer league, the Bundesliga, and SC Freiburg, Karlsruher SC, 1. FC Heidenheim and SV Sandhausen compete in the second Bundesliga. The Mannheimer Adler ice hockey team is the reigning German champion. The same applies to VfB Friedrichshafen in volleyball. Four teams in the state compete in Germany’s premier handball league—the Rhein-Neckar-Löwen, Frisch Auf Göppingen, HBW Balingen-Weilstetten and TVB Stuttgart 1889. In 2013, 195 athletes from Baden-Württemberg won 115 bronze medals, 113 silver medals and 120 gold medals at the World and European Masters Athletics Championships. Baden-Württemberg is home to five elite sports schools: Tauberbischofsheim, Furtwangen, Stuttgart, Heidelberg and Freiburg. The state also 14 Investment Guide Baden-Württemberg International schools in Baden-Württemberg: Black Forest Academy, Kandern: www.bfacademy.com Deutsch-Französische Grundschule, Freiburg: www.dfgs.fr.bw.schule.de Deutsch-Französische Grundschule, Stuttgart/Sillenbuch: www.dfgs-sillenbuch.de Deutsch-Französisches Gymnasium, Freiburg: www.dfglfa.net/dfg Ecole Française Pierre et Marie Curie, Heidelberg: www.ecole.de European School, Karlsruhe: www.eskar.org H.I.S. Heidelberg International School, Heidelberg: www.hischool.de ISS International School of Stuttgart, Stuttgart, and ISS BaSICS (International School of Stuttgart, Böblingen and Sindelfingen International Community School), Sindelfingen: www.issev.de ISU – International School of Ulm/Neu-Ulm, Neu-Ulm: www.is-ulm.de Metropolitan International School, Heidelberg/Mannheim/ Viernheim: www.metroschool.de Schule Schloss Salem: www.salem-net.de SIS Swiss International School, Friedrichshafen/ Stuttgart-Fellbach: www.swissinternationalschool.de UWC – Robert Bosch College, Freiburg: www.uwcrobertboschcollege.de Monitoring Early Childhood Education Systems” with the best staff-to-child ratio in Germany. On average, each full-time child daycare professional cares for 3.1 all-day nursery children or 7.7 kindergartners. That means Baden-Württemberg has once again improved its ratio of childcare professionals to children. The many skilled specialists working in preschools ensure a high standard of quality in childcare. The state is also breaking new ground in terms of introductory and advanced training of educational professionals and making the job of preschool teacher even more attractive. This means this profession will appeal to even more people—including a large share of people who have a qualification to attend an institution of higher learning. Under the motto “Baden-Württemberg, the land of children,” the state’s political leaders are turning their attention to children and young people, their needs and their potential. Parents are to be able to decide freely and independently about the way they want to lead their family lives and can count on government support when necessary. Various options, including child-care centers and childcare providers as well as all-day schools and kindergartens, are designed to help parents raise, educate and care for their children. Links to education: www.kultusportal-bw.de 1.8 SCHOOL EDUCATION has a network of Olympic training-center partner schools and partner sports schools that provide valuable support to students developing their athletic ability. The range of leisure-time activities offered to people in the state extends well beyond sports. There are many amusement parks, water parks, game reserves and zoos throughout the state, like the Wilhelma in Stuttgart. Germany’s biggest amusement park, Europa-Park, is located in the town of Rust. Located just outside Stuttgart, the Sensapolis indoor recreational park is a great place to go. Outletcity Metzingen is a well-known shopping destination. And rap jumping in Leonberg gets the adrenaline flowing when you launch yourself off the edge of a roof. Stiftung Kinderland: www.stiftung-kinderland.de 1.7 WORK-LIFE BALANCE Baden-Württemberg provides targeted support to families with a range of government-funded benefits. The state is providing a growing amount of support so parents can create a better work-life balance. This effort includes the needs-based expansion of early-childhood care. In this area, Baden-Württemberg has significantly improved childcare provisions, earning special mention in the Bertelsmann Stiftung’s report “State by State: Types of schools and trends More than 1.1 million young people attend the generaleducational and vocational schools in Baden-Württemberg. A diversified and precisely coordinated range of courses is designed to promote the individual abilities of students. In its educational policies, the state government focuses on the individual interests and special talents of people. Like most German states, the school system begins with four-year elementary school (Grundschule). This is followed by secondary school. In the previous three-tier school system, elementary school was followed by secondary general school or vocational secondary general school (Hauptschule or Werkrealschule), intermediate school (Realschule) or college-preparatory secondary school (Gymnasium). The large majority of schools are public. Private schools exist alongside public schools. In 2012, the new collective secondary school (Gemeinschaftsschule) was launched. This represents the first step toward creating a two-tier school model, which the state wants to expand. Collective secondary schools frequently offer all types of diplomas under one roof. College-preparatory secondary schools will retain their autonomy. The defining principle of the collective secondary school is the mission to create a high-performance, socially just school that will educate students on the basis of their individual abilities and enable them to achieve their best individual educational potential. Investment Guide Baden-Württemberg Baden-Württemberg’s current school system has an excellent reputation both at home and abroad. The state offers a range of multifaceted and compatible options that enable students to prepare for college. Of the total number of secondary-school graduates who obtained a general-education diploma in 2013 while attending secondary general or vocational schools, 30 percent earned a diploma entitling them to attend an institution of higher learning, 12 percent were qualified to attend a university of applied sciences, nearly 42 percent earned an intermediate secondary-education diploma, and 16 percent earned a diploma from a secondary general school. Secondary-school students benefit from the high level of transparency within the school system in Baden-Württemberg. Students who attend secondary general schools, vocational intermediate schools or intermediate schools have the opportunity to earn the diplomas necessary to attend college. The state government is also increasing the number of allday schools as a way of expanding the amount of instruction provided. Almost 1,700 public and private all-day schools were providing education in the state during the 2013/14 academic year. All collective secondary schools are all-day schools. During the 2013/14 academic year, college-preparatory secondary schools accounted for the next-largest proportion of all-day schools at over 53 percent, followed by vocational intermediate schools and secondary general schools at nearly 51 percent. International schools and bilingual instruction Several international schools in the state provide continuous instruction in foreign languages. The range of English-language instruction is particularly large. At international schools such as the European School Karlsruhe (see text box on p. 14) the number of instructional languages offered as part of foreignlanguage teaching is particularly large. A German-French college-preparatory secondary school (Deutsch-Französisches Gymnasium) is located in Freiburg. The range of bilingual instruction in individual subjects is considerably bigger. Several elementary schools offer German-French, German-English and German-Italian courses. About 60 college-preparatory secondary schools have bilingual German-English departments. Several schools enable students to earn a “Baden-Württemberg international college-entrance diploma” in addition to the German diploma that entitles them to attend college. Several college-preparatory secondary schools have bilingual German-French departments, and the Königin-Katharina-Stift in Stuttgart has a bilingual German-Italian profile. Students who attend such bilingual departments earn a diploma that entitles them to attend college in the particular country. Programs for gifted students at college-preparatory secondary schools Baden-Württemberg offers programs for gifted students at 15 college-preparatory secondary schools. These programs 15 Schools for gifted students: State College-Preparatory Secondary School for Gifted Students, Schwäbisch Gmünd: www.lgh-gmuend.de Leonardo-da-Vinci-Gymnasium, Neckargemünd: www.ldvg.de College-preparatory secondary schools with programs for gifted students: Albert-Einstein-Gymnasium, Ulm: www.einstein-gym.ul.schule-bw.de/ Bismarck-Gymnasium, Karlsruhe: www.bismarck-gymnasium.de Friedrich-Schiller-Gymnasium, Marbach am Neckar: www.fsg-marbach.de Hans-Thoma-Gymnasium, Lörrach: www.hans-thoma-gymnasium.de Heinrich-Suso-Gymnasium, Constance: www.suso.schulen.konstanz.de Karls-Gymnasium, Stuttgart: www.karls-gymnasium.de Königin-Katharina-Stift, Stuttgart: www.königin-katharina-stift.de Kurfürst-Friedrich-Gymnasium, Heidelberg: www.kfg-heidelberg.de Leibniz-Gymnasium, Rottweil: https://lg.rw.schule-bw.de/home/ Lessing-Gymnasium, Mannheim: www.lessing-gymnasium.de Reuchlin-Gymnasium, Pforzheim: www.reuchlin-gymnasium.de Robert-Mayer-Gymnasium, Heilbronn: www.rmg-heilbronn.de Scheffel-Gymnasium, Lahr: www.scheffel-gymnasium.de Spohn-Gymnasium, Ravensburg: www.spohn.rv.bw.schule.de Uhland-Gymnasium, Tübingen: www.ug.tue.bw.schule.de are designed to give these gifted students an opportunity to receive support near their homes at an early period in their education and to receive optimum assistance in their academic careers. The college-preparatory secondary schools were selected on the basis of their educational quality and their good access to public transportation. The schools are located in all areas of the state, enabling nearly every talented child to reach a nearby school that offers the program for gifted students. Each of the programs for gifted students works through the curriculum at a faster pace in order to create additional time for further instruction without increasing the number of hours spent in class each week. The State College-Preparatory Secondary School for Gifted Students with Boarding School and Center of Excellence in Schwäbisch Gmünd also accepts external students. The private Leonardo da Vinci College-Preparatory Secondary School is located in Neckargemünd near Heidelberg. 16 Investment Guide Baden-Württemberg The school system in Baden-Württemberg The four-year elementary school (Grundschule) is the school system’s primary level. All children attend this school. Its mandate is to develop the various talents of children within the context of a common educational program. Every child is to be fostered according to his or her learning abilities. All elementary school pupils in Baden-Württemberg begin learning a foreign language in the first grade. In most schools, this language is English. But it is French in schools located along the Rhine. Collective secondary schools (Gemeinschaftsschule) have existed in Baden-Württemberg since 2012. In essence, the collective secondary school consists of grades five through 10. Above a certain number of students at the college-preparatory level from grade 10 onward, collective secondary schools can also offer grades 11 through 13. Their courses meet all valid educational standards and lead to all three secondary-school diplomas. The secondary general school (Hauptschule) consists of five school years and ends with the award of a diploma. Students then have an opportunity to voluntarily attend a 10th grade at the vocational intermediate school (Werkrealschule), in which they can reach a level equivalent to an intermediate school diploma (Realschulabschluss). The vocational intermediate school is designed to issue a mid-level diploma after six years and provide students with the opportunity to attend special courses to systematically bolster their strengths. The intermediate school (Realschule) is designed to encourage and educate its students through practical courses. This includes the teaching of personal and interpersonal skills as well as methodology and subject-matter content. After six years of study, students are awarded a general certificate of secondary education. This diploma enables them to enter approved vocational training programs as well as other courses of education that lead to a diploma that entitles them to attend college. In an eight-year program—nine years at some model schools— college-preparatory secondary schools (Gymnasien) provide students with a broad and in-depth general education in which they earn a diploma that entitles them to attend college. This diploma forms the basis for vocational training in a company without a college degree and for a course of study leading to a college degree. All students at a college-preparatory secondary school learn at least two foreign languages. With the selection of the language profile in the eighth grade, students receive instruction in a third foreign language. They have the option of taking a fourth language in the 10th grade. In addition to the traditional college-preparatory secondary school, Baden-Württemberg is expanding its vocational college-preparatory secondary schools (berufliche Gymnasien) across the state. Nearly every third student earns his or her secondary school diploma at such a school. As a result, increasing numbers of young people from all sorts of social backgrounds are earning diplomas that will entitle them to attend college. The three-year vocational college-preparatory secondary schools are full-time schools that offer college-preparatory courses and vocational instruction in particular areas: @ Agriculture @ Biotechnology @ Nutritional science @ Social sciences and health care (in various profiles) @ Technology (in various profiles) @ Economics (in various profiles) At a few locations, the vocational college-preparatory secondary school offers a six-year program in economics, beginning in the eighth grade. Investment Guide Baden-Württemberg 17 2 INFRASTRUCTURE IN BADENWÜRTTEMBERG—A SOLID FOUNDATION @ A modern society and a prospering, internationally competitive economy require a modern infrastructure in terms of mobility and transportation, energy and communications, and education and science. Both the people who live in Baden-Württemberg now and the skilled specialists and executives who relocate to the state benefit from this infrastructure. In Baden-Württemberg, companies and investors are certain to encounter exactly the conditions needed to produce first-class products and services and to compete in global markets. 2.1 CENTRAL INFRASTRUCTURE 2.1.1TRADE-FAIR AND EXHIBITION CENTERS As the state’s marketplace, the trade-fair and exhibition centers in Baden-Württemberg serve as both a gateway to the world and to the region. The state features a concentrated network of attractive trade-fair and exhibition centers of various sizes and specialties. High-caliber trade fairs and exhibitions take place at these centers throughout the year. The calendar of events includes a broad range of industries and topics, extending from international high-tech trade fairs to regional consumer exhibitions. The state’s nine trade-fair companies are jointly represented on the www.bw-fairs.de online portal. This portal provides information in German, English and French about the locations as well as a trade-fair calendar detailing all scheduled events. The state’s largest trade—fair organizer is the Stuttgart Trade Fair Center, or Messe Stuttgart, which manages 72 trade fairs featuring around 21,400 exhibitors—including around one-fifth from abroad, more than 1.3 million visitors and a total return of around 137 million Euro. The contoured roofs of the exhibi- The Baroque palace in Mannheim where much of the University of Mannheim is located. Joint home page of the exhibition centers: www.bw-fairs.de Stuttgart Trade Fair Center: www.messe-stuttgart.de Freiburg Trade Fair Center: www.messe-freiburg.de Friedrichshafen Trade Fair Center: www.messe-friedrichshafen.de Karlsruhe Trade Fair Center: www.messe-karlsruhe.de Mannheim Trade Fair Center: www.maimarkt.de Offenburg Trade Fair Center: www.messe-offenburg.de Sindelfingen Trade Fair Center: www.messe-sindelfingen.de Sinsheim Trade Fair Center: www.schall-messen.de Ulm Trade Fair Center: www.ulm-messe.de Villingen-Schwenningen Trade Fair Center: www.messe-vs.de Source: Stefanie Eichler, University of Mannheim. 18 Investment Guide Baden-Württemberg Important transportation links in Baden-Württemberg Source: Atlas on Logistics in Baden-Württemberg, Baden-Württemberg Ministry of Finance and Economics. Investment Guide Baden-Württemberg tion halls and the parking facility spanning the A8 autobahn are trademarks of the trade-fair grounds and make it easy to identify from a considerable distance. The Messe Stuttgart building complex has already won many awards for its modern architecture. The Stuttgart trade-fair site has 105,200 square meters of exhibition space and seven halls, each incorporating 10,500 square meters of space. Added to this are a multifunctional trade-fair and event hall with 26,800 square meters of space and a hall in the ICS International Congress Center Stuttgart with 4,900 square meters of space. The ICS has more than two dozen large rooms with seating capacity ranging from 20 to 4,900 and a total seating capacity of 10,000. To expand capacity, Messe Stuttgart is planning to build the new Hall 10 by 2017. The trade-fair grounds are located right next to Stuttgart Airport on the A8 freeway and near the A81. The location is also easy to reach from the Stuttgart Central Train Station using the rapid-transit train system (S-Bahn). Messe Stuttgart is the organizer of several leading trade fairs. These include CMT, Europe’s largest public trade fair for tourism and leisure; R+T, the world’s leading trade fair for roller shutters, doors, gates and sun protection; Intergastra for the hotel and restaurant sector; the Intervitis Interfructa wine and fruit-juice technology trade fair; the AMB machine-tool-building event; and Interbad for swimming pools, saunas and spas. Other important industry events include trade fairs like Global Connect, a forum for export and internationalization; VISION, the world’s leading trade fair for image processing; and Invest, the leading exhibition for finance and investment. The crafts and trades are also represented with shows like Südback and Süffa. Messe Stuttgart also has operations in more than 54 countries around the world. It has also established subsidiaries in China, Turkey and the United States with the intention of expanding its international business. The Friedrichshafen Trade Fair Center, or Messe Friedrichshafen, is located right in the heart of the economically vibrant four-country region of Lake Constance. Distinguishing features of the trade-fair grounds include the elegant architecture and well-planned infrastructure that benefits from the immediate proximity to the regional airport. The site comprises 85,000 square meters of state-of-the-art exhibition space distributed over 12 exhibition halls, two outdoor areas, two multifunctional entrance hallways and numerous conference and meeting rooms. Friedrichshafen is one of Europe’s leading exhibition locations for sports and leisure-time trade fairs. Its most important events include business exhibitions like EUROBIKE, the world’s leading bicycle-industry trade fair, and Outdoor, the world’s No. 1 trade fair for outdoor athletic activities. AERO is Europe’s leading exhibition for the general aviation industry. Other major European trade-fair events include the water sports trade fair INTERBOOT and TUNING WORLD BODENSEE. Fakuma—the international trade fair for plastics processing—is this global industry’s key rendezvous point. 19 The Karlsruhe Trade Fair Center, or Messe Karlsruhe, is Baden-Württemberg’s third internationally focused exhibition location in addition to Stuttgart and Friedrichshafen. The city lies very close to the French border and is near Switzerland. Every year, events organized by Karlsruher Messe- und Kongress-GmbH attract nearly 8,000 exhibitors and 770,000 visitors to this commercial, academic and research region. The trade-fair site comprises around 52,000 square meters of exhibition space and 62,000 square meters of outdoor space. The adjoining convention center has four event buildings and halls with 28 rooms and a total of approximately 13,000 seats. More than 140 conventions, both as guest and proprietary events, take place every year at the Karlsruhe Trade Fair Center. IT-Trans, the international convention and trade fair on IT solutions for public transportation, is a rendezvous point for this industry’s international market leaders and key players. LEARNTEC, an international trade fair and convention for IT-aided learning, provides information about the latest trends in IT-assisted learning. WTT-Expo is Europe’s leading trade fair devoted to industrial heating and cooling technology for process-related applications. Karlsruhe is also the home of Eunique, an international trade fair for applied art and design, and art KARLSRUHE, the trade fair for classical modern and contemporary art, both of which have a strong international appeal. Aside from the trade-fair centers mentioned above, other exhibition centers in Baden-Württemberg also stage premiumquality specialist trade events. The exhibition facilities in Freiburg, Mannheim, Offenburg, Sinsheim, Ulm and Villingen-Schwenningen cover between 5,500 square meters (Villingen-Schwenningen) and 21,500 square meters (Freiburg). The international flagship event Interbrush organized by the Freiburg Trade Fair Center, or Messe Freiburg, is an international trade fair for the brush and paintbrush industry that features more than 200 exhibitors and over 7,000 visitors from 90 countries. Around two-thirds of exhibitors and visitors at Interbrush come from abroad. Further examples of successful trade fairs include the Mannheim Maimarket, Germany’s largest consumer exhibition with about 350,000 visitors; Eurocheval, the European equestrian trade fair in Offenburg; Druck+Form, the printing trade fair for the graphics industry in Sinsheim; Leben – Wohnen – Freizeit, the springtime trade fair in Ulm; and Südwest-Messe, the broad-based trade fair for the general public in Villingen-Schwenningen. Transportation infrastructure links: www.mvi.baden-wuerttemberg.de www.logistik-bw.de www.bahnprojekt-stuttgart-ulm.de www.flughafen-stuttgart.de www.3-loewen-takt.de www.binnenhafen-bw.de 20 Investment Guide Baden-Württemberg PUBLIC TRANSPORTATION Baden-Württemberg promotes sustainable mobility and is therefore strengthening public transportation. Currently, around 10 percent of all journeys in the state are made using public transportation—a percentage that is to be doubled within 10 years because operators of streetcars, rapid-transit rail systems, buses and flexible transportation options are pooling their efforts to improve their range of regional rail transportation services in populated areas. New concepts that link cities more closely to outlying areas have helped increase the appeal of the regional rail transportation network. As a result, rapid-transit rail networks, in particular, have been significantly expanded in certain areas. A regional-train car in Stuttgart. Source: Deutsche Bahn AG. state. In all, Baden-Württemberg has about 1,020 kilometers of autobahns, 4,370 kilometers of federal highways, 9,500 kilometers of state roads and 11,700 kilometers of county roads. Given its central location in Europe and status as a transit region, Baden-Württemberg plays an important role in handling traffic volumes, especially with regard to the upkeep and maintenance of federal highways. Rail Especially on long-distance routes, rail transport is a competitive alternative to road transport for quickly moving people and goods over long distances. In Baden-Württemberg, Deutsche Bahn AG’s rail network covers around 3,800 kilometers. Added to this are about 860 kilometers of privately owned rails, rail operations at inland harbors and intermodal transport facilities as well as about 340 private sidings for industrial and commercial purposes. The main axes of the rail network for goods transport cover a total of 1,206 kilometers. The Rhine Valley route between Mannheim and Basel serves as an important corridor for international rail transport and is being expanded to four tracks for this reason. The creation and expansion of the Rhine Valley railroad is actually one of the federal government’s planned demand projects. Thanks to the Rhine Valley route, Baden-Württemberg has excellent direct connections to the seaports of Antwerp, Rotterdam and Amsterdam (ARA ports) as well as to the Mediterranean region. The Mannheim–Basel route will play an increasingly important role as an access route for NEAT (New European Alpine Transit) through Switzerland. NEAT is Switzerland’s major rail project to improve the north-south transport of goods through the Alps. 2.1.2TRANSPORTATION AND TRANSPORTATION INFRASTRUCTURE Baden-Württemberg is located in the heart of Europe. International mainline routes like Paris–Budapest, Amsterdam– Milan, Hamburg–Marseilles and Warsaw–Paris intersect in Baden-Württemberg. People living in the state as well as the manufacturing- and export-focused economy benefit from this efficient transportation infrastructure and from sustainable mobility. Baden-Württemberg is very convenient to reach by road, rail, water and air. Within the state, nearly 3 billion tonnes of goods are transported overland, 375 million tonnes by rail and 222 million tonnes on inland waterways. Roads Baden-Württemberg has an efficient network of roads and highways covering more than 26,500 kilometers. This ensures exceptional links to the economic centers of Europe as well as fast, uncomplicated connections to cities and regions within the In long-distance transportation, the state has two transEuropean routes (Paris–Strasbourg–Stuttgart–Vienna– Bratislava and Antwerp/Rotterdam–Duisburg–Basel–Lyon/ Genoa) and numerous other routes within the trans-European rail system. As a result, it enjoys fast, frequent connections to many important business centers inside and outside Germany. The Stuttgart-Ulm rail project is one of the state’s largest infrastructure projects. It consists of two parts: @ The restructuring of the Stuttgart rail hub in a project named Stuttgart 21, comprises constructing the new central station and linking the airport and Messe Stuttgart to regional and long-distance transportation routes @ Constructing the Wendlingen–Ulm high-speed rail route, which will be linked to the new rail hub On this two-track line, which largely runs along the A8 autobahn, trains can travel at speeds of up to 250 kilometers an hour. Investment Guide Baden-Württemberg 21 Around 9.7 million passengers use the airport every year. Nonstop flights take off from Stuttgart to not only Europe’s leading cities, but also, for example, to the United States. Additional international connections departing from Frankfurt am Main, Munich, Zurich, Basel and Strasbourg airports can be reached by plane in less than an hour. Intermodal transportation Check-in at Terminal 1 of the Stuttgart Airport. Source: Stuttgart Airport. Inland waterways For commercial shipping, the state features a well-developed interconnected network of inland waterways covering around 550 kilometers on the Rhine, Neckar and Main. The Rhine alone accounts for around 80 percent of inland shipping traffic in Germany. The Baden-Württemberg ports of Mannheim, Karlsruhe, Kehl, Breisach and Weil am Rhein are located on Germany’s longest federal waterway. Given the environmental compatibility of this form of transport and the future growth of freight traffic, inland shipping has substantial capacity reserves and can relieve some of the traffic pressure in metropolitan areas. Shipping containers as part of intermodal transport offers annual growth rates of up to 10 percent. Baden-Württemberg has 10 harbors and numerous loading and unloading berths. Compared with other states in Germany, Baden-Württemberg’s 10 harbors handle the secondlargest amount of commercial inland shipping cargo. They also represent three of the 10 largest inland harbors in Germany. Serving as the logistics core of the Rhine-Neckar international metropolitan region, the neighboring harbors in Mannheim and Ludwigshafen (in Rhineland-Palatinate) form the secondlargest inland harbor in Europe. By linking the rail, inlandwaterway and overland modes of transport, Baden-Württemberg’s harbors serve as logistics hubs that provide nationally important trimodal services. Aviation Scheduled airline services are provided to and from Baden-Württemberg’s three commercial airports: Stuttgart, Karlsruhe/ Baden-Baden and Friedrichshafen. The airports link the state to the German and international airline network. For years, the number of passengers using the three airports has totaled around 11.5 million. The state is also home to 18 airfields. Stuttgart Airport is the state’s international transportation hub. Intermodal transportation consisting of road, rail and inland waterways has been growing substantially in Baden-Württemberg, especially as far as international transport and transportation is concerned. According to a report conducted on behalf of the state’s transport ministry, freight volumes with a point of departure or destination in Baden-Württemberg are set to increase to 13 million tonnes by 2025. That means an increase of around 67 percent compared with the base year of 2010. For this reason, the business location of Baden-Württemberg depends on good links to trans-European axes. The state is already being heavily used as a transit territory. To that extent, it is helpful that Baden-Württemberg’s metropolitan regions are well equipped with intermodal transport facilities. Mannheim, Stuttgart, Kornwestheim and Ulm play key roles in this respect. Karlsruhe, Weil am Rhein, Singen and Heilbronn also have the infrastructure to handle intermodal transport. Trains that are part of the “rolling road” system to northern Italy depart from and end in Freiburg. The 10 inland ports and five additional transshipment terminals for intermodal transport are the key logistics hubs in Baden-Württemberg. Seven inland ports offer trimodal transport services. Portals for administrative services: www.im.baden-wuerttemberg.de www.service-bw.de 2.1.3 MODERN ADMINISTRATIVE PRACTICES People living in Baden-Württemberg can rely on the efficient, customer-focused public administrative services offered in the state. This has a three-tier structure with the ministries at the top; the four administrative regions of Stuttgart, Karlsruhe, Tübingen and Freiburg as intermediate authorities; and counties and urban districts as well as municipalities at the local level. The state is divided into a total of 35 counties, nine urban districts and 1,101 municipalities. To even more effectively address the concerns and needs of residents and companies, the state’s entire administrative apparatus has in the last few years enhanced transparency in the services it offers as well as in the speed it delivers them. This is intended to relieve companies of bureaucratic burdens over the long term. Many administrative procedures and processes can now be conducted electronically as part of the state’s Electronic Government (e-government) program. Here, information on practically all administrative issues is available online. Baden-Württemberg residents and 22 Investment Guide Baden-Württemberg companies can also communicate electronically with all government agencies, in most cases eliminating the need to personally visit government offices. The central virtual access point to government agencies at the state, county and municipality levels, including their services, is the Internet portal www.service-bw.de. This is where all available e-government services in Baden-Württemberg can be found. In particular, this includes information about administrative procedures, online forms, electronic requests and notifications. In accordance with the EU Services Directive, a group of contact persons acting as points of single contact address questions and concerns put to government agencies and serve as guides to administrative procedures. In Baden-Württemberg, the chambers of industry and commerce, the chambers of crafts and trades, counties and districts provide points of single contact for both companies and self-employed professionals. These contacts handle all procedures and formalities necessary for these companies and individuals to initiate and carry out their activities in accordance with the EU Services Directive. The services provided by Baden-Württemberg’s government agencies don’t cease at the state’s borders: The EU Services Directive has created the legal framework for freedom of establishment and freedom to provide cross-border services to other member states. Administrative procedures are also being modernized and barriers to the establishment of service companies are being eliminated. The intention of the EU in this regard it to enable small and midsized companies, in particular, to use the internal market without restriction. For example, companies and self-employed individuals can, for example, more easily submit declarations, registrations and applications to obtain authorization from responsible agencies as well as entries into registers, professional listings and databases. Links concerning broadband: Baden-Württemberg Ministry for Rural Affairs and Consumer Protection: http://mlr.baden-wuerttemberg.de Clearingstelle Baden-Württemberg: www.clearingstelle-bw.de 2.1.4BROADBAND SERVICE Broadband connections for fast Internet service are a must for cities, towns and municipalities as well as for companies. According to TÜV Rhineland, 99 percent of households in Baden-Württemberg receive basic services of at least two megabits per second, and 69 percent of households are able to use high-speed networks with 50 megabits per second or more. Nearly all urban areas are have fast Internet service. There are fewer and fewer rural areas lacking service. More than threequarters of all counties are participating in the state’s broadband initiative or are working on planning contracts. This will enable the state to establish the most comprehensive coverage of fast Internet services possible over the next few years. The state has tripled funding for broadband expansion, increasing the amount from 11.7 million to 31.7 million Euro a year. One example of a regional initiative to expand broadband connections is the founding of the High-Speed-Netz Rhein-Neckar Association. Its establishment in 2014 created Germany’s largest municipal fiber-optic cable-network expansion association by population, in which all 54 towns, cities and municipalities in Rhine-Neckar county in northwest Baden-Württemberg are involved. County-wide networks facilitate significant high-speed and maximum-speed Internet improvements. Job-market links for Baden-Württemberg: www.bw-jobs.de www.arbeitsagentur.de 2.1.5 LABOR POOL AND JOB MARKET The job market in Baden-Württemberg offers good career prospects for skilled specialists from Germany and abroad. The state already boasts strong demand for highly qualified skilled specialists in the technical and engineering professions The unemployment rate in Baden-Württemberg is correspondingly low: 4.0 percent on average in 2014; 3.8 percent in September 2015. Aside from Bavaria, this is the lowest rate in Germany. Youth unemployment in Germany is the lowest here as well: 3.1 percent in September 2015 is the lowest rate in all of Germany. The people living in Baden-Württemberg boast a high average level of education. The high level of employees’ qualifications is an important business-location advantage in the race to attract national and international investors. Nearly 30 percent of all people 15 and older have a diploma that will entitle them to attend college (Abitur). Today, most current and recent secondary-school graduates have earned this qualification. Only around 5 percent of young people in Baden-Württemberg leave school without earning a diploma, making Baden-Württemberg the state with the lowest school drop-out rate in Germany. Employment opportunities are particularly good for people in the technical and engineering professions as well as in the healthcare and nursing sectors. According to the “Fachkräftemonitor” on skilled specialists released by the Baden-Württemberg Chamber of Industry and Commerce and an analysis published by the Federal Employment Agency on the shortage of skilled specialists, the following sectors have a demand for qualified skilled professionals: @ Mechatronics and automation engineering @ Mechanical and industrial engineering @ Automotive, aerospace and shipbuilding engineering @ Electrical and energy engineering @ Research, development and design engineering as well as production-management professions @ Computer science and IT applications consulting @ Software development and programming @ Mathematics, biology, chemistry and physics professions @ Geology, geography and environment-protection professions Investment Guide Baden-Württemberg 23 ENERGY REVOLUTION: EXPLOITING OPPORTUNITIES, MANAGING RISKS By unleashing its energy revolution, Germany has initiated a major change in its system of generating electricity, moving away from nuclear power and coal and shifting to renewable sources of energy. Baden-Württemberg alone is pursuing a tangible strategy of fundamentally changing climate protection and the energy supply in the state by the year 2050. With this deadline in mind, the energy revolution can be expressed in the concise formula of 50-80-90: @ With 50 percent less energy consumption @ and 80 percent renewable energies @ a 90 percent reduction in CO2 emissions is possible. Fifty percent less energy consumption (compared to 2010): In terms of saving energy, the main objective is not to consume less energy per se. The main focus is on more efficient use of electricity and heat. Eighty percent renewable energies: In 2050, the state will generate 80 percent of its energy needs from renewable sources, with wind and solar energy the main resources. Solar collectors, environmental heat and geothermal energy will play a key role in the supply of heating. Ninety percent lower greenhouse gas emissions (compared with 1990): By 2050, the state wants to have reduced greenhouse gas emissions related to electricity generation by 90 percent compared with 1990. A milestone reduction of 25 percent is to be achieved as early as 2020. An industrialized state like Baden-Württemberg does, of course, depend on reliable supplies of energy. Security of supply is guaranteed at all times. At the same time, electricity and heating have to remain affordable. That applies to private households as much as it does to companies and the public sector. For that reason, the state is pursuing the goal of minimizing the risk of increasing energy costs. Although the current energy revolution requires substantial initial investments, in the midterm and long term the switch to renewable energies will deliver greater independence from the fossil fuel market and falling energy prices. Creating smart grids The objectives of the energy revolution can only be achieved by fundamentally and comprehensively changing the energy supply system. In the future, electricity generation will be more decentralized than it is today. At the same time, the relevance of fluctuating, weather-dependent in-feeds of electricity from renewable sources will increase. The system transformation that the energy revolution involves requires rapid, comprehensive expansion of the German power-transmission grid. At the same time, decentralized development of renewable energies requires upgrading existing distribution grids to smart power grids. These smart grids have to link electricity generators, grid operators, storage facilities and customers into a network using state-of-the-art ICT. They can adjust the electricity generated by decentralized facilities to meet grid and system stability requirements and thus help match electricity generation to electricity consumption. In addition, they can help create more flexibility in the demand for electricity and, as a result, ease the burden on the load-management system, which is geared toward electricity generation. Promoting energy efficiency Baden-Württemberg also helps companies conserve energy. In one reflection of this, L-Bank’s Resource Efficiency Financing program provides financial support to SMEs in the form of low-interest development loans to enable them to take action to increase energy efficiency and environmental protection in Baden-Württemberg. Depending on their investment priorities, companies have a choice among three program components: @ Program component A—Energy-Efficient Production: funds action that leads to substantial and easily quantifiable energy savings in operational processes @ Program component B—Material Efficiency and Environmental Technology: funds action that focuses on careful handling of operational resources or a positive impact on the common environmental resources of air, water and soil @ Program component C—Energy-Efficient Operational Buildings: funds the construction of energy-efficient operational buildings and energy-saving upgrades in existing buildings as well as energy-saving measures related to building technology The Berghülen onshore wind farm. Source: EnBW/Weltenangler. 24 Investment Guide Baden-Württemberg 2.2 SCIENCE AND EDUCATION 2.2.1RESEARCH AND DEVELOPMENT (R&D) Leading the innovation rankings Baden-Württemberg is not only No. 1 in Germany as a hotbed of innovation, it ranks at the top in Europe as well. Baden-Württemberg’s research landscape gives the state a key business-location advantage compared with other regions in Germany and abroad. It is characterized by universities that focus primarily on basic research and by a well-developed infrastructure of nonuniversity, business-relevant research instituts. In terms of business-relevant research, the state of BadenWürttemberg invested a total of 102.3 million Euro in 2015, which is almost double the 2010 figure. Of this total, 70.8 million Euro was channeled directly into the business-relevant research institutes—for example, the Fraunhofer Institutes, the German Aerospace Center and the Innovationsallianz Baden-Württemberg. The state’s research and development expenditure ratio totals 4.8 percent. This means the state has already exceeded the target of 3 percent, a goal the EU has specified as the European average to be achieved by 2020. The 2014 Innovation Index, an assessment of the innovation skills of 87 regions in the 28 EU member countries compiled by the Baden-Württemberg Statistical Office, continues to rate the southwestern German state as the region in the EU with the most power to innovate. Other top-ranked regions include Bavaria, the French capital region Île de France, Berlin, Denmark, Finland, Hesse, Sweden and Hamburg. No other European region invests as high a share of its economic output in research and development as Baden-Württemberg. Nowhere is the share of people employed in researchintensive industry sectors higher and nowhere are more patents registered per capita than in Baden-Württemberg. Per million inhabitants, inventors in the state register five times as many patents at the European Patents Office than the average of all 28 EU member states. Baden-Württemberg benefits from that fact that researchfocused corporations like Bosch, Daimler, ZF Friedrichshafen, Porsche, SAP, Voith, Heidelberger Druckmaschinen, IBM and Hewlett-Packard have their headquarters or subsidiaries in the state. These corporations invest immense R&D resources here and are among the largest patent applicants in Germany and Europe. These innovators are bolstered by a concentrated network of midsized businesses, excellent universities and nonuniversity research organizations. With about 70 public and private universities, Baden-Württemberg has the most multifaceted array of institutions of higher learning in Germany. Three of Germany’s 11 Universities of Excellence are located here. OFFENBURG OUTPATIENT HEMATOLOGY/ ONCOLOGY THERAPY CENTER, OFFENBURG: PIONEERING WORK FOR THE BENEFIT OF PATIENTS On average, people are living longer and even patients with serious illnesses can expect increased life expectancies as medical advances are made. Nevertheless, there is plenty of room for improvement in the therapy and care of cancer patients. Ten years ago that prompted former hospital physicians Dr. Marianne Müller and Dr. Bernhard Linz to set up a registered oncology practice in Ortenau county. “At the beginning, we were in direct competition with the Ortenau Clinic because providing cancer therapy for patients was at the time a monopoly enjoyed by hospitals,” Müller recalls. So the decision of the South Baden Association of Statutory Health Insurance Physicians to issue a special-need approval for this ambitious project came at a good point. Assistance was provided by L-Bank in the form of low-interest investment loans. The initial rivalry between the medical practice and the clinic has long since transformed into a close partnership. In 2006, Dr. Andreas Jakob, formerly a senior physician at the Ortenau Clinic and now chief physician and head of the Ortenau Oncology Center, joined the practice as a partner. And since moving to a new medical center, the outpatient therapy center and the clinic are now also located nearer one another and cooperate on such activities as joint tumor conferences. Dr. Henning Pelz, who has also been a partner since 2012, explains: “We can offer our often seriously ill patients in Baden-Württemberg’s largest county the full spectrum of outpatient care, ranging from diagnosis to chemotherapy, in the form of tablets and infusions. Each one of our approximately 12,000 patients has a dedicated contact person.” The minimal staff turnover rate demonstrates that a committed team has been assembled in Offenburg and now at a second location in Achern. “Since we started up, our team has tripled in size and now numbers 24 employees,” Müller explains. “We are growing and are experiencing limited turnover.” Working together as a team and regular coaching are very important for the work at the center because every day employees are confronted with seriously and gravely ill patients. The high-quality and multidisciplinary range of study programs meets practically all desires and requirements related to a university education. According to the Innovation Index, the share of people employed in research-intensive industry sectors is higher in BadenWürttemberg than in any other region. In 2012, around 17 percent of the state’s working population held jobs in industrial high-technology sectors like mechanical engineering and Investment Guide Baden-Württemberg vehicle and engine manufacturing or in the production of computers and electronic and optical devices. Internet links (a selection): Helmholtz Association of German Research Centers: www.helmholtz.de Wissenschaftsgemeinschaft Gottfried Wilhelm Leibniz e.V.: www.leibniz-gemeinschaft.de Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V.: www.mpg.de Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e.V.: www.fraunhofer.de Steinbeis-Stiftung für Wirtschaftsförderung: www.steinbeis.de Innovationsallianz Baden-Württemberg: www.innbw.de Nonuniversity research Both institutions of higher learning and more than 100 nonuniversity research organizations call Baden-Württemberg home—no other region in Europe has more such institutions. All together, about one-quarter of all research capacity in all major German research institutions is concentrated in the state. Major international and German research centers like the European Molecular Biology Laboratory (EMBL) and the German Cancer Research Center (DKFZ) in Heidelberg are located here as are numerous institutes run by well-known research organizations. These include 12 Max Planck Society institutes, 17 Fraunhofer Society-Gesellschaft institutes and seven Leibniz Association institutes. The Helmholtz Association operates several research centers in Baden-Württemberg. Especially worth noting are the Karlsruhe Institute of Technology (KIT, see text box on p. 33) and the above-mentioned DKFZ, which is the largest biomedical research institute in Germany. Another major research organization is the German Aerospace Center (DLR), which has two locations with a total of seven institutes located in Baden-Württemberg. These organizations are complemented by 12 business-relevant research institutes run by the Innovationsallianz Baden-Württemberg and other nonuniversity research institutes. Two German government ministry research facilities are located in Karlsruhe: the Max Rubner Institute—Federal Research Institute for Nutrition and Food and the Federal Waterways Engineering and Research Institute. With around 600 transfer centers in Baden-Württemberg alone, the Steinbeis Foundation champions technology transfer from research institutes to companies. The range of advisory services, training and development provided by this network especially targets small and midsized enterprises that would fall behind in the innovation race without the assistance. Strategic research priorities and technology transfer Innovations that draw from scientific research work result from researchers communicating and cooperating with each 25 AMERIA GMBH, HEIDELBERG: DIGITAL ADVOCATES INVIGORATE BRICKS-ANDMORTAR RETAILERS In 2001, the signs weren’t exactly encouraging for establishing a software company. The New Economy was in the process of folding and taking countless start-ups and business ideas with it. But for a group of Heidelberg students headed up by Albrecht Metter, the combination of circumstances turned out to be a springboard to self-employment. “While at college, we carried out software projects focused on corporate marketing,” Matter, who holds a degree in economics, recounts. The young entrepreneurs had learned from the mistakes of the New Economy. “We didn’t want to develop standard products of our own, rather only take on contract work,” explains Metter, who has been CEO of Heidelberg-based ameria since its founding. In those early years, the contracts the company had taken on included projects that had been started by other businesses prior to going bankrupt. “We completed those projects,” Metter relates. But after acquiring its first major clients and technological innovations began to emerge, ameria increasingly focused on mobile applications. “This segment is still growing substantially in contrast to the weakening e-commerce sector,” the CEO states. For that reason, the company provides solutions for the areas of POS consumer engagement as well as mobile and web development. The goal of these solutions is to improve the way retailers engage with consumers through a variety of channels and to successfully attract consumers to interact with retailers. In Metter’s view, there’s a great deal of untapped growth potential in the bricks-and-mortar retail segment. ameria, which now employs around 30 full-time workers and partners with a pool of freelance programmers, launched a new product on the market in 2014: the Virtual Promoter, which enables shop windows to feature interactive, virtualreality designs. This product makes it possible to project a hologram-like figure of a life-size promoter, usually female, onto a shop window along with other digital content. “The virtual figure speaks to passers-by like a promoter and can interact with them by means of gesture control,” Metter says in explaining the product’s basic functions, which sufficiently impressed the jurors of the Innovation Award of the state of Baden-Württemberg and the CyberOne Award that each recognized ameria with their respective awards. The digital promoters are particularly popular among Asian and American customers because of the product’s gamelike elements and cross-channel options. other. For that reason, Baden-Württemberg fosters a networking culture that involves partners from universities, nonuniversity research organizations and companies. In many cases, this enables ideas and technologies derived from various fields of research to be transferred to society at large as well as to the 26 Investment Guide Baden-Württemberg IOLITEC IONIC LIQUIDS TECHNOLOGIES GMBH, HEILBRONN: A NEW PERSPECTIVE ON CHEMISTRY Dr. Thomas Schubert has been a firm believer in ionic liquids and their capabilities for a long time. “They are really well suited for transporting and storing energy,” he explains. “They also don’t burn if they overheat, which is an important safety aspect.” The as yet untapped potential of ionic liquids led Schubert and a cofounder to relocate to the Freiburg biotech region in 2003 and launch Ionic Liquids Technologies GmbH, IoLiTec for short. “We had the crazy idea of realizing our business idea solely with the aid of a savings bank loan,” the chemist with a graduate degree says in looking back on the company’s early days. “We did indeed find an excellent biotechnology start-up infrastructure in Freiburg.” The Freiburg business incubator was just one step in the process for IoLiTec: Given an increasing capital requirement, Schubert wanted to attract venture-capital funding. So the offer made by Zukunftsfonds Heilbronn, a major venture capitalist, was very opportune in 2008. IoLiTec relocated to Heilbronn into a larger, unoccupied building and enhanced its own capacities. The company has employed 22 people to date. “Employing people is an enormous responsibility,” Schubert stresses. “Therefore it’s great that we have been able to earn money from our technologies from the very beginning and show a profit on our balance sheet every year.” IoLiTec generates around one-quarter of its revenues from projects sponsored by the EU and the German government, including ones that focus on battery technology and fuel cells. The company is primarily involved in e-mobility and energy-revolution research projects. “Baden-Württemberg is home to the relevant clusters,” emphasizes Schubert, who also partners with numerous research organizations in Europe and the United States. Since relocating to Heilbronn, the founder of IoLiTec has also gained a number of customers in the neighborhood. “Ionic liquids have a diverse range of applications, because of their versatile properties.” In one reflection of this, IoLiTec develops nanotechnology applications, for instance, for furniture manufacturing and for use in household appliances, on behalf of hidden champions based in the HeilbronnFranconia region. The work they do keeps on giving Schubert and his colleagues new perspectives on what chemistry can achieve; “We keep on discovering new applications for ionic liquids and nanomaterials when we meet the specific needs of our customers.” business community. The state pursues the objective of enabling companies to benefit from the broad-based know-how of the institutions of higher learning and nonuniversity research organizations in order to increase the international competitive- ness of Baden-Württemberg as a business location. In addition, the state promotes the more effective utilization of university inventions, champions patent applications and supports business start-ups by young scientists. The Nobel Prize laureates Christiane Nüsslein-Volhard, Klaus von Klitzing, Bert Sakmann and Harald zur Hausen are representative of this excellent track record of scientific success. By adopting its policy of long-term, strategically focused support for research, the state is aiming to create international focal points, centers of excellence and alliances as well as to establish close links with nonuniversity research institutions. One core objective is the development of specific markets of the future with significant growth potential: @ Sustainable mobility @ Environmental technologies, renewable energies and resource efficiency @ Health care @ Information and communication technologies (ICT), green IT and intelligent products Bio-economics: Solutions that combine economic growth with global responsibility for feeding the world and protecting the environment, climate and nature need to be developed. The Ministry of Science, Research and the Arts has devised its bio-economics research strategy and established a financial support program to provide assistance to interdisciplinary, cross-location research alliances. Electro-mobility and lightweight vehicle design and construction: New mobility solutions are an integral part of the energy revolution. To make interlinking, electrification and automation a reality, an interplay of complex, integrated elements from the technology fields of vehicles, energy, ICT and production is required. The state agency e-mobil BW pools and coordinates all electro-mobility, networked, automated-driving and fuel-cell technology activities within Baden-Württemberg. The federal and state governments as well as the Stuttgart region provide financial assistance to the Elektromobilität Süd-West cluster and the LivingLab BWe mobil showcase in the amount of more than 200 million Euro. Lightweight design and construction: There are several lightweight design and construction initiatives in Baden-Württemberg. These include establishing the state agency Leichtbau BW (Lightweight Design and Construction BW), creating the collaborative research program Hybrid Lightweight Design and Construction, building the High Performance Fiber Center (HPFC) at the German Institute for Textile and Fiber Research (DITF) in Denkendorf and constructing the Research Campus at Stuttgart University called Active Research Environment for the Next Generation of Automobiles – ARENA 2036. The state agency coordinates knowledge-transfer activities, highlights innovation potential, initiates cross-industry and cross-technology collaborative ventures, supports the recruitment of junior employees and students to work in lightweight design and construction, and champions Baden-Württemberg as a research Investment Guide Baden-Württemberg and business location. Five collaborative research projects related to lightweight design and construction are tackling research topics along the hybrid lightweight design and construction value chain, extending from automated manufacturing to coupling technology through to processing. At the High Performance Fiber Center HPFC, several pilot lines are available for the research, development and manufacturing of high-strength carbon and ceramic fibers. The ARENA 2036 research campus unites research and development into the area of lightweight design and construction with innovative production technologies for the vehicle-manufacturing industry of the future. Energy research: Numerous initiatives like the Energy Lab 2.0 at KIT in Karlsruhe, the Industry-on-Campus (IoC) project Resources and Energy Efficiency Achieved by Process Technology Innovations, and the Wind Energy Research Cluster South (WindForS) at Stuttgart University are conducting research relevant to the energy revolution. Energy Lab 2.0 will become a smart platform to facilitate research into the interplay of components of future energy systems. To realize this, a simulation and control center as well as a power-plant network will be constructed at KIT Campus North by 2018. In addition, an electrolysis test center will be set up at the research center Forschungszentrum Jülich, and testing facilities to trial power-to-heat concepts will be built at the German Aerospace Center in Stuttgart within the same time frame. For the IoC project Resources and Energy Efficiency Achieved by Process Technology Innovations, Stuttgart University, KIT and the Fraunhofer Institute for Interfacial Engineering and Biotechnology are working together to set up a process center for resource-efficient process-technology methods. Partners within the WindForS network, which is leadmanaged by Stuttgart University, cooperate on matters of windenergy research and advanced training and further education. Aerospace engineering: Europe’s largest aerospace college is located at Stuttgart University. The Ecoflight research project has been incorporated into the DLR@Uni-Stuttgart project in order to establish the subject of electric aviation as a flagship project. Two globally unrivaled research platforms, e-Genius (IFB Uni Stuttgart) and Antares H2 (DLR-TT) are available for this purpose. Information and communication technology (ICT): ICT, both in its own right and as an interdisciplinary technology for all key industries in Baden-Württemberg, is a vitally important driver of innovation and an indispensable foundation for the longterm competitiveness of Baden-Württemberg as a business and science location. Besides existing institutions like the FZI Research Center for Information Technology, which is tasked with transferring the latest scientific findings to, in particular, SMEs, the state provides support for ICT innovation by backing specific projects. ICT applications are of particular importance. Key issues, which the state is increasingly addressing, include IT security, cloud computing, internationalization, mobility and the Digital Innovation Center, which is tasked with devising and providing information, consulting services and qualification upgrade strategies as well as supporting start-ups. 27 Industry 4.0: Industry 4.0 links the disciplines of mechanical and electrical engineering with information technology to deliver new, intelligently networked production methods for use in the factories of the future. Leading Industry 4.0 research organizations like the Fraunhofer Institutes for Manufacturing Engineering and Automation (IPA), for Labor Economics and Organization (IAO) and for Optronics, System Technologies and Image Exploitation (IOSB) as well as many Stuttgart University and KIT institutes are located in Baden-Württemberg. Reutlingen University and Stuttgart University have joined with the Bosch Group to establish a study and research center for power electronics, the Robert Bosch Center for Power Electronics. The Ingenieurwissenschaften@BW 2025 think tank has also begun its work. In its role as a research and teaching cluster, the Robert Bosch Center for Power Electronics covers the entire spectrum of higher education, research, technology transfer, promotion of young talent and scientific professional development in the area of power electronics. Power electronics will have industrial applications in electro-mobility, photo voltaics, wind power plants, microelectronics, medicine and drivetrain technology. The think tank, consisting of representatives from the scientific and business communities, analyzes the key engineering sciences required to make Industry 4.0 a reality and makes recommendations. Medical research and medical technology: The ministries concerned with science and social affairs have collaborated to establish the Health Telematics Task Force in order to improve telemedicine conditions in Baden-Württemberg for the long term. In addition, the Ministry of Science, Research and the Arts is supporting the creation of a statewide telemedicine coordination office at the Heidelberg University Faculty of Medicine in Mannheim with the aim of pooling existing telemedicine skills in the state. Excellence Initiative to support university-level scientific studies and research Baden-Württemberg has the best track record of all the states involved in the Excellence Initiative supported by the federal and state governments. Baden-Württemberg’s universities currently receive a total of 571 million Euro in funding from the ongoing 2012–2017 program. The state itself contributes one-quarter of the total amount (host-state share). The state is ensuring the long-term impact of the Excellence Initiative is retained by permanently allocating budget resources that benefit the universities concerned. These resources are equivalent to the state’s previous share, and extend beyond 2017. Baden-Württemberg is home to three of the current 11 Excellence Initiative universities across Germany: the universities of Heidelberg, Constance and Tübingen. BadenWürttemberg’s universities submitted 22 of the 99 approved applications for the Excellence Initiative II received from German universities. This figure of 22 can be broken down into 12 of the total of 45 graduate schools, seven of the 43 Excellence Clusters and three of the 11 future concepts. 28 Investment Guide Baden-Württemberg Baden-Württemberg Universities Source: Baden-Württemberg Ministry of Science, Research and the Arts. Investment Guide Baden-Württemberg Universities increase their share of external funding The state advances key research priorities as part of numerous financial support programs and helps its universities recruit top minds. In this respect, the flexible, fixed-term financial support of projects and priorities acts as a catalyst for the universities to tackle new fields of research, to develop them further after the support phase and to attract external funding. That this is often successful is reflected in the fact that income from external funding comprises the most important source of universities’ own income. In 2012, total income from external funding set a new record at around 821 million Euro. Compared with the previous year, income from external funding increased by 6 percent. This means that universities financed nearly one-quarter of their expenditure in 2012 using external funding. As in previous years, the biggest single share of total external funding, at 37 percent or 305.5 million Euro, was provided in 2012 by the German Research Foundation (DFG). The second most important source of external financial support was the German government, which substantially increased its external funding by 44.7 million Euro to over 228 million Euro in 2012. That is equivalent to an increase of over 24 percent at a share of 28 percent of total external funding. Supporting the next generation of scientific talent to secure Baden-Württemberg’s future as a location of innovation Baden-Württemberg provides targeted support to excellent young scientists ranging from the point they earn their doctorates to periods of postdoctoral work through to the obtaining of postdoctoral qualifications. By doing this, the state plays a significant role in helping the next generation of scientists earn qualifications. This also improves the employment situation of the nonprofessorial teaching staff in the higher-education sector. Support of graduate-school students: The state helps ensure the quality of doctorate degrees by employing a series of measures. These measures enhance the transparency and quality of the process for obtaining a doctorate degree and improve the mentoring of doctoral candidates. Particularly well-qualified young arts and science students have the opportunity to receive support for their doctoral projects as part of the state’s support program for graduate-school students. The DFG-funded institutionalized support of doctoral candidates through graduate research groups is particularly successful. Junior professorship program: Baden-Württemberg’s Junior Professorship Program supports junior professors in order to foster new, high-quality research projects at the state’s universities. The requirements for a junior professorship appointment include suitability to teach and the particular ability to conduct scientific work. 29 Equal opportunity: A fundamental principle of Baden-Württemberg’s higher-education policy is the promotion of equal opportunity for women and men in science. The focus here is on improving the work-life balance for science careers, supporting young female academics, boosting efforts to create equal opportunities and achieving higher percentages of female students in the natural sciences and technical degree programs. A key objective is to improve the situation of women working in scientific-oriented occupations at the state’s institutions of higher learning. The share of women holding professorships at Baden-Württemberg’s institutions of higher learning has increased steadily in the past few years. In 2013 that figure was nearly 19 percent. In the case of doctorates (2013: 43.1 percent) and completed postdoctorate work (2013: 28.1 percent), the share of women has also increased substantially. Special support programs such as the Margarete von Wrangell Postdoctoral Qualification Program have helped encourage this trend. Incubators and start-up networks: Ministry of Finance and Economics’ Business Start-up and Business Succession Initiative: www.gruendung-bw.de Baden-Württemberg Ministry of Science, Research and the Arts’ Young Innovators Program: www.junge-innovatoren.de L-Bank: www.l-bank.de Baden-Württemberg: Connected: www.bwcon.de Campus Startup Konstanz: www.campus-startup.org Career- und Gründercenter HS Aalen: www.htw-aalen.de/de/facilities/7 CONTACT-AS: www.contact-as.de CyberForum: www.cyberforum.de EXIST – Business Start-Ups in Science: www.exist.de Business Start-Up Office at Albert-Ludwigs University Freiburg: www.gruendung.uni-freiburg.de Gründerverbund Ulm: www.gruenderverbund-ulm.de HdM Startup Center: www.hdm-stuttgart.de/startupcenter Heidelberg Startup Partners: http://heidelberg-startup-partners.de HTWG Start GmbH: www.htwg-start-gmbh.de IHK-Campus Start-Up: www.ihk-campus-startup.de Institute for Entrepreneurship, Technology Management and Innovation (EnTechnon), Karlsruhe: www.entechnon.kit.edu KIT Gründerschmiede: http://kit-gruenderschmiede.de MAFINEX Gründerverbund Entrepreneur Rhein-Neckar: www.gruenderverbund.info PUSH!: http://push.region-stuttgart.de Technology Mountains: www.technologymountains.de TTI Technologie-Transfer-Initiative GmbH, Stuttgart: www.tti-stuttgart.de VC-BW – Netzwerk für Beteiligungskapital: www.vc-bw.de Softwarezentrum Böblingen/Sindelfingen e. V.: www.softwarezentrum.de Innovationsfabrik, Heilbronn: www.innovationsfabrik.de Innocel Innovations-Center, Lörrach: www.innocel.de Innotec Pforzheim – Zentrum für Software, Technik und Design: www.innotec-pforzheim.de innoWerft – Technologie- und Gründerzentrum Walldorf Stiftung GmbH: www.innowerft.com 30 Investment Guide Baden-Württemberg Business start-ups from universities and research institutes The state helps young scientists with innovative start-up ideas to set up their own businesses. The state’s institutions of higher learning and research institutes provide a good incubation environment where start-ups with innovative products and services can grow. Baden-Württemberg also provides targeted business-transfer and succession support. For this reason, the state offers a wide range of information, training and consulting services as well as support and financial instruments to highly qualified people who take the daring step of starting their own companies. The Young Innovators Support Program is designed to appeal to young scientific staff and science graduates of Baden-Württemberg’s institutions of higher learning and publicly funded nonuniversity research institutes. It supports specific preparations for business start-ups under the auspices of a university or research institute. Since establishment of this line of funding in 1995, the state has supported more than 211 projects and 328 young start-up entrepreneurs. In particular, the scientific spectrum encompasses sectors with a promising future, including optoelectronics, biotechnology, medical and solar technology, automation engineering and software development. The state’s official Internet portal for business start-up, transfer and succession, www.gruendung-bw.de, is an integral component of the Baden-Württemberg Ministry of Finance and Economics’ Initiative for Start-ups and Business Transfer, or ifex. It provides detailed information specific to particular industries, topics and target groups for start-up entrepreneurs and people seeking to acquire or transfer a business in Baden-Württemberg. Start-up alliances and incubators help young entrepreneurs remain on campus during the start-up phase of their businesses and conveniently use the resources available at institutions of higher learning and research centers. L-Bank, working in cooperation with the state of Baden-Württemberg, other support institutions and the European Social Fund, promotes business start-ups. Its portfolio of services for young entrepreneurs includes development loans, venture capital, mezzanine capital and loan guarantees. In addition, L-Bank operates three technology parks as meeting places for science and industry. By doing so, it creates synergies: partnerships and the exchange of experiences, knowledge and technology transfer and contact to political and business leaders. Attractive locations with good access to transportation infrastructure near institutions of higher learning and research institutes are augmented by integrated company infrastructure and services. These broad-based offerings in the technology parks relieve pressure from companies and allow them to focus on their core businesses. Technologiepark Karlsruhe GmbH (TPK) bundles a number of location benefits with the potential of the leading research and technology region of Karlsruhe. About 70 innovative companies with more than 3,000 employees are currently operating in 12 buildings. Technologiepark Tübingen-Reutlingen GmbH (TTR) is a representative example of innovation in the areas of bioand nanotechnology. With a broad range of institutions of higher learning, research institutes and hospitals, the parks offer an excellent environment for technology transfer between the scientific community and practical application. At TTR in Tübingen, the Start-up Center for Biotechnology leases fully equipped laboratories to new companies. In Reutlingen, flexible space is available for use as offices, laboratories and even clean rooms. The Stuttgarter Engineering Park GmbH (STEP) has more than 95,000 square meters of customizable office space available. More than 50 interdisciplinary companies with over 3,500 employees have already set up shop in STEP. to information about studying in Links Baden-Württemberg: www.studieninfo-bw.de www.bw-studyguide.com www.was-studiere-ich.de www.talent-aktiv-bw.de www.deutschlandstipendium.de www.studieren-mit-kindern.de http://mwk.baden-wuerttemberg.de 2.2.2 UNIVERSITY DEGREE PROGRAMS AND VOCATIONAL TRAINING Baden-Württemberg’s institutions of higher learning offer young people from Germany and abroad an abundance of degreeprogram options with a large number of educational paths. Students can choose from universities, colleges of education, colleges of art and music, universities of applied sciences and the Cooperative State University, all offering an array of majors and study options. In addition to the qualification options, the state offers students at every higher-education location an attractive urban environment and high quality of life. Tuition costs are also moderate, thanks to state subsidies. As part of a life-long-learning approach, continuing education is also becoming more relevant for students with work experience and professional qualifications. As a result, for several years now an increasing number of people who hold jobs have been attending Baden-Württemberg’s institutions of higher learning to obtain additional qualifications in study programs designed for working professionals. At the same time, the number of flexible, educational opportunities for working professionals is constantly expanding. To enable working students to balance their studies with their careers and family obligations, institutions of higher learning are breaking the traditional teaching mold. This approach includes, for example, employing different principles of teaching and providing more learning opportunities that are not dependent on time or place through the use of online and blended-learning programs. Investment Guide Baden-Württemberg 31 University model is unique in Germany and continues to be a very successful educational innovation. In this model, theoretical phases taking place at institutions of higher learning alternate with practical phases carried out at a company. The number of students attending Baden-Württemberg‘s institutions of higher learning has never before been so high as now. According to the State Statistical Office, more than 344,000 students attended the state’s institutions of higher learning during winter semester 2013/14. More than half of these students were enrolled at state universities (almost 51 percent), followed by universities of applied sciences (almost 40 percent when taken together with the Cooperative State University) and colleges of education (7 percent). International study opportunities Buildings at the Tübingen-Reutlingen technology park. Source: Technologiepark Tübingen-Reutlingen GmbH. Institutions of higher learning The institutions of higher learning in Baden-Württemberg boast high standards for research and teaching. Students can choose among: @ Nine universities @ Twenty-three universities of applied sciences @ Six colleges of education @ Nine branches of the Baden-Württemberg Cooperative State University @ Eight colleges of art and music @ One administration and economics academy @ One film academy @ One pop academy @ One academy of dramatic arts @ Twenty-seven state-approved private universities Baden-Württemberg is practically unrivaled in Germany for the broad diversity of choices in the institutions of higher learning and degree programs it offers potential students. The state‘s institutions of higher learning perform well in comparison with international counterparts. These institutions continually place highly in German and international rankings, including the CHE University Ranking. The universities of Heidelberg and Tübingen were among the top five German universities for 2014/15 in THE World University Rankings. The international reputation of Baden-Württemberg‘s institutions of higher learning attracts many students from Germany and abroad. The state‘s colleges of art and music teach young artists and performers from all over the world. The Cooperative State Across nearly all disciplines, the degree programs at the state’s institutions of higher learning are very international in character. Within this context, such aspects as digital networks, international exchanges and partnerships are playing an increasingly important role. In the course of Europeanization and globalization, gaining international experience has become substantially more relevant to students. This is reflected in the fact that many students at Baden-Württemberg’s institutions of higher learning complete a semester abroad or even a full degree program in other countries. For that reason, students interested in studying abroad can take advantage of a large number of state programs, university partnerships and scholarships. This includes, for instance, the Baden-Württemberg-STIPENDIUM, which provides financial aid to around 1,200 students studying outside Germany each year. Mobility in education going in the other direction is also on the rise. In the winter semester 2013/14, the share of international students attending Baden-Württemberg’s institutions of higher learning grew to 12.4 percent. At this point in time, a total of 42,600 foreign students were studying at Baden-Württemberg’s institutions of higher learning. In particular, the introduction of internationally comparable study structures with bachelor’s and master’s degrees initiated as part of the Bologna process is promoting the development of a shared European region of higher education. Information about study programs for immigrants Baden-Württemberg welcomes applications from people with an immigrant background who are interested in studying at one of the state’s institutions of higher learning. The www.talent-aktiv-bw.de Internet portal provides initial information on this topic. In addition, the service point Studieninformation, -orientierung und -beratung (SIOB) stands ready to advise potential students on their choice of a suitable major and to assist them in organizing their degree program. 32 Investment Guide Baden-Württemberg Students from Reutlingen University at a textile design press. Source: Atelier Scheuring. University websites: www.uni-freiburg.de www.uni-heidelberg.de www.uni-hohenheim.de www.kit.edu www.uni-konstanz.de www.uni-mannheim.de www.uni-stuttgart.de www.uni-tuebingen.de www.uni-ulm.de Universities At the core of Baden-Württemberg’s higher education systems are the nine state universities. In this system, students both receive a sound, theory-focused education and learn how high-level research and teaching can be interlinked. The universities regularly place very high in the various German rankings as well as compete well at the international level. They provide ongoing support in various areas to Baden-Württemberg in its role as a science location. These efforts include fostering young scientists, promoting technology transfers, providing continuing education opportunities and extensively exchanging information with companies. Offering a particularly broad spectrum of subjects and disciplines are Baden-Württemberg’s oldest universities in Heidelberg, Freiburg and Tübingen. The universities in Karlsruhe and Stuttgart are, in particular, specialized in engineering and the natural sciences. Hohenheim, Constance, Mannheim and Ulm universities each have their own particular subject focal points and degree programs. In one reflection of this, Mannheim University is well known for the sound education it provides in economics and social science. Hohenheim University focuses on economics and agricultural science. As a public entity, the Karlsruhe Institute of Technology (KIT) holds the status of both a university and a major national research center within the Helmholtz Association (see box on p. 33). Upon completion of their studies, students graduate with one of the following degrees: @ Bachelor’s @ Master’s @ State examination A bachelor’s degree can be earned within six to eight semesters. A master’s degree can be earned after completing two to four additional semesters with a specific area of focus. Some majors allow students to earn a degree at a foreign university—in addition to the German degree—within the framework of an integrated international study program. After graduation, a student may enter a doctoral program with the option of then pursuing other academic qualifications, such as a junior professorship, or postdoctoral research. Investment Guide Baden-Württemberg Universities of applied sciences: www.hs-aalen.de www.hs-albsig.de www.hochschule-biberach.de www.hs-esslingen.de www.hs-furtwangen.de www.hs-heilbronn.de www.hs-karlsruhe.de www.hs-kehl.de www.htwg-konstanz.de www.hs-ludwigsburg.de www.hs-mannheim.de www.hfwu.de www.fh-offenburg.de www.hs-pforzheim.de www.hs-weingarten.de www.reutlingen-university.de www.hs-rottenburg.de www.hfg-gmuend.de www.hdm-stuttgart.de www.fht-stuttgart.de www.hs-ulm.de www.fhpol-vs.de www.fh-schwetzingen.de THE KARLSRUHE INSTITUTE OF TECHNOLOGY (KIT)—GERMANY’S LARGEST RESEARCH AND TEACHING ORGANIZATION KIT in its present form was established in 2009 as part of Germany’s first merger of a major university, the University of Karlsruhe, with a major nonuniversity national research organization, the Karlsruhe Research Center in the Helmholtz Association. As a public entity, KIT unites university and nonuniversity research, provides excellent instruction to its students and lays the foundation for a wide range of product and process innovations. The new institute has around 9,000 employees, 20,000 students, more than 300 professors and an annual budget of about 700 million Euro. The focal points of KIT research are energy, nano- and microtechnology, the environment and climate issues as well as elementary and astroparticle physics. KIT is also involved in materials science, communications and information technologies, optics and photonics as well as research in the area of mobility systems. Link to the Karlsruhe Institute of Technology (KIT): www.kit.edu Universities of applied sciences of the Baden-Württemberg Cooperative Branches State University: The 23 universities of applied sciences in Baden-Württemberg are particularly synonymous with the concept of combining science with practical experience. A comprehensive network of these universities strengthens the economy as well as structural aspects of Baden-Württemberg as a whole and the individual regions. In cooperation with the state’s business community, universities of applied sciences educate students to become qualified workers. They also make university personnel and equipment resources available for knowledge and technology transfer. Nearly all state-sponsored universities of applied sciences have an institute for applied research that serves as a point of contact for companies wanting to collaborate with the institution of higher learning on research. www.dhbw.de www.dhbw-heidenheim.de www.heilbronn.dhbw.de www.dhbw-karlsruhe.de www.dhbw-loerrach.de www.dhbw-mannheim.de www.dhbw-mosbach.de www.dhbw-ravensburg.de www.dhbw-stuttgart.de www.dhbw-vs.de Colleges of education In the colleges of education that train teachers, Baden-Württemberg has its very own form of institution of higher learning that can also award doctoral and postdoctoral degrees, a feature that differentiates it from other German states. The high-quality, hands-on training of teachers for elementary, intermediate, secondary general, intermediate and special schools is highly focused and upholds strong academic standards. 33 Baden-Württemberg Cooperative State University Baden-Württemberg State Cooperative University (DHBW) can be regarded as one of the state’s most successful educational innovations. After all, it has earned a reputation as a highly respected, proven and forward-looking model of tertiary education. The education of students at the university closely links theory learned in the classroom with practices implemented in business. The nine branches of the Baden-Württemberg Cooperative State University in Heidenheim, Heilbronn, Karlsruhe, Lörrach, Mannheim, Mosbach, Ravensburg, Stuttgart and Villingen-Schwenningen currently have more than 33,000 students and partner with around 9,000 companies and social services agencies. The broad spectrum of majors focuses in particular on business administration, technology and social work. 34 Investment Guide Baden-Württemberg When it established the Center for Advanced Studies in Heilbronn in October 2014, the DHBW brought together its dual master’s degree programs with continuing education opportunities in the sciences, the Zentrum für Hochschuldidaktik und lebenslanges Lernen and the DHBW Test Center. DHBW has now gained university status, which significantly raises the national and international stature of dual-study programs that draw from Baden-Württemberg’s model. Other key features of the Cooperative State University include a commitment to collaborative research, training company membership in the Cooperative State University and their participation in committees and working groups. Colleges of music, the arts and media (a selection): www.adk-bw.de www.mh-freiburg.de www.hfg-karlsruhe.de www.hfm-karlsruhe.de www.kunstakademie-karlsruhe.de www.filmakademie.de www.muho-mannheim.de www.popakademie.de www.mh-stuttgart.de www.abk-stuttgart.de www.mh-trossingen.de Colleges of art and music Baden-Württemberg offers a wide variety of college-level educational opportunities in all branches of the arts. The five colleges of music, three art schools, the Pop Academy, the Baden-Württemberg Film Academy and the Academy of the Performing Arts train students for the entire spectrum of careers in the arts: artists, teachers, managers and producers. In addition to traditional arts, new media and new technologies play an important role at all these colleges. Private university links (a selection): Zeppelin University Friedrichshafen: www.zu.de SRH Hochschule Heidelberg: www.hochschule-heidelberg.de Internationale Karlshochschule: www.karlshochschule.de AKAD Bildungsgesellschaft: www.akad.de Private universities Private universities complement the educational programs offered by public universities. With 27 private universities, BadenWürttemberg has the most such institutions of higher learning in Germany. The state’s Ministry of Science assures the quality of academic programs offered by private institutions of higher learning by conducting careful reviews and accreditation processes and then issuing state certification to the specific institutions. Professional development links (a selection): www.fortbildung-bw.de www.handwerks-power.de www.bildungsakademie.de www.steinbeis.de/index.php?id=119/L=0 www.biwe.de www.dgwf.net College-level professional development Given the rapid changes sweeping through the world of work, lifelong learning is an indispensable component of the knowledge society of the 21st century. In 2011, Baden-Württemberg had already launched its Bündnis für Lebenslanges Lernen (Alliance for Lifelong Learning, or BLLL). Members of this alliance include around 40 Baden-Württemberg umbrella associations, organizations and individual institutions involved in general, vocational and college-level professional-development programs as well as the relevant government ministries. Those interested in this topic will find a summary of information and points of contact at the www.fortbildung-bw.de Internet portal. The state’s institutions of higher learning are playing an increasingly more important role as places of lifelong learning. In the future, even more students with work experience or professional qualifications will be able to make use of these universities and colleges for professional development. The number of flexible, part-time educational opportunities is constantly expanding. In the past few years Baden-Württemberg has made the transition from career to university or college easier: Institutions of higher learning will take skills acquired over the course of a career more into consideration. Graduates of recognized career-advancement training such as, for instance, master craftspeople and specialists can access general higher education programs. Those with professional qualifications and at least two years of vocational training can qualify for subjectrelated entry to these general higher education programs once they have completed a proficiency test. Admission to the proficiency test generally requires three years of professional experience. Introduction of the extension bachelor’s degree in the new State Higher Education Act of 2014 provides people who have already completed vocational training at the secondary-school level access to a new undergraduate degree program. The state’s Master Online program supports the establishment of multimedia, online-assisted postgraduate programs in selected disciplines. The target group of these degree programs is college graduates who now have jobs and who want to enhance their qualifications by adding specialized technical content. The program is conducted in conjunction with participants’ normal work schedules and can be primarily completed by taking supported online courses. The degree programs lead to a master’s degree. Another example of the close cooperation between the state and regional institutions with respect to the issue of college- Investment Guide Baden-Württemberg level professional development is the Servicestelle Hochschulwirtschaft. Here the state works closely with the Educational Institute of Industry and Commerce in Baden-Württemberg, in particular Südwestmetall, the regional association of the metal and electrical industry. The state has also established a partnership with the Baden-Württemberg group of the German Association for University Continuing and Distance Education. The partnership brings together the continuing education departments of the state’s institutions of higher learning. The dual vocational education program: www.gut-ausgebildet.de www.service-bw.de (about employees’ circumstances) The dual vocational education program The second route to completing a degree at an institution of higher learning is nonacademic vocational training within the dual education system, a parallel program at a company and in a vocational school. The dual education system closely links practical training with theoretical instruction. Trainees learn the practical side of work at the companies where they train, while the vocational school provide the theoretical underpinning. During the training program, young people are increasingly integrated into the company’s work flow. In Germany, there are about 350 government-approved training occupations. In Baden-Württemberg, approximately 196,000 young people completed such training programs in 2013—more than half of each age group. By completing a dual vocational education program, young people fulfill the basic three-year vocational-training requirement. Young people who do not start a vocational training program after finishing secondary school and also do not attend a continuing vocational school initially fulfill their vocational training requirement in a one-year program of vocational preparation or vocational orientation. In addition to the dual system, young people have the option of receiving vocational training at a technical school or—for students with an intermediate secondary education—at vocational colleges. There is also the option of continuing vocational education at a technical college. In a separate program, young people can obtain a higher-level high-school diploma all the way up to the Abitur by attending two-year vocational-training schools, vocational preparatory schools, vocational colleges and vocational college-preparatory secondary schools. In Baden-Württemberg, practically all young people who want to complete a dual vocational education program obtain a place by taking one of the routes described above. That can enter an actual apprenticeship program or complete the one-year vocational-preparation program or earn an introductory qualification by attending a continuing vocational secondary school or a career-preparation course. This very comprehensive inclusion of all young people with their professional careers can be attributed to the close cooperation among the government, 35 the business community, trade unions, the Federal Employment Agency and municipalities. The low youth unemployment rates are also a testament to the success of labor-market policies in Baden-Württemberg and to the dual vocational training program in Germany. In September 2015, youth unemployment totaled just 3.1 percent in Baden-Württemberg. This is the lowest rate in Germany and also one of the lowest rates in Europe. The fact that so many young people can commence vocational training after completing their secondary school education can, in particular, be attributed to the companies in the state that are willing to provide training and offer a large number of apprenticeship positions. Today’s school graduates are tomorrow’s working professionals whom Baden-Württemberg as a business location urgently needs. The great interest being shown by other European countries and the United States in the dual vocational training program demonstrates that its success has gained international recognition and success. 36 Investment Guide Baden-Württemberg 3 ECONOMIC STRUCTURE AND BUSINESS DEVELOPMENT @ The land of tinkerers and thinkers, of start-up entrepreneurs and exporters, has a broad-based, technically advanced economic structure that is unrivaled anywhere in the world. Baden-Württemberg is home to global corporations as well as to international midsized companies that have become niche market leaders by providing specialized solutions and good service. Competing on the global market while remaining rooted in the region has created a corporate landscape that is able to preserve jobs and capital resources in tough economic times as well as unleash new vitality in boom times. In one reflection of this, Baden-Württemberg’s economic output in 2015 is likely to have increased by more than 2 percent and once again have grown faster than the German average. For highly qualified skilled professionals from Germany and abroad, these are ideal conditions—conditions that are augmented by a wide range of personal-development opportunities available in communities throughout the state. 3.1 ECONOMIC STRUCTURE Industry with a service culture—part of the state’s cultural DNA A glance at the histories of long-established Baden-Württemberg businesses consistently reveals a key driving force behind the company founders: the search for a better solution. This credo is still present in midsized companies and major corporations that maintain programs fostering employee inventions and suggestions as the primary source of their power to innovate. It is therefore no coincidence that Baden-Württemberg is Europe’s most innovative region. The state has traditionally headed the German rankings in terms of per capita patent applications. Work on a notching press. Source: Schuler AG. Continuous enhancement of products and processes coupled with a pronounced willingness to change has launched a large number of Baden-Württemberg’s companies to the top in their respective international markets. Industrial expertise and business excellence are sustained through a strong focus on the customer focus and a marked service mentality. Outside of companies and their market environments, this culture is reflected in residents’ involvement in their communities and strong civic competence. As a result, Baden-Württemberg is also among the leading states in Germany in terms of its citizens’ volunteer activities. Baden-Württemberg’s companies have developed a successful international value-creation strategy that draws on technological and entrepreneurial skills along with cultural and social Investment Guide Baden-Württemberg Map of regional clusters in Baden-Württemberg Source: Cluster Atlas Baden-Württemberg 2015, Baden-Württemberg Ministry of Finance and Economics. 37 38 Investment Guide Baden-Württemberg awareness. The business creativity of the major corporations and midsized companies that represent the Baden-Württemberg brand worldwide is sweeping, encompassing the power to innovate, close cooperation with local research and science institutes on project partnerships, joint research activities and skills networks as well as technology- and industry-focused clusters and the establishment of cross-border networks of suppliers, production facilities and sales centers. The international partners and competitors of these companies are also aware of this fact. That is why they want to tap into the source of this success by investing in the state. In striving to achieve maximum production efficiency and offer the best solutions to customers, companies in Baden-Württemberg focus on cutting-edge technology sectors like mechanical engineering, electrical engineering and vehicle manufacturing as well as on cross-sector industries like environmental and energy engineering, information and communications technology (ICT), photonics, microsystems engineering, materials and surface-finish technology, and bio- and nanotechnology. The state and the business community are committed to these industries of the future in order to maintain their own leadership and enhance their expertise in dealing with the structural transformation of industry. As part of the Forward IT initiative, ICT industry stakeholders in the state have joined forces to form the IKT-Allianz Baden-Württemberg (ICT Alliance Baden-Württemberg). The objective of this alliance is to play an active role in the process of digital transformation and advance this critical area. Key players have jointed together to form the Industry 4.0 Alliance and pool their activities to support small and midsized enterprises and their employees on the path to Industry 4.0. Daimler AG, is regarded as one of the most respected industrial companies in the world, just like Porsche, Bosch, Würth, Trumpf and Voith. All these global players bear the names of Baden-Württemberg families and are to some extent still under family ownership today. Companies like SAP, which was founded by former IBM managers and has advanced to become one of the world’s leading software service providers, represent the entrepreneurial spirit of the people in Baden-Württemberg. But it is the small and midsized enterprises (SMEs), which have competed successfully in international markets for a considerable time now, and the self-employed, whose business activities often occupy key points in the value chain, who create the basis for this industrial efficiency and excellence. Twothirds of all jobs and 80 percent of trainee positions in BadenWürttemberg are provided by midsized companies. As a result, this sector generates more than half of the state’s economic output. Together with the major corporations, small and midsized businesses incorporate a wide range of different activities, giving Baden-Württemberg exceptional industrial diversity. In addition, companies are closely linked across industries and form regional manufacturing and skills networks. These regional clusters are complemented by the state’s extensive research landscape consisting of institutions of higher learning, nonuniversity research organizations and private institutes, which together champion the enhancement of industrial know-how. This industrial performance and efficiency extends throughout the state, with none of the 44 urban districts and counties can be regarded as structurally weak. The distinct strengths and industrial focal points of the regions have each resulted in differing employee qualification patterns that guarantee a high degree of job security, even in times of crisis. Global excellence Competitiveness and effective networks have enabled Baden-Württemberg’s companies to attain worldwide leadership in their respective industries. In 2015, Mercedes-Benz was again voted Germany’s most valuable brand. Its brand parent, Thanks to the continuous investments being made in research and development in Germany, Baden-Württemberg is the leading German state and one of the leading regions in the EU in terms of complex, forward-looking technologies. Of all the states in Germany, Baden-Württemberg invests the most in Industrial structure 5.1 2.5 2.2 2.1 1.8 24.7 5.1 Mechanical engineering Manufacture of motor vehicles and components 5.0 Manufacture of other goods Manufacture of data-processing systems, electronic and optical products Manufacture of rubber and plastic products 8.1 17.6 11.9 13.9 Manufacture of metal products Manufacture of electrical equipment Manufacture of food and feed Production of pharmaceutical products Production of paper, cardboard and products Metal production and processing Manufacture of chemical products Share of Baden-Württemberg’s workforce involved in manufacturing, in % ; annual result = monthly average; total of 1,073,313 employees. Source: Baden-Württemberg Statistical Office. Investment Guide Baden-Württemberg research and development. Expenditure on research and development as a share of gross domestic product is 4.8 percent (see chapter 2, p. 24). Institutions of higher learning, external research institutes and transfer centers between the scientific and business communities are key components of the state’s research infrastructure. For this reason, the state is strengthening business-related research institutes and facilitating successful technology transfers, particularly to SMEs. This is also reflected in the fact that the state is a creative hotbed of invention: With more than 14,500 patent applications to the German Patent and Trademark Office in 2014, Baden-Württemberg is only second to Bavaria in terms of absolute figures. No other state files as many patents per capita as Baden-Württemberg. In 2014, the most active patent applicant was Robert Bosch GmbH, at well over 4,000 applications. The majority of patent applications in Germany are filed by vehicle manufacturers and mechanical-engineering companies. Industry and services Baden-Württemberg’s economy features four leading industries: mechanical engineering, vehicle manufacturing, information and communications technology, and electrical engineering. Together they generate around two-thirds of total industry revenues in the state. More than half of the capital goods produced are exported abroad. Alongside these lead industries, the metal-processing, chemicals and pharmaceutical industries are also major elements of Baden-Württemberg’s industrial profile. The state’s industrial sector has an international focus: In 2014, companies with more than 50 employees achieved an export share of 56.3 percent in terms of sales abroad as a share of total sales. In Baden-Württemberg, the manufacturing industry—that is, industry and construction, recorded a higher share of value added than in any other German state. In 2014, nearly 40 percent of gross value creation was attributed to the manufacturing industry and about 60 percent to services. Despite the inverted proportions of gross value creation, the manufacturing industry has a much greater macroeconomic impact than the services sector because of its strong interconnectedness to industryrelated service providers. In recent years, the service sector in Baden-Württemberg has grown dynamically. In addition to the traditionally strong manufacturing industry, company-related and consumer-focused services have rapidly expanded. Among company-related services, research and development, media, information and communications services, consulting services and financial services are particularly successful. The dynamic growth of the services industry is also reflected in employment figures. In 2014, a total of 6 million people were employed in the Baden-Württemberg economy. Of this number, the services sector employed 4 million people, the manufacturing industry nearly 1.9 million, and agriculture and forestry nearly 0.1 million. Nearly every other person working in the state primarily holds a service-related job like planning, research and organization. As a result, a total of about four-fifths of the 39 state’s employed residents have a service-related job. Retailing, the leisure industry, financial services and self-employed professionals are widely represented in the state’s services sector. The traditional yet innovative crafts and trades industry rounds out Baden-Württemberg’s economic structure. Baden-Württemberg is characterized by a multifaceted variety of economic clusters. Many companies, research institutes and universities have joined regional cluster initiatives and statewide networks. Clusters are innovative, regional business associations. In regional clusters, companies—including competitors— work together to conduct goal-oriented work with partners from research institutes, the scientific community and trade associations. The shared goal is to increase the total benefit of a company’s own business activity. This facilitates innovation processes through an interdisciplinary exchange of knowledge and experience. Concrete results can include innovative products and services for domestic and international markets. The “2015 Baden-Württemberg Regional Cluster Atlas” captures information about these specialties within a single publication. The ClusterAgentur Baden-Württemberg provides support to cluster initiatives and statewide networks to help them continue to professionalize their operations. to the regional cluster atlas and to the cluster Link database: http://s.faz-i.de/4pa www.clusterportal-bw.de/clusterdatenbank/clusterdb/Cluster/ list 3.2 REGIONAL ECONOMIC CLUSTERS Automotive industry Baden-Württemberg is Germany’s leading location for the manufacture of motor vehicles and their components. One out of every four jobs in the automotive industry is located in Baden-Württemberg. More than one-fifth of industry revenues are generated in the state, and about 30 percent of capital expenditures made by the industry throughout Germany are generated in BadenWürttemberg locations. In Baden-Württemberg, the industry is home to world-renowned brands, leading automakers and a strong supplier sector with companies that cover a broad spectrum of the value chain. The automakers work very closely with their suppliers. Suppliers from other industries also play an important role. They primarily come from the information and communications technology and the electrical-engineering sectors as well as the metal and the rubber and plastics industries. Mechanical engineering is the largest industrial employer in the state. It is followed by motor-vehicle and vehicle-component manufacturing, a key industrial sector with 225,000 employees and revenues of almost 100 billion Euro. The industry generates most of its revenues in international markets (around 70 billion Euro). There is hardly any other industry that is so export oriented. A total of 40 percent of revenues generated abroad by 40 Investment Guide Baden-Württemberg INDUSTRY 4.0—MADE IN BADEN-WÜRTTEMBERG The digitization of industrial production is regarded as the fourth industrial revolution, which structures the production of goods in the form of networks of suppliers, producers and customers. It facilitates a flexible and efficient use of resources as well as a focus on customer requirements all the way through made-to-specification industrial production. The cyberphysical systems needed for this process have been a reality since the start of the new millennium as a result of miniaturization of the necessary electronics, software enhancements, interlinking with the Internet of Things and the development of smart mechatronics. Baden-Württemberg is striving to become a leading Industry 4.0 location. For that reason the state established the Allianz Industrie 4.0 Baden-Württemberg in March 2015 in order to link all the relevant stakeholders. Mechanical- and electricalengineering companies in Baden-Württemberg are jointly developing the basis for smart, networked production methods in the factories of the future in tandem with the IT industry. This also involves improved cooperation among various sectors in conjunction with an optimization of value chains and industrial processes. Key issues here include new work environments, security, standardization and the development of new business models. Baden-Württemberg as an industry location is in a position to demonstrate its ability to innovate through the enhancement of production methods. Convergence with the Internet-based economy increases the appeal of industrial companies to digital-native job applicants and to jobseekers with programming and application knowledge related to the web-based solutions required by Industry 4.0. A critical requirement for the formation of an effective network interlinking Baden-Württemberg’s decentrally located industrial companies is comprehensive availability of high Internet-connection transmission rates (broadband connections with at least 50 MBit/s). Baden-Württemberg’s companies and institutes also cooperate closely with other organizations in Germany and abroad. A very successful example of this type of cooperation is the SmartFactoryKL in Kaiserslautern, the world’s first cross-manufacturer Industry 4.0 plant. The system’s modular structure facilitates fast, flexible configuration of production lines. Modules supplied by various technology the state’s industry can be attributed to this sector. Its export share is 73 percent due to the rapid spread of globalization. Seventy-five percent of international revenues are now generated doing business with customers outside the eurozone. In addition, Baden-Württemberg has a strong structure, with more than 1,000 automotive suppliers, many productionequipment suppliers and service providers from various sectors. A survey carried out by the Fraunhofer Institute for Systems and companies based in Baden-Württemberg, such as Bosch Rexroth, Festo, Hirschmann, Pilz, SAP and Wittenstein have been incorporated into the SmartFactoryKL. These companies are contributing smart sensor and actuator technology as well as interfaces and software and are jointly developing the necessary know-how to achieve outright digitization and integration of industrial value chains. Other components include IT infrastructure and IT security, which are provided in Baden-Württemberg by, for example, Leuze elektronik, HMS, Industrla Networks, Pepperl und Fuchs, AlcatelLucent, telent, Festo and Balluf as well as by WIBUSystems and Avira. In total more than 1 million people in Baden-Württemberg work in sectors that are directly related to Industry 4.0. Other sectors besides mechanical engineering and vehicle manufacturing include the metal, electrical-engineering and electronics industries as well as ICT services. Revenues generated by these sectors totaled more than 270 billion Euro in 2014, which is equivalent to around 60 percent of the state’s economic output. The outlook for demand in the next few years is positive: According to a study carried out by the consulting company PwC, those German companies surveyed want to invest around half of their equipment budgets in Industry 4.0 projects. The interest in investing in digitization and smart networks shown by plant and mechanical-engineering companies and by the ICT industry is rather high. Sectors involved in Industry 4.0 in Baden-Württemberg: (2014; basis: companies with more than 20 employees) Sector Revenues (in M€) Employees Mechanical engineering 70,761 304,476 Vehicle manufacturing 98,676 225,389 Metal production and processing, manufacturing of metal products 31,861 168,906 Manufacturing of electrical equipment 21,869 99,812 Manufacturing of computer equipment as well as electronic and optical devices 13,623 62,200 Information and communication services1 36,711 153,766 1) Details relate to 2013. Source: Baden-Württemberg State Statistics Office. Innovations Research (ISI) revealed that around 13 percent of all employees in the chemicals industry, around 20 percent of workers in the rubber and plastics industry and around 32 percent of all employees in the metal-working and metal-processing industry can, in a broader sense, be considered as working for automotive suppliers. Like the automakers themselves, the vehicle-supplier industry enjoys an excellent reputation around the world. It is characterized, in particular, by exceptional flexibility and responds to globalization trends among automakers in the process. Investment Guide Baden-Württemberg 41 Biotechnology Biotechnology is one of the most important cross-sector technologies of the 21st century. Its focal point is red biotechnology, which primarily addresses the issues of biopharmaceuticals, regenerative medicine and diagnostic tests. Other fields include green and white biotechnology. This technology field cannot be restricted to a few industries. Rather, it applies to many application areas, primarily medical technology, pharmaceuticals and chemistry. Its range includes bioprocess engineering, medical-pharmaceutical biotechnology, food biotechnology, genetic engineering, bioinformatics, nano-biotechnology and stem-cell therapy. The industry’s business is stable, with taxable revenues totaling 2.4 billion Euro in both of the past two years. Systems that provide more assistance to drivers. Source: Daimler AG. Vehicle manufacturing in Baden-Württemberg consists of several major companies on the production and system-supplier side as well a wide range of small and midsized enterprises among the suppliers. In one reflection of this, around 40 vehicle and engine makers are located in the state, with Daimler AG and Porsche AG leading the way. Audi AG also has an important production and development location in the state. In the commercial-vehicle and auto-tuning sector, such major companies as Mercedes-Benz Trucks, Volvo Busse Deutschland GmbH, Kässbohrer Geländefahrzeug AG, Mercedes-AMG GmbH, quattro GmbH and BBS Kraftfahrzeugtechnik AG are based in the state. Eleven of the 12 regions in the state have been designated automotive clusters. Mass-produced automotive products and vehicle end products are manufactured in the regions of Stuttgart, Heilbronn-Franconia, Danube-Iller, the mid–High Rhine region and the Rhine-Neckar metropolitan area. The automotive industry is characterized by a broad range of value-creation activities. The regional clusters set up in the state have also been incorporated into a statewide innovation network under the umbrella of Automotive-BW. Automakers and their suppliers can draw on the substantial know-how of specialists, engineers and research institutes in Baden-Württemberg. The state’s institutions of higher learning train young skilled workers by offering vocational training and courses of study in construction and process engineering, vehicle technology and engineering, mobility technology, and mechanical and plant engineering required for production. Issues involving all aspects of the automobile are explored by institutions of higher learning and business-related research institutes. The focus of such research is sustainable mobility, including alternative drive systems, lightweight construction and smart traffic systems. According to the study “Technologien, Tüftler und Talente” (“Technologies, Tinkerers and the Talented”) conducted by management-consulting firm McKinsey & Company and by the Institute for Applied Economic Research (IAW) at the University of Tübingen, Baden-Württemberg can generate added value of 3 billion Euro to 5 billion Euro annually through 2020 with products and services from the area of sustainable mobility. With nearly 100 companies and more than 2,700 employees, Baden-Württemberg is one of Germany’s leading biotechnology locations. As a result, Baden-Württemberg is the second-biggest biotechnology location in Germany, with a complete value chain that extends from research and development to production and sales. Both small and midsized companies, like the third-largest contract manufacturer of biopharmaceuticals, Rentschler Biotechnologie GmbH, as well as global corporations like Roche, Boehringer Ingelheim and Aesculap, are representative of this industry in Baden-Württemberg. Baden-Württemberg has one of Germany’s highest concentrations of biotechnology activities. About 45 percent of companies have fewer than 10 employees and an additional 45 percent have up to 50 employees. Biotechnology is a new, knowledge-intensive technology and an important source of innovative products and processes. Eight universities, 11 universities of applied sciences, 19 nonuniversity research institutes and four university medical centers conduct biotechnology-relevant research with a high level of innovation for the health-care industry. An example: The cutting-edge BioRN cluster in the Rhine-Neckar-region includes, for instance, Heidelberg University, the German Cancer Research Center and the European Molecular Biology Laboratory as well as international companies like Roche, Merck Serono and AbbVie and around 80 SMEs. Bioparks, which receive financial support from the state and are open to business start-ups, are located in this area as well as in the regions of Ulm and Freiburg and in the Stuttgart metropolitan region. L-Bank offers two technology parks that concentrate on bio- and nanotechnology in Tübingen and Reutlingen (Technologiepark Tübingen-Reutlingen, or TTR). Energy Baden-Württemberg provides a good business environment to energy service providers and manufacturers of energy technologies used in both conventional power generation and renewable energy usage. The state has a high level of renewable-energy expertise and is a pioneer in fuel-cell technology. The development of new fuel-cell technologies for wide-scale use is of major relevance, especially to the automotive industry. Companies from different industries are actively involved in this segment: In one example of this, the 42 Investment Guide Baden-Württemberg Mechatronics training at ABB. Source: ABB. vehicle manufacturer Daimler conducts research through its subsidiary NuCellSys. Suppliers such as Freudenberg and Mann + Hummel as well as energy providers like Energie Baden-Württemberg AG (EnBW) are working on solutions to this forward-looking issue. Around 4,000 companies employing some 31,000 people are involved in the energy-supply sector in Baden-Württemberg. Renewable energies are playing an increasingly important role in their businesses. In the wind-energy segment, more than 200 supplier companies in Baden-Württemberg are developing and producing systems and components for companies in the wind industry, including familiar manufacturers like Liebherr and Voith Turbo. In the hydropower segment, two of the world’s most important specialists for hydropower units, Voith Hydro and Andritz Hydro, are represented in the state along with numerous components suppliers. The bio-energy and geothermal energy segments have a similar profile. Health-care industry Health care has a high priority in Baden-Württemberg. People resident in the state enjoy a good standard of health-care provision, and the health-care industry is an important sector of the economy. According to the OECD, health-care expenditure per inhabitant was around 3,600 Euro in 2012. Total expenditure on health-care-related products and services throughout Baden-Württemberg amounted to more than 38 billion Euro in 2012. This equates to average per capita spending of 3,600 Euro—more than 100 Euro below Germany’s national average. The lower level of costs is due to more favorable demographic trends and the above-average good health of the state’s residents. This segment benefits from innovations in medical technology as well as in the pharmaceutical and biotech industries. The health-care sector consists of public health services and the health-care industry. Public health services include inpatient, partial-hospitalization and ambulatory care, health protection, emergency medical services and similar areas. The health-care and intermediate service industries include medical technology, the pharmaceutical industry and biotechnology. The health-care industry employed about 710,000 people in Baden-Württemberg during 2012. These people worked in many professions and occupations, including about 76 percent in ambulatory and inpatient health care. Based on these figures, nearly one out of every nine employees in the state works in the health-care industry. Forecasts show that this figure is expected to rise to over 20 percent of all employees in Baden-Württemberg by 2030. Today, the health-care industry is already the leading employer, ahead of mechanical engineering, retailing and public administration. Local cluster initiatives have been established in 10 of the total of 12 regions in Baden-Württemberg. An above-average number of hospital companies and university medical centers are located in the cities of Stuttgart, Freiburg, Heidelberg, Karlsruhe and Mannheim as well as in the counties of Ortenau and Tübin- Investment Guide Baden-Württemberg gen. According to the McKinsey and IAW study noted above, medicine and long-term care have the potential to generate supplemental added value of between 15 billion Euro and 20 billion Euro annually. One reason for this growth is the expected rise in the number of individuals requiring long-term care from 225,000 today to about 300,000 by 2020. Information technology and telecommunications At around 232,000 employees, Baden-Württemberg’s share of the total number of people employed in the information and communications sector throughout Germany is more than 18 percent. The approximately 15,000 companies subject to sales tax generate revenues of around 42 billion Euro in Baden-Württemberg, making the state one of the world’s leading ICT locations. With 154,118 workers, Baden-Württemberg accounted for around 18 percent of those employed throughout Germany in the ICT industry in 2012. The ICT sector ranks third in the state in terms of total workforce, behind mechanical engineering and vehicle manufacturing. Global players like Sony, IBM, Hewlett-Packard and Siemens as well as successful small and midsized enterprises like GFT Technologies, transtec and Bechtle play a major role in the industry’s track record of international success and are securing the business location’s future. The establishment of new big/smart data technologies and the development of intercompany online retail platforms, cloud computing and social media have been the driving forces behind ICT trends in the last few years. The use of information and communications technology in all fields of human endeavor will continue to grow in the future, particularly in conjunction with digitization. New business models, which are significantly helping the state maintain its competitiveness as a business location, are currently emerging both in the ICT sector and in other application areas in conjunction with the further penetration of digital technologies into all spheres of life and the economy. The FZI Research Center for Information Technology in Karlsruhe is a Baden-Württemberg research asset that helps SMEs, in particular, to develop new products and adapt new technologies. This center provides Baden-Württemberg companies with support in many areas, including the enhancement of technology, security issues and service concepts. The telecommunications industry has set up regional centers in Stuttgart, Mannheim, Karlsruhe and Ulm. The sector has grown tremendously in the state since the telecommunications market was opened to competition. About 10 percent of telecommunications service providers based in Germany are headquartered in Baden-Württemberg. The major telecommunications equipment suppliers like Ericsson and Alcatel Lucent as well as all the major telecommunications network operators are represented in Baden-Württemberg. The development of business software and related services is one of Baden-Württemberg’s particular strengths. SAP, 43 the global leader in standard business software, is based in Walldorf, a town in north Baden near Heidelberg. In addition to this global player, many dynamic small and midsized enterprises offer high-tech products and services. About 5,000 software companies in Baden-Württemberg develop, supply and maintain the digital tools and components needed by modern production processes to make internationally competitive products. They specialize in such areas as the development of automation applications, logistics and machine-control systems as well as the programming of hardwired applications. Such programs and modules are used in mechanical engineering, automaking and electrical engineering. Critical success factors for the important branch of business software include intercompany dialogue, a direct relationship between the scientific and business communities and networks involving potential users. This is addressed by a wide range of initiatives, clusters and networks. Playing an important role in this regard is the statewide Baden-Württemberg Connected (bw:con) business network and the regional CyberForum cluster initiative, which has more than 1,000 members. The state’s new cross-industry Smart Home & Living Baden-Württemberg initiative has also been established. Lightweight design and construction The development of weight-saving components is being promoted, especially in the automotive industry and transport sector. Yet lightweight design also helps to conserve energy resources, reduce CO2 emissions and simplify design engineering and handling in the mechanical-engineering, production-technology, construction and power-plant-engineering sectors as well. Through the use of lighter materials and material-conserving approaches to construction, lightweight design delivers competitive advantages in manufacturing and subsequent usage. It is therefore regarded as a cross-sectoral goal of German industrial policy alongside electro-mobility and Industry 4.0. Since 2011, Baden-Württemberg has invested or budgeted well over 50 million Euro to boost the state as a lightweightdesign location. By establishing the Leichtbau BW GmbH state agency in 2013, Baden-Württemberg has created a statewide point of contact for the business and scientific communities as well as for established and emerging skilled specialists. The state agency handles marketing of Baden-Württemberg as a lightweight design location and coordination of research as well as expansion of the state’s qualification programs. On the basis of patent applications, the agency was able to identify in 2014 a significant number of lightweight-design activities in the following sectors: paper and wood, transport equipment, chemicals and machinery for energy applications. Between 30 percent and 40 percent of patent applications from throughout these sectors originated from Baden-Württemberg. That figure was between 20 percent and 30 percent for plastics and metals as well as for mechanical engineering. According to the study “The Value-Creation Potential of Lightweight Design and Its Signif- 44 Investment Guide Baden-Württemberg An incoming air unit for gas turbines. Source: Technologies Freudenberg Gruppe. were from Baden-Württemberg. According to the Fraunhofer Institute SCS in its study “Logistics in Baden-Württemberg,” the top three logistics companies in the state based on revenues generated in the 2013 fiscal year are: Weinheim-based trans-o-flex Schnell-Lieferdienst GmbH, Reutlingen-based Internationale Spedition Willi Betz and Heilbronn-based Spedition Karl Schmidt. Baden-Württemberg also boasts a concentration of intralogistics companies that is unique in the world. This segment provides technology and IT systems to handle intracompany logistics related to flows of material and information. New types of machine parts and new control technology are revolutionizing intracompany processes. The major players in the industry include providers of hoisting devices, conveyor and warehouse equipment, logistics software, identification technologies, services and complete systems. Baden-Württemberg is home to around 800 primarily midsized intralogistics companies, including several global market leaders. icance for Baden-Württemberg” released by the Fraunhofer Institute for System and Innovation Research (ISI) and other partners, 35 percent of major companies and 22 percent of SMEs in Germany use lightweight materials. Logistics and intralogistics Logistics is the most important cross-sectoral service industry in Germany after the information-technology and communications industry. This industry is a fundamental starting point for a smooth-running economy and for diversity in product ranges. The logistics industry has grown to become one of the largest sectors of the economy, boasting domestic-market revenues of 230 billion Euro (2013) and above-average growth rates. These are the findings of the study “Logistics in Baden-Württemberg” released by the Fraunhofer Center for Applied Research on Supply Chain Services. Given this performance, Germany is by far Europe’s leading logistics location, and Baden-Württemberg is one of the most important logistics markets in the country. With revenues of about 34 billion Euro and around 200,000 employees in 18,770 companies in the state, the core industry of logistics ranks behind mechanical engineering, automaking and the electronics industry in economic significance. The broader logistics sector employs more than 400,000 people. Small and midsized logistics companies provide industry with both the necessary transport services and added-value logistics concepts. Among the top 100 that the Fraunhofer Institute identified as part of a study on the German logistics sector, nine Many logistics companies in Baden-Württemberg are involved in industrial contract logistics—that is, they provide specialized, contract-defined systems used in the supply of materials, production and replacement parts to industry. This includes JIT and JIS services for freight and cargo. Some providers of logistics services are also active in the submarket of consumer-goods distribution and contract logistics. This covers logistics services related to procurement and distribution systems used in the consumer-goods industry and retailing. The statewide Logistics Network Baden-Württemberg (LogBW), serves as an important collaborative network for the state’s business community. LogBW connects the state’s logistics players within Europe and represents Baden-Württemberg as a logistics location at trade fairs in Germany and abroad. In addition, a large number of representatives from Baden-Württemberg’s business and scientific organizations have joined forces to form Intralogistik-Netzwerk in Baden-Württemberg e.V. This nonprofit organization pools activities to promote research and development as well as education in Baden-Württemberg with respect to the area of intralogistics. Baden-Württemberg international (bw-i), the state’s center of expertise for the internationalization of business, science and research, also supports the logistics industry through a wide range of activities. In one example of this work, bw-i regularly involves logistics companies in activities to facilitate collaborative ventures with potential partners from Germany and abroad. In addition, companies, institutions of higher learning and research organizations from Baden-Württemberg’s logistics sector participate in bw-i nonindustry-specific trade fairs, for example at the Hannover Messe or Expo Real. Investment Guide Baden-Württemberg Aerospace industry Baden-Württemberg is one of the European aerospace industry’s leading locations. Global leaders like Airbus Defence and Space, Diehl, Tesat Spacecom and Thales are based here. Leading suppliers from other segments of the mobility industry, including MAHLE Industrial Thermal Systems and ZF Friedrichshafen AG, have a track record of success in the aerospace industry as well. A cross-section of all the relevant fields of engineering and technology, including material development, microelectronics, communications and measurement technology and special manufacturing processes, are represented in the state. More than 60 companies belong to the aerospace industry. In Baden-Württemberg, these companies employ more than 14,000 people and generate revenues of more than 4.5 billion Euro. The Stuttgart Engineering Park (STEP), a technology park developed by L-Bank that offers more than 95,000 square meters of state-of-the-art office space is home to several companies in the industry. Networking high-performance research institutes with industryrelevant companies in Baden-Württemberg helps tap growth potential. Businesses located in the state play major roles in such international collaborative ventures as Airbus, Eurocopter and Eurofighter. In Stuttgart, the German Aerospace Center maintains a number of institutes of applicationfocused oriented research that explore such areas as renewable energies, combustion engineering, high-performance lasers, construction and structural research, and air- and spacecraft concepts. In Lampoldshausen, it operates Europe’s only test center for rocket engines. 45 ners from industry, the services sector, research and academia. Baden-Württemberg is a leading location for the electrical-engineering industry. More than 20 percent of the people employed in this sector throughout Germany work in the state. This wide-ranging electronics and electrical-engineering sector comprises the areas of industrial control systems, communications technology, components for electronics, microsystems and electrical devices. Global corporations like Siemens, Bosch and ABB conduct their research and development as well as manufacture in the state. Key mechatronics companies include Schuler and Festo. This cross-sectoral industry is dominated by midsized companies. In recent years, the electrical-engineering industry has seen the internationalization of business relationships increase and European markets merge. The state’s electrical-engineering industry encompasses around 1,000 companies with major production expertise, according Baden-Württemberg’s State Statistics Office. These companies employ more than 160,000 people and generate revenues in excess of 35 billion Euro. Media, culture and the creative industry Mechatronics The culture and creative industry is a broad-based sector of the economy consisting of 11 market segments: music, books, art, film, radio, performing arts, design, architecture, media, advertising, and software and games. In Baden-Württemberg, this sector is very well positioned compared with other states in Germany. The state has particular strengths in the design, architecture, and software and games segments. The cultural and creative industries are one of the strongest drivers of innovation for the knowledge-based information industry both in Germany and around the world. Mechatronic systems interlink mechanical, electrical and data-processing components. They complement and expand mechanical systems through the use of sensors and microcomputers, enabling products and systems with partial intelligence to be created. Landesnetzwerk Mechatronik BW e.V. is a continuously expanding alliance of high-performance part- In Baden-Württemberg, several segments of the cultural and creative industry have a long tradition. The spectrum ranges from Musikpark Mannheim over the state’s diverse publishing landscape, including books and magazines, the local book trade, successful fine artists and galleries, academies, design clusters and the architecture market to games developers. Today, this Creation of gross value added 4.6 0.5 18.2 Industry, excluding the construction industry Retail, hotel and restaurant industry and transportation Financing, rental and business service providers Construction industry Public- and private-sector service providers Agriculture, forestry and fishing 35.0 18.2 23.4 Share of sectors in gross value added, 2014, in %. Source: Working Group on National Accounts Among Germany’s States. 46 Investment Guide Baden-Württemberg industry is one of the leading sector’s of Baden-Württemberg’s economy. Nearly 7 percent of companies operate and 4 percent of employees in Baden-Württemberg work in the culture and creative industry. The Netzwerk Kreativwirtschaft Baden-Württemberg was established in order to interlink the 11 segments of the state’s culture and creative industry even more. Under the leadership of the Media and Film Society of Baden-Württemberg, more than 50 partners and 100 backers have joined forces in this network of the cultural, creative and IT industries. They offer a broad range of events, including networking opportunities, workshops and seed money. tions register the most industry-relevant patents in Germany. The diagnostics division of the pharmaceuticals corporation Roche is located in Mannheim. According to a European Union analysis titled “European Cluster Observatory,” the Freiburg, Karlsruhe and Tübingen regions are among the most important medical-technology clusters in the EU. Biotechnology and medical technology profit tremendously from each other, thanks in part to the assistance provided by the state agency, BIOPRO Baden-Württemberg GmbH. Synergies form the basis for innovative research and development. Biomedical technology stands for fast, targeted progress in medical research. Microsystems and nanotechnology Medical technology Baden-Württemberg is one of Germany’s and Europe’s leading medical-technology locations. The companies in the state generate about 23 percent of total industry revenues in Germany, at 4.2 billion Euro. This total ranks BadenWürttemberg second among Germany’s 16 states in terms of revenues. The state also has the largest share of employees working in the German medical-technology market, at more than 19 percent. More than 45,000 employees work for nearly 2,500 companies in the industry’s core segments. Overall, about one-fifth of all medical-technology capacity in Germany is concentrated in Baden-Württemberg. The strength of Baden-Württemberg’s manufacturers is their innovativeness. They generate more than 50 percent of their revenues with products that have been in the marketplace for less than three years. The sector’s export volume of nearly 3 billion Euro demonstrates the global strength of medical technology made in Baden-Württemberg. Many highly respected research institutes in the state are involved in medical technology. These include the Karlsruhe Institute of Technology as well as several Fraunhofer Institutes, Max Planck Institutes, Innovationsallianz Baden-Württemberg institutes and research facilities at institutions of higher learning. A total of 80 institutes and research and development centers conduct work in the area of medical technology. Thanks to the state’s exceptional research infrastructure, the highly regarded medical and technical departments at institutions of higher learning, the variety of medical centers and the proximity to numerous companies in related high-tech industries, Baden-Württemberg offers first-class business conditions for medical-technology companies. The town of Tuttlingen has the world’s highest concentration of endoscopy and surgicalinstrument companies. Global leaders like Aesculap, Karl Storz, Gambro and Erbe are based here. Medical-technology companies are concentrated in the regional clusters of the Northern Black Forest, Schwarzwald-Baar-Heuberg, Neckar-Alb and Rhine-Neckar-Triangle. Baden-Württemberg has a unique concentration of relevant user industries for microsystems (MST). These include the automotive industry, life sciences, medical technology, mechanical engineering and production engineering, and automation and sensor technology. Microsystems engineering enables components to be made smaller and more efficient. This technology is primarily represented by highly specialized research and development organizations as well as many innovative companies working both in this field of technology as well as in an array of different application areas. Roughly 25 percent of German companies actively involved in this key technology are based in Baden-Württemberg. These 3,600 companies generate more than one-quarter of the entire industry’s revenues. The sector employs about 75,000 people in the state and generates revenues of more than 13 billion Euro. About 14 percent of patents issued for microsystem technology worldwide originate from members of the MicroTEC Südwest cluster. This cluster in Baden-Württemberg encompasses 360 companies, institutes, institutions of higher learning and research organizations with more than 1,200 scientists. According to the MicroTEC Südwest fact sheet, 1,550 MST companies and MST users are potentially represented in Baden-Württemberg, of which nearly 93 percent are small and midsized enterprises. The cluster focuses on the regions of Karlsruhe, Stuttgart, Villingen-Schwenningen and Freiburg. With such global players as Bosch, Roche Diagnostics, Daimler, Festo, Zeiss, SICK, Endress+Hauser and Balluff, as well as many innovative small and midsized enterprises, the first-class cluster MicroTEC Südwest forms a cross-industry base for future pioneering innovations and new growth. Nanotechnology has also produced growth among companies in Baden-Württemberg. About 120 companies are involved in nanoelectronics, nanobiotechnology, nanoanalysis, MEMS (microelectro-mechanical systems) and similar fields. Baden-Württemberg has assumed a leading position among Germany’s states in both areas, microsystems and nanotechnologies. New materials and surfaces The Rhine-Neckar metropolitan region is a leading life-sciences location. The German Cancer Research Center and the chemicals corporation BASF are based here; both organiza- A cross-sector topical area, new materials and surface characteristics, is becoming increasingly important for many technol- Investment Guide Baden-Württemberg ogy segments. The development of new materials and surfaces as well as of the related technologies helps the industries concerned improve their competitive positions. The AFBW – Allianz Faserbasierte Werkstoffe Baden-Württemberg network brings together companies, research institutes, business organizations and institutions of higher learning to address the interdisciplinary technology of fiber-based materials. These materials are a fundamental driver of innovations in numerous industries and at all levels of value creation, from thermoplastic elastomers to functionalized plastics. Pharmaceutical and chemical industries The pharmaceutical industry is particularly well represented in Baden-Württemberg. It is a leader in Germany both in terms of revenue volume and employment, with a share of more than 20 percent in each case. Every fourth job in Germany’s pharmaceutical industry and every third of the 30 pharmaceutical locations in Germany with the highest employment rates are located in the state. The research infrastructure in companies, institutions of higher learning and external research institutes is one factor in the industry’s power to innovate. Especially midsized companies continue to tap market niches through a combination of specialist know-how, a high degree of innovative power and enormous flexibility. The pharmaceutical industry employs about 40,000 people in the state, or about one-fifth of all industry employees in Germany. On the manufacturing side, there are about 140 companies that produce pharmaceutical products. The number of companies represented in Baden-Württemberg is equivalent to more than one-quarter of all German pharmaceuticals businesses. Thanks to the good business conditions available to the health-care industry in the state, the pharmaceutical industry has ideal sales and growth potential in Baden-Württemberg—a factor that prompts international companies like Becton Dickinson to set up operations in the state. Other leading pharmaceutical companies are based here, including Roche Germany, ratiopharm GmbH, Boehringer Ingelheim Pharma GmbH, Weleda AG and Rentschler Biotechnologie GmbH. Boehringer Ingelheim Pharma GmbH operates its largest international research and development center in Biberach. The state is also home to Germany’s largest pharmaceutical service provider, Pharmexx. In addition, such natural-remedy companies as Schwabe, DHU and HEEL are based in Baden-Württemberg. The world’s largest pharmaceutical companies, Pfizer and GlaxoSmithKline, conduct research and manufacture products in Baden-Württemberg. Such industry heavyweights as Actelion, Novartis, Sanofi and Takeda have branches in the state as well. Baden-Württemberg’s pharmaceutical industry also includes a large number of small companies and micro-enterprises. More than 55 percent of pharmaceutical companies in the state have fewer than 100 employees. Nine out of 10 employ up to 500 people and eight out of 10 up to 300. This exceptional research landscape provides many benefits and an array of collabora- 47 HB TECHNOLOGIES AG, TÜBINGEN: MANUFACTURING PEPTIDES ON AN INDUSTRIAL SCALE Medical science is continuously making progress as far as treating tumors is concerned. In one reflection of this, peptides—small proteins—are also eminently suitable for use as therapeutic agents to combat tumors. As part of immunotherapy treatment, patients are inoculated with individually adapted peptides. The Tübingen-based biotechnology company HB Technologies has been performing valuable development work on the automatic production of peptides—peptide synthesis—since the beginning of the 1990s. The team headed by founder and board member Dr. Steffen Hüttner develops and produces peptide-synthesis equipment according to the principle of solid-phase synthesis. The company has stuck to this strategy since it was founded in 1992: Business activity focuses on developing software solutions for biotechnology and medical-technology applications. The Tübingen-based company was awarded the 2014 Baden-Württemberg Innovation Award for its MultiPep CF synthesizer. This device enables the quality of peptide synthesis to be measured in real time. In addition, peptide yield and purity were further increased in comparison with previous devices. The automated and targeted type of reaction-sequence analysis improves the speed of synthesis and, above all, enhances the quality of the products. The company takes a two-pronged approach as far as engineering and production are concerned: While the parent company fills the product pipeline with innovations, the wholly owned subsidiary, INTAVIS Bioanalytical Instruments AG, handles serial production and sales. “We export around 70 percent of the equipment we produce all around the world,” Hüttner explains. “Our product lines are augmented by custom solutions for specific users.” HB Technologies measures itself against other players in the global market. “We are one of around 10 manufacturers of peptidesynthesis equipment that compete in the global market.” While sales and distribution are strongly international, research work is performed primarily in Baden-Württemberg. As a result, HB Technologies partners with, for example, Mannheim University of Applied Sciences. The plan is to continue this approach in coming years. “We want to enhance and expand our product range,” Hüttner says in outlining the company’s goals for the future. tion options to small and midsized enterprises in particular. Baden-Württemberg offers a dynamic cluster and network environment that generates ideas and momentum for companies. Baden-Württemberg’s attractive business-location profile for pharmaceutical companies is rounded out by industry-specific professional support services delivered by business-development programs. 48 Investment Guide Baden-Württemberg POLYTEC GMBH, WALDBRONN: MEASURING MICROVIBRATIONS POLYTEC, based in Waldbronn near Karlsruhe, had its start at the end of the 1960s as a laser-technology pioneer. Today, the company, which employs around 400 people, is the global market leader in laser-based vibration-measurement technology. It won the 2014 Innovation Award of the state of Baden-Württemberg for its increasingly higher-resolution measurement systems. This technology is used especially in vehicle manufacturing, the aerospace industry and microsystems engineering. “Currently, the issue of autonomous driving is one of our and our customers’ major focal points,” relates Dr. Dietmar Gnaß, CEO of POLYTEC. “Sensors with laser technology are also used in smartphones. They realign the display depending on how the device is held.” The basic requirement that the various industries have when they approach POLYTEC is similar: They need to measure vibrations in microsystems. For that reason, the company develops standard instruments that can be custom modified upon request. Regular customers come from BadenWürttemberg, especially from the Stuttgart metropolitan region. But POLYTEC is also a global player and exports its products to the United States as well as to Japan and China. Research and development take place primarily at the company’s headquarters. There, the founding member of Photonics BW, the innovation network for optical technologies, works with research institutes like KIT and Fraunhofer IOSB in Karlsruhe, the Institute of Applied Optics in Stuttgart and Fraunhofer IPM in Freiburg. These network partners are also jointly involved in research projects of the Federal Ministry for Economic Affairs and Energy. So there’s no end in sight for POLYTEC in terms of challenges, assignments and orders. It’s a good thing then that the company has been able to more than adequately cover its needs for skilled specialists so far. “We recruit a major portion of our new employees from within the Mannheim-Heidelberg, Freiburg and Stuttgart catchment areas,” Dietmar Gnaß explains. Computer scientists, mechanical engineers and physicists, in particular, are among those who commute to Waldbronn. That means dependency on a reliable transportation infrastructure is correspondingly high. “As a midsized company based in a rural area, we rely on traffic routes that function properly,” Gnaß emphasizes. The chemical industry plays a major role in some locations in Baden-Württemberg. Among German states, Baden-Württemberg ranks fourth in terms of revenue generated by the chemical industry. With nearly 800 companies and about 120,000 employees, Baden-Württemberg is one of Germany’s leading chemical-industry locations. With a total of about 10 percent in total revenues, the chemical industry is one of the three-largest manufacturing-related industries in Baden-Württemberg. The regional cluster focal point is the Rhine-Neckar region. This is where Reckitt Benckiser’s German headquarters is located as well as several of its plants. Other chemical companies are located in the Freiburg-High Rhine region, the Stuttgart metropolitan area and the Ulm-Biberach region. The chemical industry in Baden-Württemberg primarily focuses on pharmaceuticals, personal hygiene, detergents, lacquers, paint and building-protection products. Photonics More than 300 companies that specialize in the production of optical and photographic equipment employ more than 8,000 people and generate revenues of nearly 1.5 billion Euro. Companies from such industries as mechanical engineering; production and process technology; measurement, control and regulation technology, and medical technology are heavily involved in optical technology as well. The photonics cluster includes such well-known companies as the optics corporation Carl Zeiss, the toolmaker and laser specialist Trumpf, the sensor manufacturer SICK, the endoscope producers Karl Storz and Richard Wolf, and the measurement-device maker Polytec. All of these companies are market leaders in their respective fields. This industry in Baden-Württemberg also includes numerous small and midsized enterprises that offer innovative high-tech optical and optoelectronic products and services in international markets. In terms of customers, the state has the highest concentration of potential users of optical technologies in Germany: the automotive industry, mechanical engineering, renewable energies and environmental technology as well as medical technology and biotechnology. A subsector of the photonics industry involves measurement, control and regulation technology. The centers of this sector are located in the High Rhine and Heilbronn-Franconia regions. Many measurement-technology manufacturers are located in the High Rhine region because of its proximity to the chemical-industry center of Basel and the chemical plants in the High Rhine region. The chemical and pharmaceutical industries are the sector’s main customers. Production technology and mechanical engineering Source: Polytec GmbH. With more than 300,000 employees, mechanical engineering— the core of the capital goods industry—is the largest industrial sector in Baden-Württemberg in terms of employment. With revenues of approximately 71 billion Euro, the state accounts Investment Guide Baden-Württemberg 49 for nearly one-third of the revenues generated by Germany’s mechanical-engineering sector. Around 1,500 companies in Baden-Württemberg operate in the mechanical- and plantengineering sector, which is equivalent to 32 percent of the entire industry in Germany. WEBO WERKZEUGBAU OBERSCHWABEN GMBH: A HIDDEN CHAMPION WITHIN SEVEN YEARS One-third of Germany’s 30 largest mechanical-engineering companies alone come from Baden-Württemberg. In addition to such industry leaders as ZF Friedrichshafen, Heidelberger Druckmaschinen, Voith, Rolls-Royce Power Systems, Trumpf and Schuler, many small and midsized enterprises that compete successfully throughout the world are based in the state. In addition to the Stuttgart metropolitan area, production engineering is concentrated in clusters located in the Lake Constance-Upper Swabia, Danube-Iller, Neckar-Alb, Rhine-Neckar and southern High Rhine regions. The city of Esslingen outside Stuttgart is Germany’s largest mechanical-engineering location with approximately 20,000 employees. Toolmaking is the focal point here. Such well-known companies as Index Werke, Eberspächer, Gebrüder Heller, Metabo and Thyssen-Krupp Aufzüge are based in Esslingen County or in neighboring Stuttgart. Mechanical engineering is a midsized enterprise business. Fifty percent of employees work in companies with fewer than 500 workers. Sixty percent of companies have fewer than 100 employees. “There isn’t a manufacturer of automatic transmissions any-where in the world that doesn’t work with us.” Anyone who can assert that claim after just seven years of owning an independent business, must have done many things right. And experienced a few lucky breaks in dicey situations. One such person is Axel Norbert Wittig, CEO of WEBO Werkzeugbau Oberschwaben. The company, based in Amtzell near Ravensburg, has found its niche in the sheet-metal-forming business. It develops transmission components and today manufactures forming tools for disk carriers, the most difficult and expensive transmission components to produce, for the global market. “The idea of technically enhancing disk production had been on my mind for a long time,” Wittig relates. After his previous employer had been acquired by a competitor in 2008, Wittig took the plunge into self-employment with four of his colleagues who left the employer with him. The team initially worked at two workstations in Wittig’s basement at home. “Disk carriers have to be perfectly round for them to rotate cleanly,” the company founder explains. “This is where we significantly improved the rolling process in the forming tool, reducing development and production lead times considerably. Metal-processing is another mainstay of the manufacturing industry in Baden-Württemberg. More than 1,500 companies are involved in producing and processing metal as well as manufacturing metal products. The export share is about 36 percent. Most companies are located in the major metropolitan areas of the state. But such counties as Rastatt—with its metalprocessing cluster—as well as Böblingen and Tuttlingen are preferred business locations. Satellite navigation In Baden-Württemberg, the main users and buyers of standard satellite navigation systems come from the aerospace industry and, increasingly, from the automotive industry. Of particular relevance are also companies that have practical applications for satellite navigation technology. Satellite navigation and mobile IT are key technologies and focal points of the state’s ICT sector. Sustainable mobility concepts and logistics cannot, for instance, function without these fundamental technologies. Security technology Security technology is a feature of several industries in Baden-Württemberg and is rooted in various disciplines. The broad-based and heterogeneous nature of security technologies is evidenced by the fact that they incorporate sensor technology as well as identification- and access-control technologies plus microsystems engineering, IT security and telecommunications. Security technology is a subsector of the measurement-, control- and regulation-technology cluster. It is largely con- Such innovations enabled to Wittig to land a contract worth millions in the United States right at the start . And as the banking crisis hit in 2008, Daimler’s award of a contract for the series production of A-Class and B-Class gearshifts came at just the right time. “Luckily, we have enjoyed good professional reputations in the market. This enabled us to gain customers and survive the start-up phase,” Wittig recounts. Since that point, WEBO’s sales and personnel have increased by around 30 percent a year. That has required investing in infrastructure right from the beginning. The basement at home rapidly became too small, so a new greenfield factory building, including machinery, was needed. Wittig and his colleagues found a regional savings bank ready to listen despite the crisis. In financing the building, WEBO was also able to take advantage of funding provided by L-Bank’s development program called Rural Areas. To date, Wittig and his colleagues have filed 12 patent applications and 10 other applications are currently being processed. Growth in Upper Swabia continues. centrated in the regions of Hohenlohe-Schwäbisch Hall, Karlsruhe, Friedrichshafen, Freiburg and Black Forest–BaarHeuberg. Freiburg and Karlsruhe are the scientific and technological centers of the Future Urban Security innovation cluster. This cluster has brought together six Fraunhofer institutes; the universities of Freiburg, Karlsruhe, Stuttgart and Tübingen; and the Hahn Schickard Institute in Villingen-Schwenningen as well as many companies and government agencies in order to form Germany’s strongest alliance of application-focused security research. 50 Investment Guide Baden-Württemberg Measurement technology for energy systems. Source: Endress+Hauser Messtechnik GmbH+Co. KG. Environmental technology Germany is the largest exporter of environmental technology products. German manufacturers have a global market share of 15 percent and an export share of 37 percent. A significant share of exports can be attributed to equipment designed to harness renewable energies like wind and solar power plants. Here, Germany has a global market share of 13.2 percent and is ranked second behind China. Baden-Württemberg has a global market share of more than 2.5 percent and an export share of 31 percent in environmental-technology products. Around 900 companies operating in the environmentaltechnology sector are located in Baden-Württemberg. The industry in the state employs more than 15,000 people and generates revenues of more than 3.6 billion Euro. As a result of the overlapping areas it shares with Baden-Württemberg’s leading industries—automaking, mechanical engineering, electrical engineering, precision engineering and optics—the sector represents a key technology with an interdisciplinary link to micro- and nanotechnology that is producing new applications and products. Because the state has one of the world’s highest concentrations of industry, with more than 50,000 industrial companies, Baden-Württemberg has a significant sales and procurement market for environmental-technology products and processes. Given its high concentration of research institutes and companies, the state plays a leading role in the environmentaltechnology industry in Germany. A total of around 90 institutes conduct environmental research in the state. The leading organizations include the Karlsruhe Institute of Technology (KIT), various Fraunhofer institutes and other nonuniversity research organizations. In addition to the many small, highly innovative providers of environmental technology, numerous German and international corporations are based in Baden-Württemberg, including Siemens, ABB and GEA Wiegand. The state is also an important location for environmental biotechnology companies. The companies based in the state include IBL Umwelt und Biotechnik GmbH, a Heidelberg-based specialist and leading provider of services to prevent and eliminate environmental damage, and Wehrle Werk AG, an environmental plant-engineering company in Emmendingen. The Landesagentur für Umwelttechnik und Ressourceneffizienz (State Agency for Environmental technology and Resource Efficiency) was established in 2011 as part of the Umwelttechnik BW – Technologie- und Innovationszentrum Umwelttechnik und Ressourceneffizienz Baden-Württemberg initiative. Its objective is to network all relevant information, activities and stakeholders from the business, scientific and political communities in Baden-Württemberg. Investment Guide Baden-Württemberg Knowledge economy and company-related services Statistics Office is forecasting real GDP growth of 2.3 percent for the full year of 2015. The service industry in Baden-Württemberg has grown dramatically in recent decades. The source of this growth can be found in the state’s industrial structure. Premium services like business consulting and marketing are in demand in places that conduct research, provide financing, develop products and engage in marketing. Service providers have a close relationship with industry and conduct important interdisciplinary functions. About 45,000 companies in the state are active in the service industry. They can draw on a highly qualified pool of potential employees. In total, more than 400,000 people work in a wide range of different service-industry segments. These segments include more than 16,000 firms offering services in the areas of law, taxation and business consulting as well as market and opinion-research firms. About 12,000 architecture and engineering firms develop and carry out projects for clients in Baden-Württemberg and all parts of the world. Of all the German states, Baden-Württemberg has the largest share of value creation in the manufacturing industry. Nearly one-third of economic output is produced in this area, while the national average is just over one-fifth. Despite the slow economic recovery in the eurozone, the major sectors of industry in Baden-Württemberg continued to grow in 2014. Companies are also optimistic about 2015. They anticipate demand in Germany will have held up well and the export business will have increased. The economic recovery in key export markets benefited Baden-Württemberg’s industry in 2014. Revenues from foreign trade rose by 7.9 percent. In Germany, sales revenues increased moderately by 1 percent following the declines of the previous two years. Specifically, overall sales revenues in mechanical engineering increased by 4.1 percent in 2014, while export revenues increased by 4.9 percent. Vehicle-manufacturing sales revenues increased overall by 10.3 percent and export revenues by as much as 14.2 percent. As a result, these two leading sectors accounted for around 80 percent of revenue growth in the manufacturing industry in 2014. The pharmaceutical industry, in contrast, registered overall revenue growth of just 0.6 percent, while its international sales declined by 3.9 percent. 3.3 ECONOMIC PERFORMANCE AND DEVELOPMENT Business performance and industry developments Baden-Württemberg’s economic output grew more substantially in 2014 than the German average. The state’s gross domestic product (GDP) increased by 2.4 percent in real terms, while the German economy as a whole only grew by 1.6 percent. This economic dynamism, however, increased over the course of the year and provided the economy with major momentum for 2015. After two years of weak growth in 2012 and 2013 (each 0.3 percent), particularly Baden-Württemberg’s industry was able to fully exploit its strengths in the global marketplace. The State The export of goods is a key cornerstone of Baden-Württemberg’s economy. At 41.4 percent, its share of GDP in 2014 was the highest among Germany’s noncity states. Baden-Württemberg exported a total of around 181 billion Euro worth of goods and services, setting a new record thanks to an increase of 4.7 percent compared with the previous year. Baden-Württemberg was thus Germany’s leading exporter in terms of export sales revenues. The state is particularly synonymous with premi- Economic growth in Baden-Württemberg Baden-Württemberg 7.5 Germany 6.1 3.7 0.3 1.2 3.9 4.1 3.3 0.6 0.7 4.8 3.6 2.4 0.3 1.1 0.3 0.4 0.3 0.1 2012 2013 1.6 2.3 –0.3 –0.7 –5.6 –9.0 2003 2004 2005 2006 2007 51 2008 2009 2010 2011 Changes in gross national product compared with the previous year, price adjusted, chain-linked, in %. Sources: Working Group on National Accounts among Germany’s States, German Bundesbank, Baden-Württemberg Statistical Office. 2014 Forecast 2015 52 Investment Guide Baden-Württemberg um-quality vehicles and machinery, its most sought-after export products. These two product categories alone accounted for around 46 percent of Baden-Württemberg’s total exports—and for more than one-fifth of all German exports of these products. While vehicle exports grew substantially by 12.5 percent in 2014, machinery sales abroad remained almost unchanged compared with 2013. Another growth sector was pharmaceutical products, exports of which increased by 13.4 percent in 2014. The construction industry accounts for about 5 percent of Baden-Württemberg’s economic output. Its employees make up about 5 percent of the state’s working population. In 2014, the construction industry remained stable, with total revenues rising by 5.6 percent. Baden-Württemberg’s crafts and trades industry contributed strongly to employment and economic output through its involvement in the construction, manufacturing and services sectors. Businesses in the crafts and trades industry employ more than 700,000 out of the working population of approximately 6 million and generated revenues of well over 83 billion Euro. Retail in Baden-Württemberg benefited in 2014 from positive consumer sentiment and generated good revenues. Of the three major trade segments—wholesaling, retailing and auto sales— retailing, at an increase of just 1.2 percent, trailed behind the other two segments (both +2.1 percent). The hospitality industry includes the hotel and restaurant segments. In 2014, revenues in the restaurant segment grew by 0.9 percent in real terms compared with the previous year, and in the hotel segment by 2.0 percent. And the stable business situation had a positive effect on employment: In 2014, the number of people employed in the hotel segment rose 5.2 percent above the previous year’s level. In the restaurant trade, this increase was 2.3 percent Foreign trade partners Around half of Baden-Württemberg’s exports go to other countries in the European Union. Exports to these markets grew substantially in 2014, growing by 4.2 percent after two weak years. There was particularly strong demand for goods from BadenWürttemberg from non-eurozone countries, which bought around one-third of all exported goods. In 2014, the leading customers in the EU were France, the Netherlands, the United Kingdom and Austria. These four countries combined bought one-quarter of Baden-Württemberg’s exported goods. As an individual country, Switzerland, the state’s southern neighbor, is now the fourth most important market for Baden-Württemberg’s exports (over 7 percent) behind the United States, China and France. The United States purchased nearly 12 percent of Baden-Württemberg’s exports in 2014, while China and France each purchased almost 8 percent. Exports to the United States (+13.8 percent) and to China (+14.3 percent) in particular rose sharply in 2014. In contrast, exports to Russia (–15.4 percent) took a nosedive, and Turkey (–5.0 percent) declined in importance as a market for BadenWürttemberg’s companies. Job market The working population in Baden-Württemberg set a new record, with 6 million people in 2014. At the same time, the average annual unemployment rate—4 percent—was again below the previous year’s figure. Of all the German states, only Bavaria had a lower unemployment rate, In particular, Baden-Württemberg has already achieved success in integrating younger and older unemployed workers into the job market. The youth unemployment rate (2.9 percent) and that for older people (5.1 percent) is therefore lower than in all other states in Germany. At nearly 4.3 million, this growth in employment in 2014 was attributed, in particular, to a 2.2 percent increase in regular employment (jobs requiring payment into Germany’s social insurance programs). This category represents 71 percent of the working population. Employment growth continued in the first quarter of 2015 as well. In September 2015, Baden-Württemberg’s unemployment rate was 3.8 percent. Investment Guide Baden-Württemberg 53 4 INVESTMENT-SUPPORT PROGRAMS FOR COMPANIES @ Baden-Württemberg is one of the only states in Germany that offers such a broad and effective array of investment-support instruments and advisory services. L-Bank is a key player as far as these investment-support activities are concerned. Working with other state institutions and companies’ own relationship banks, it acts as the central point of contact for inquiries sent from both inside and outside Germany. Its product portfolio offers something for every need. 4.1 CONTACT PARTNERS Baden-Württemberg International (bw-i) is the state’s business-development agency and therefore serves as the central point of contact for all inquiries from domestic and foreign investors and companies interested in BadenWürttemberg. Acting as a point of contact for initiating international business cooperation, bw-i @ helps Baden-Württemberg companies enter markets around the world; @ champions Baden-Württemberg as a location for business, science, research and higher education at home and abroad; @ mentors international investors with their corporate investments in the state; and @ carries out recruiting projects in selected target countries. The House of Economics in Stuttgart. Source: Baden-Württemberg Ministry of Finance and Economics. In short, bw-i is the face of Baden-Württemberg in its relationships with the rest of the world and looks after companies and investors. w-punkt, an initiative of the Baden-Württemberg Ministry of Finance and Economics, supports companies, start-up entrepreneurs and investors by acting as a comprehensive guide to the state’s business-development and investment-assistance landscape. The range of information offered by the initiative includes financial assistance, consulting services and other business-development issues. The w-punkt Internet portal, www.w-punkt.de, includes the names of local, regional and statewide contact persons who can answer questions about business development and investment assistance. All of the state’s programs for investors and companies are designed to send one message: Baden-Württemberg offers support to those interested in doing business in the state and provides a variety of financial-support options to augment business-related expertise. 54 Investment Guide Baden-Württemberg Business-support programs Key contacts for investors: Baden-Württemberg International – Gesellschaft für internationale wirtschaftliche und wissenschaftliche Zusammenarbeit mbH (bw-i) advises companies and investors on all issues regarding Baden-Württemberg as a business location. Phone: +49 711 22787-0 E-mail: [email protected] Internet: www.bw-i.de, www.bw-invest.de Baden-Württemberg Ministry of Finance and Economics, Department of General Policies and Foreign Trade Phone: +49 711 123-2096 E-mail: [email protected] Guide to investment-support programs provided by the state of Baden-Württemberg w-punkt Haus der Wirtschaft Willi-Bleicher-Str. 19 70174 Stuttgart Germany Phone: +49 1801 072004 E-mail: [email protected] Internet: http://wpunkt.de In addition: @ Investment-support officials in municipal authorities @ Business-development offices in counties and regional business-promotion initiatives @ Contact persons in chambers of industry and commerce @ Contact persons in chambers of crafts and trades Business location questions Baden-Württemberg is one of Europe’s most attractive business locations. By creating a favorable business environment, the state has succeeded in preserving and expanding its aboveaverage level of employment and standard of living. Many experts, studies and key figures attest to the exceptional business successes that people and companies have achieved in the state. Employers in Baden-Württemberg also rate their business location highly. They are particularly impressed by such business-related factors as the state’s: @ Proximity to customers @ Proximity to research and technology centers @ The working relationship with government agencies @ National transportation connections @ Proximity to suppliers @ The availability of commercial space @ The quality of the skilled labor pool @ The state’s attractiveness to employees The Ministry of Finance and Economics is the central point of contact for all individual business-support programs in Baden-Württemberg. It coordinates the full range of businesssupport programs offered by the state. The state’s business-development institutions—L-Bank, Bürgschaftsbank Baden-Württemberg and mbg Mittelständische Beteiligungsgesellschaft Baden-Württemberg—handle the transacting associated with the financial-assistance programs. Additional organizations oversee a range of other investment-support instruments. The investment-support programs offered by the Ministry of Finance and Economics can be broken down into the following categories: general investment-support programs, foreign trade, construction and housing, vocational training, monument-preservation support, the services industry, energy, business start-ups and succession, innovation and technology, regional development, restoration and development, and tourism. The Ministry of Finance and Economics is available to meet with companies and investors to discuss ideas. Where crossgovernmental projects are involved, the ministry coordinates the working relationships with other participating ministries. The state also provides strategic consulting support to existing companies, assisting these companies on economic, financial, technical and organizational matters related to business management as well as on the adjustment process involving the new competitive environment that is being experienced by the craft trades, midsized industrial enterprises and service providers. Consulting and coaching services are provided on such special issues as company succession, company transfer, the environment, the EU, exports, innovation, demographic change and reduced energy consumption. One major economic issue facing the state is the constant replenishment of the business population. The financial support provided to business start-ups and assistance in matters of company succession help ensure Baden-Württemberg’s economy remains flexible and dynamic. With the strategic and financial support provided by the Baden-Württemberg Ministry of Finance and Economics’ Initiative for Business Start-Ups and Company Succession (ifex), the state has developed a diversified range of information, qualification and consulting services. Numerous trade associations, business-development organizations and private initiatives have contributed innovative ideas to this new start-up culture. They complement the core assistance provided by chambers of commerce and investment-support banks and generally have a regional, industry or target-group focus. The 12 chambers of industry and commerce and the eight chambers of crafts and trades play a major role, acting as central points of contact. With the comprehensive business start-up support they offer, all of Baden-Württemberg’s chambers serve as one-stop shops. This means as many business start-up steps as possible can be completed at a single location. They also offer an extensive range of information as well as consulting and qualification services. Investment Guide Baden-Württemberg Two major challenges for companies: generational transition and climate change Contacts for business-related questions: In particular, passing the baton on to the next generation of company leaders poses a major challenge the state has to address. About 20,000 Baden-Württemberg companies employing more than 300,000 people will have to address the issue of business succession over the next four years. Increasingly, successors must be sought outside business-owner families. At the turn of the millennium, about three-quarters of successors came from families that ran the businesses. Today, however, that figure has dropped to about 40 percent, recent studies show. Baden-Württemberg: Connected (bwcon) Phone: +49 711 90715-500 E-mail: [email protected] Internet: www.bwcon.de In addition to the numerous cases of business succession that family-owned companies face, the global innovation competition is a key issue for many businesses. Baden-Württemberg’s economy has been successful on the global market for decades by providing technically excellent products, processes and services. To create competitive advantages, companies need to continuously innovate and then successfully launch their innovations. This requires a major commitment to research and development. The aim is to effectively and quickly apply technological knowledge in new, marketable solutions in all industries and business segments. To maintain its leadership in terms of patent applications within Germany, Baden Württemberg has a contact person at the Patent Information Center in the Stuttgart Regional Authority who is available to answer any questions about this issue. BWHM Beratungs- und Wirtschaftsförderungsgesellschaft für Handwerk und Mittelstand mbH Phone: +49 711 263709-0 E-mail: [email protected] Internet: www.handwerk-bw.de For years, the technology policies of Baden-Württemberg have been characterized by a close working relationship between the academic, business and political communities. Innovations are created within a network of partners. The basis for such advances is a culture of innovation that, among other aspects, improves companies’ willingness and ability to innovate, strengthens the population’s interest in technology and helps remove barriers to innovation. One condition necessary for innovation is the existence of highly productive research organizations and institutes that act as sources of technology to produce new transferable knowledge for and in partnership with the business community. As a result, one of the state government’s main responsibilities is to sustain Baden-Württemberg’s highly effective network of business-related research institutes and to facilitate the effective transfer of technology, particularly in small and midsized enterprises. In addition, the growing complexity of technical problem-solving and the general realization that partnerships are both stronger and more efficient make it necessary to intensify research relationships, including within the context of joint research activities or through the formation of networks of expertise among universities, research organizations and companies. This extends all the way to technology- and sector-focused clusters that also include partners along the entire value chain. Businessdevelopment officials in Baden-Württemberg’s counties and in the state’s regional investment-support initiatives stand ready to advise companies, people seeking to start their own companies and investors. 55 RKW Baden-Württemberg GmbH Phone: +49 711 22998-0 E-mail: [email protected] Internet: www.rkw-bw.de Gesellschaft für Beratungen und Beteiligungen mbH (GfBB) Phone: +49 721 133-7330 E-mail: [email protected] Internet: www.gfbb-ka.de Steinbeis Consulting Center Business Coaching Phone +49 711 1839-5 E-mail: [email protected] Internet: www.stw.de/transfer Stuttgart Regional Authority – Patent Information Center Phone: +49 711 123-2558 E-mail: [email protected] Internet: www.patente-stuttgart.de In addition: @ Investment-support officials in municipal authorities @ Regional investment-support officials in Baden-Württemberg’s counties and in regional investment assistance initiatives @ Contact persons in chambers of industry and commerce @ Contact persons in chambers of crafts and trades @ Contact persons in trade associations @ Contact persons in other initiatives The Steinbeis Europe Center helps small and midsized companies, in particular, gain access to the European Union’s research and technology programs. It also assists them in their search for business partners and serves as a source of information to answer all questions involving European technology transfer. The Steinbeis Europe Center is also the consortium partner for the Enterprise-Europe-Network Baden-Württemberg. The major challenges facing us today include climate change and the increasing shortage of such important natural resources as oil, coal and natural gas. These challenges are forcing companies to make substantial changes. The shortage of key nat- Investment Guide Baden-Württemberg Loan-guarantee program InnovFin Loan guarantees L-EA fund for small and midsized enterprises 4 Seed-money fund Baden-Württemberg 4 Mezzanine financing (Mezzafin) ERP capital for business start-ups (KfW) Equity and equity-type financing Silent participation (MBG) Investment financing Liquidity loans Technology financing 4 Innovation financing 4 Energy-efficiency financing SME 4 Short- and mid-range financing Regional financing 4 Growth financing Start-up financing Mid- and long-range financing Start-up financing 80 Programs Investmentsupport instruments Rural Development Program (ELR) 56 4 4 Start-ups Acquisitions/ investment 4 Company development 4 4 4 4 4 4 4 ural resources coupled with recent volatile global demand and the temporarily increasing supply resulting from new extraction methods entail commodity price fluctuations that are tough to calculate and create increased price uncertainty from a business point of view. At the same time, strategies aimed at checking climate change and facilitating environmentally sustainable growth are being devised on all political levels. In this regard, Germany has launched an energy revolution. The objective is to create a new type of energy-supply system that is primarily based on renewable energy sources. The energy revolution is to be managed by the long-term EU Energy Roadmap 2050 and the midrange EU Energy Efficiency Directive, which are designed to reduce EU emissions of greenhouse gases to at least 80 percent below 1990 levels by 2050 as well as improve energy efficiency by 20 percent through 2020. These improvements are to be primarily achieved through a so-called decarbonization of electricity production—that is, through a substantial increase in renewable energies and through improved energy efficiency. Germany has committed itself to cutting CO2 emissions by 40 percent through 2020. This objective is being ratcheted up—especially in comparison with the EU Energy Roadmap 2050—thanks to the country’s pullout from nuclear energy announced in 2011, which is set to be completed by 2022 when all nuclear power plants operating in the country will be shut down. The essence of Germany’s energy revolution is a complete reversal of the way energy is produced and supplied today. This means the use of renewable energies will have to expand and energy efficiency improve. For this reason, the energy revolution will trigger sweeping economic, political and social change. The state of Baden-Württemberg plans to take action in this area and become the leading energy and climate-protection region. The Energy Revolution Targets 50-80-90 constitute the state government’s benchmark here: A 50 percent reduction in energy 4 4 4 4 4 4 4 4 4 4 4 4 4 4 consumption, a share of renewable energies totaling 80 percent and a 90 percent reduction in greenhouse gases (all targets relate to the base year of 1990). To achieve these targets, extensive investments must be made at all levels—that is, by private individuals, municipalities and companies. Baden-Württemberg plans to develop an environment for sustainable growth and development that will benefit both state residents and businesses. For this reason, the state has launched a far-ranging investment-support initiative that creates incentives for individuals and companies to act in an environmentally and economically sustainable manner by conserving resources and improving efficiency over the long run. Businesses, in particular, can profit in many ways from the energy-efficiency initiatives. The state’s infrastructure will be modernized and the competitiveness of the entire WEBSITES OF INVESTMENT-SUPPORT ORGANIZATIONS L-Bank: www.l-bank.de Bürgschaftsbank Baden-Württemberg: www.buergschaftsbank.de Mittelständische Beteiligungsgesellschaft Baden-Württemberg: www.mbg.de Kreditanstalt für Wiederaufbau (KfW): www.kfw-mittelstandsbank.de gruendung-bw.de: www.gruendung-bw.de Baden-Württemberg Ministry of Finance and Economics: www.mfw.baden-wuerttemberg.de Investment Guide Baden-Württemberg business location improved by offering incentives for resourceconserving innovations that extend beyond energy savings. In this way, Baden-Württemberg will become even more attractive to businesses in the future. 4.2 INVESTMENT-SUPPORT PROGRAMS The public investment-support programs offered by Germany and, particularly, Baden-Württemberg set international standards. The country’s European neighbors view them as a blueprint for the enhancement of their own investment-support structures. L-Bank, acting as the state’s development bank, plays a key role here. With its broad range of services and total assets of around 70 billion Euro, it is one of Europe’s largest development banks. As a government-owned bank, L-Bank plays a major role in Baden-Württemberg’s business-development and investment-support activities. Its mission can be succinctly stated as follows: be on hand where and when needed and address key issues. One of L-Bank’s main responsibilities is to support the state’s business community, municipalities and residents. The investment-support programs are designed especially with small and midsized enterprises in mind. This assistance is directed at start-ups as well as investment and modernization projects. A broad spectrum of financing instruments is employed to achieve this goal. L-Bank does not compete against other banks and savings banks. On the contrary: the investment-support programs are generally provided through relationship banks (relationship bank principle). The good working relationship between L-Bank and relationship banks has paid off, especially during the recent global financial and economic crisis. These banks are familiar with local companies and the regional business environment. This collaborative principle also ensures that the extensive range of programs gains wide acceptance among companies. Investment-support statistics from recent years demonstrate this point: In the past 10 years, L-Bank alone has issued about 26 billion Euro into Baden-Württemberg’s economy. These statistics also make one other point: Investment-support applications are efficiently and effectively processed. This is the only way to ensure that the funds being provided are being used to meet specific needs. The economy benefits from this important stimulus. L-Bank’s assistance to businesses begins with the planning phase. The aim here is to find the best form of financing for a particular project. The experts at L-Bank communicate this knowledge during financing conferences, start-up seminars and workshops, which are to some extent organized in partnership with chambers of industry and commerce or directly by phone over the Business Development Hotline. In addition, events like the L-Bank Business Forum and business start-up trade fairs enable L-Bank’s experts to provide answers to financing questions. 57 ENERGY-EFFICIENCY FINANCING: A CASE STUDY A steel construction company launches an environmental management system on the basis of the European EMAS standard in order to continuously improve its environmental track record. The company is also planning to purchase an energy-efficient CNC lathe and milling center. To optimize resource efficiency, the company switches to using preformed blanks. Investment plan EUR Process innovation: “preformed blanks” 250,000 Lathe and milling center 200,000 EMAS certification Total 50,000 Financing plan EUR 500,000 Resource efficiency financing— Program component B 500,000 Total 1,000,000 2,500,000 500,000 5,150,000 The use of perfectly preformed blanks instead of bulk material could save up to 50 percent in wasted material. In addition, lower machining forces are at play, thereby reducing tool wear. Another efficiency gain is generated by shortening machining times by upstreaming production stages. In addition to the energy savings over standard industry machinery, the new CNC machinery makes it possible to achieve a significant reduction in the consumption of cutting fluid. All costs for investing in resource efficiency and environmental technology are covered by component B of the Resource Efficiency Financing investment-support program. There are no specific stipulations as to the level of savings that need to be achieved. The important point is resource consumption or environmental pollution is actually reduced. This program enables small and midsized companies that put resource efficiency into practice to benefit from attractive end-borrower conditions, a loan-arrangement year without having to pay a commitment fee and streamlined handling. An assessment carried out by a specialist is not compulsory, however it is recommended that companies obtain free advice from the experts at the Steinbeis-Stiftung für Wirtschaftsförderung or RKW Baden-Württemberg. Projects eligible for funding include, for example, steps to achieve resource and material savings, to optimize production processes, to increase the use of renewable resources or to reduce water and air pollution. Small and midsized enterprises form the backbone of Baden-Württemberg’s economy. These companies need effective support and flexibility to go into business, invest in their operations, overcome liquidity logjams, upgrade their facilities or expand their activities. L-Bank offers a number of in- 58 Investment Guide Baden-Württemberg vestment-support programs to address their needs—also in conjunction with other development banks. These investment-support instruments include: In addition to its own investment-support programs, L-Bank plays an active role in the state’s investment-support and business-development efforts—for example, the awarding of funding from the European Social Fund. The economic support focuses on small and midsized enterprises (SMEs). and contribute to environmental protection. Companies acting in a sustainable manner have an opportunity to take out business-development loans at very low interest rates. And these rates apply to the entire term of the loan, up to a maximum of 10 years. As supplemental support, applicants can seek risk relief from such institutions as Bürgschaftsbank Baden-Württemberg as part of a streamlined process or—in cases involving large sums of money—directly from L-Bank. The key condition for this assistance provided by L-Bank in conjunction with the KfW Bank Group is a certain level of energy- and material-saving potential from which both the environment and the company will profit over the long term. This savings potential is validated by RKW or the Steinbeis Foundation free of charge to applicants. Besides L-Bank, Bürgschaftsbank Baden-Württemberg and Mittelständische Beteiligungsgesellschaft Baden-Württemberg (MGB) are important contacts for company financing. The federal government’s own Kreditanstalt für Wiederaufbau (KfW) acts as a refinancing partner for the investment-support services provided by L-Bank and as an independent businessdevelopment and investment-support organization. Given their range of products and services for business start-ups, company acquisitions and investments, all of these investmentsupport institutions meet the needs of new investors. With their business-development services, they can also support the growth of existing businesses. The overview on page 56 matches possible projects with selected investment-support programs. In cooperation with KfW, L-Bank has supported small and midsized businesses particularly active in research and development by providing Innovation Financing (InnoFin) since 2015. The program helps finance the innovation or enhancement of products, production processes and services in BadenWürttemberg. While the terms and conditions are similar to Resource Efficiency Financing, this form of investment assistance requires submission of a free-of-charge innovation assessment from a certified expert such as RKW or the Steinbeis Foundation. Thanks to a new framework agreement between L-Bank and the European Investment Fund (EIF), innovation financing can be customized by adding an inexpensive InnovFin loan guarantee. 4.2.1 E XTERNAL FINANCING 4.2.2 E QUITY AND EQUITY-TYPE FINANCING (MEZZANINE FINANCING) @ Low interest loans @ Subsidies @ Loan guarantees @ Venture capital The Start-Up Financing 80 and Start-Up Financing programs are the central investment-support instruments for new businesses in Baden-Württemberg. The support is provided to people starting new businesses as well as to new small and midsized enterprises for a maximum of five years after establishment. The standard program offered to SMEs that have been in business for more than five years is Growth Funding for Investment Financing. If capital equipment needs to be financed rather than investments, SME needs can be covered by start-up and growth financing. For investors who don’t meet the SME criterion, liquidity loans are the main option for funding capital equipment. This type of loan appeals to investors who have a short- and midterm need for financing in connection with the acquisition of an existing company or who do not meet the SME criterion. You will find other investment-support options, including for special business-development purposes, in the overview of the publication and on the websites of the investment-support organizations. Program parameters are also provided there. Resource Efficiency Financing is the core program for special business-development purposes (see the information box on page 57). In 2015, L-Bank extended its Energy-Efficiency Financing program for SMEs by adding another component designed to promote resource efficiency and environmental technology. This program enables L-Bank to support SMEs that invest in improving their energy and resource efficiency Over the last few years, the state of Baden-Württemberg has championed the effort to enhance equity financing for new, innovative companies. L-Bank’s MidSized Enterprise Fund and Venture Capital Portfolio play an important role here. The MidSized Enterprise Fund itself provides equity or equity-type financing directly to established midsized businesses. Its stake in STAUFEN AG enables the MidSized Enterprise Fund to also benefit from lean-management consulting expertise. Around 272 million Euro have been invested since the fund was established in 2002. L-Bank also plays an indirect role in this segment through its stakeholdings in MBG and BWK. Thanks to its Venture Capital Portfolio, L-Bank stands ready to assist when companies expand. The portfolio focuses on technology-intensive companies, particularly those from the information and communication technology sector. Through the end of 2014, 38 million Euro has been invested. The resources in this subportfolio within the MidSized Enterprise Fund were boosted from 50 million Euro to 100 million Euro to be able to even more effectively support companies during their critical growth phases. With their focus on technology companies, IT and Internet businesses, L-Bank’s venture-capital activities are hallmarked by a long-term investment view, a high degree of flexibility and substantial industry expertise that facilitates an entrepreneurial investment philosophy. Investment Guide Baden-Württemberg FINANCING CONFERENCES FOR ENTREPRENEURS AND PEOPLE SEEKING TO START UP OR ACQUIRE THEIR OWN COMPANIES L-Bank acts as a central point of contact for companies and entrepreneurs regarding financial assistance with business start-ups, company succession and growth. It provides assistance at its consulting centers in Stuttgart and Karlsruhe and at consulting conferences held at local chambers of industry and commerce and chambers of crafts and trades. The latest dates and venues can be found on the websites of regional chambers overseeing the events or the information can be obtained over the phone. Participants must register for the conferences held at the chambers. Freiburg Chamber of Crafts and Trades Bismarckallee 6, 79098 Freiburg Internet: www.hwk-freiburg.de Phone: +49 761 21800-100 Heilbronn-Franken Chamber of Crafts and Trades Allee 76, 74072 Heilbronn Internet: www.hwk-heilbronn.de Phone: +49 7131 791-171 Karlsruhe Chamber of Crafts and Trades Friedrichsplatz 4–5, 76133 Karlsruhe Internet: www.hwk-karlsruhe.de Phone: +49 721 1600-166 Konstanz Chamber of Crafts and Trades Webersteig 3, 78462 Konstanz Internet: www.hwk-konstanz.de Phone: +49 7531 205-373 Mannheim Rhein-Neckar-Odenwald Chamber of Crafts and Trades, B1, 1–2, 68159 Mannheim Internet: www.hwk-mannheim.de Phone: +49 621 18002-0 Heilbronn-Franken Chamber of Industry & Commerce Ferdinand-Braun-Straße 20, 74074 Heilbronn Internet: www.heilbronn.ihk.de Phone: +49 7131 9677-112 Hochrhein-Bodensee Chamber of Industry & Commerce Schützenstraße 8, 78462 Konstanz Internet: www.konstanz.ihk.de Phone: +49 7531 2860-135 Karlsruhe Chamber of Industry & Commerce Lammstraße 13–17, 76133 Karlsruhe Internet: www.karlsruhe.ihk.de Phone: +49 721 174-138 Ostwürttemberg Chamber of Industry & Commerce Ludwig-Erhard-Straße 1, 89520 Heidenheim Internet: www.ostwuerttemberg.ihk.de Phone: +49 7321 324-182 Stuttgart Region Chamber of Industry & Commerce Jägerstraße 30, 70174 Stuttgart Internet: www.stuttgart.ihk24.de Phone: +49 711 2005-444 Reutlingen Chamber of Industry & Commerce Hindenburgstraße 54, 72762 Reutlingen Internet: www.reutlingen.ihk.de Phone: +49 7121 201-125 Rhein-Neckar Chamber of Industry & Commerce Hans-Böckler-Straße 4, 69115 Heidelberg Internet: www.rhein-neckar.ihk24.de Phone: +49 6221 9017-688 Reutlingen Chamber of Crafts and Trades Hindenburgstraße 58, 72762 Reutlingen Internet: www.hwk-reutlingen.de Phone: +49 7121 2412-131 Schwarzwald-Baar-Heuberg Chamber of Industry & Commerce Romäusring 4, 78050 Villingen-Schwenningen Internet: www.sbh-online.de Phone: +49 7721 922-121 Ulm Chamber of Crafts and Trades Syrlinstraße. 38, 89073 Ulm Internet: www.hk-ulm.de Phone: +49 731 1425-351 Südlicher Oberrhein Chamber of Industry & Commerce Schnewlinstraße 11–13, 79098 Freiburg Internet: www.suedlicher-oberrhein.ihk.de Phone: +49 761 3858-131 Bodensee-Oberschwaben Chamber of Industry & Commerce Lindenstraße 2, 88250 Weingarten Internet: www.weingarten.ihk.de Phone: +49 751 409-169 Ulm Chamber of Industry & Commerce Olgastraße 97, 89073 Ulm Internet: www.ulm.ihk24.de Phone: +49 731 173-250 59 60 Investment Guide Baden-Württemberg IMPORTANT TERMS Loan-guarantee program: Bürgschaftsbank Baden-Württemberg and L-Bank may issue a default guarantee of between 50 percent and 80 percent of the loan volume under their loan-guarantee programs in order to reduce the risks borne by relationship banks when financing business start-ups and acquisitions. Bürgschaftsbank covers up to 2.5 million Euro for new loans. Higher loan guarantees are provided by L-Bank (from 2.5 million to 5 million Euro) and the state of Baden-Württemberg (loan guarantees above 5 million Euro). Applications for loan guarantees are made through the applicant’s relationship bank. makes a refinancing commitment to the relationship bank. The relationship bank then concludes a loan agreement with the customer, ensures that the loan is paid out and provides evidence to L-Bank of the correct use of funds once the investment project has been completed. Business start-ups: Establishment of an independent business by means of setting up a new company or acquiring a company or purchasing a stake in such a business constitutes a business start-up. The business start-up assistance provided by L-Bank requires commercial or professional exercise of self-employment as a primary or secondary occupation. Start-Up Financing 80 can be requested for up to three years and start-up financing can be requested for up to five years following start-up or the commencement of self-employment. Mezzanine financing: This type of financing includes profit-sharing certificates, silent participations and subordinated loans that include elements of equity and debt capital. Many banks recognize mezzanine financing as equity, which can improve the equity ratio and rating of the company in question. Relationship bank procedure: Applications for public investment-assistance loans can be submitted only through a relationship bank. The bank examines the economic viability of the application by means of a rating and evaluates the available collateral. If the issuance of a loan is considered to be justifiable, the relationship bank forwards the application to L-Bank. L-Bank then reviews the support terms and conditions and, if a positive decision is made, A comprehensive range of venture financing options for fast-growing start-up businesses has been established in collaboration with various partners, and it is one of the best in Germany. This dovetailed system makes it possible to support companies at different stages of their development. L-Bank plays an important role in this process either directly or indirectly as a stakeholder in financing partners. As a result, the system involving the state of Baden-Württemberg together with the Mittelständische Beteiligungsgesellschaft (MBG), LBBW Venture Capital and L-Bank’s 2009-initiated Seedfonds BW is active as a co-investment fund for early-phase investments of the High-Tech Start-Up Fund. During the start-up phase, the MBG-managed VC-Fonds Baden-Württemberg takes effect. L-EA, the equity agency of L-Bank, enables small and midsized enterprises to draw on the agency’s SME fund as a way of covering their additional capital needs. L-EA has stakes in established small and midsized enterprises in all industries that have financing needs. Companies must demonstrate they have a strong market position, attractive growth and earnings potential, skilled management, a clearly structured niche position and a focused overall strategy. Other investment-support options can be found in the overview and on the websites of the business-development organizations. SME: The EU-wide definition of small and midsized enterprises is based on workforce (fewer than 250 employees), annual revenue (a maximum of 50 million Euro) or total assets (a maximum of 43 million Euro). Active stakeholding: This type of business start-up is characterized by active business co-management in terms of an assumption of management responsibilities vis-à-vis third parties. Such a stakeholding requires the ability to influence business decisions by exercising voting rights (at least 10 percent) at the general shareholders’ meeting. Acquisition: An acquisition is a change in a company’s ownership through the purchase of business stakeholdings (share deal) or business assets (asset deal). As a form of business start-up, company takeovers may draw on several of the L-Bank investment-assistance programs. 4.2.3 L OAN GUARANTEES A lack of collateral can be offset by L-Bank or Bürgschaftsbank. In this process, the bank providing a loan receives a letter of indemnity covering a portion of the financing risk. This letter covers the loss of capital up to a set maximum amount after deduction of income generated by the sale of collateral. The guarantees apply to both individual loans and credit lines. You will find more detailed information about the program and its terms on the websites of the business-development organizations. Investment Guide Baden-Württemberg 61 5OVERVIEW OF COMPANY LAW AND BUSINESS TAXES Corporations Legal form Private limited company (GmbH) Business enterprise with limited liability (UG—Unterrnehmergesellschaft [haftungsbeschränkt]) Stock corporation (AG) Limited partnership with shares (KGaA) Features The most common type of company. A private limited company is an incorporated enterprise with its own legal personality in which legal or natural persons may invest capital. This is not a separate legal form, but a variant of the GmbH. A stock corporation is an incorporated company with its own legal personality and capital stock of at least 50,000 Euro that is divided into shares of stock. Stockholders hold a stake in the company and acquire rights, including a voting right at the general shareholders’ meeting. The limited partnership with shares is a company with its own legal personality that is run by one or more general partners who are personally liable. Establishment At least one person is required in order for a GmbH to be established. Generally, though, at least two owners set up a GmbH. All founding shareholders must conclude a contract that requires notarization. The GmbH must be entered into the Commercial Register. A GmbH is legally required to have at least 25,000 Euro in equity capital. It is established by at least one stakeholder. Common capital stock is a minimum of 1 Euro. One or more people can be part of the AG’s establishment, receiving shares of stock in exchange for their investment. The articles of association must be notarized and must include certain information. A limited partnership with shares can be established by one or more persons. Function and organ structure As a legal entity, the GmbH can act only through its organs (the managing director, the general shareholders’ meeting or the supervisory board). The CEO(s) represent(s) the limited-liability business enterprise. The organs of the company are the general shareholders’ meeting, the management board and the supervisory board. A general shareholders’ meeting must be held once a year. The management board consists of one or more individuals, depending on the capital stock and the size of the workforce. The entire capital consists of the investments made by the partners and the capital stock (at least 50,000 Euro, divided into shares). In principle, the partnership shareholders have the same rights and obligations as stockholders in a corporation. The general shareholders’ meeting is the organ of a limited partnership with shares. Legal status of owners Each owner is entitled to ownership and decision-making rights that correspond to his or her stake in the company. The rights and responsibilities of stakeholders include participating in profit sharing proportional to their common capital stock and deciding on the appropriation of profits as well as appointing, dismissing and approving the actions of the CEO. Stockholders have decisionmaking and asset rights. At least one partner has personal, unrestricted liability for obligations. The limited liability shareholders have stakes in the company’s capital stock and have the same membership rights. But they are not personally liable for the company’s obligations. Liability The liability risk of the GmbH is limited to the assets of the GmbH. The partners assume no personal liability with their personal assets. The liability provisions of the German Limited-Liability Companies Act apply. The limited-liability business enterprise is, as a rule, only liable to its creditors in the amount of the company‘s assets. As a rule, stakeholders are not liable in the sense of their private assets being at risk. The company, not the stockholders, is liable with its assets for its obligations to creditors. The limited partnership with shares can be listed on the stock exchange. This makes it the appropriate legal form for small and midsized enterprises that want to expand their financial base on the capital markets. Unlike the AG, it enables a more personal form of management. Accounting An annual report consisting of a financial statement, profit and loss statement, notes that explain specific points in the financial statement and the profit and loss statement as well as a management report must be prepared. The stipulations of the German Commercial Code apply to the limited-liability business enterprise as a variant of the GmbH. This form of company has a statutory accounting obligation (doubleentry accounting including annual financial statement). The company is required to keep financial records and follow the balance-sheet requirements contained in the German Stock Corporation Act. The company’s annual financial statements are prepared under IFRS. The partnership with limited shares is subject to the regulations that cover stock companies. 62 Investment Guide Baden-Württemberg Partnerships Features Individual proprietorship Partnership under the German Civil Code (GbR) Limited partnership (KG) General commercial partnership (OHG) Partnership based on the Act Governing Partnerships for Members of the Professions (PartGG) The individual proprietorship involves the opening of a business by a person without a new legal personality being created. The individual proprietor is liable with both the company’s and his or her own private assets. No mandatory amount of capital is required. The individual proprietorship does not have to be entered into the Commercial Register. This form is designed for business partnerships (exception: mercantile trade). The purpose of the business is defined in an agreement, which does not have to take a specific form. The owners have extensive leeway in composing the framework of the agreement. A minimum amount of capital is also not required. Every owner bears personal and unlimited liability for the partnership’s obligations. The limited partnership has at least one general partner who bears full liability—including with his or her private assets— and at least one limited partner whose liability is restricted to the amount of his or her investment. Only the general partners are authorized to manage the business. The limited partners are granted no right to influence the operation of the company. The law requires no minimum amount of capital investment. The general commercial partnership includes at least two owners who have unlimited liability with their business and personal assets. Each owner manages the company internally and represents it externally. No minimum amount of capital stock is required. Professionals form a partnership in order to practice their profession on their own. The regulations for a partnership are generally based on those of the partnership under the German Civil Code and the general commercial partnership. For the partnership’s f inancial obligations, the partners act as codebtors in addition to the partnership’s assets. The partnership and the acting partner assume liability for mistakes made in the performance of the business by individual partners. No minimum capital investment is required. Partnership GmbH & Co. KG –Features This is a special form of the limited partnership with a GmbH that acts as a personally liable partner. This organizational form combines the strengths of partnerships and joint-stock companies. –Establishment The GmbH & Co. KG is created by a business contract that governs the relationship and rights of the owners. It can be flexibly written. – Functions and organ structure It is represented by the general partner GmbH. It may be managed by a third party. Limited partners do not have the authority to manage or represent the GmbH & Co. KG. –Legal status of the limited partners Each limited partner is required to make an investment that will correspond at least to the liability share that must be entered into the Commercial Register. The limited partners have a right to the payment of their profit share as well as monitoring and information rights. –Liability The general partner GmbH bears unlimited liability for the obligations of the GmbH & Co. KG up to the liability share entered into the Commercial Register. –Accounting The same regulations that apply to a joint-stock company apply in terms of the annual financial statements and the management report. The limited partnership and the general partner GmbH must issue separate financial statements. Branch offices Foreign investors can establish a branch office of their company in Germany. This unit, geographically separate from the company‘s main branch or headquarters, is particularly suitable for market entry. A branch office is legally and organizationally a part of the company where it is domiciled and is therefore not a separate legal entity. It conducts similar business as the company‘s main branch or headquarters, although the main branch or headquarters is liable for the branch office‘s commitments and liabilities. Two forms exist in Germany: – Independent branch office Foreign commercial businesses can establish an independent branch office once they are listed in a foreign commercial register. Although in terms of internal organization the branch office is a dependency of the main branch or headquarters, it has independent business dealings and can also transact business, upon conclusion of which the foreign parent company assumes liability. – Nonindependent branch office This kind of branch office is regarded as a subordinate department of the main branch or headquarters, has no autonomy and may not have general business dealings independent of the parent company. Investment Guide Baden-Württemberg 63 European legal developments Legal form European Stock Corporation (Societas Europaea, SE) European Cooperative Society (Societas Cooperativa Europaea, SCE) European Economic Interest Grouping (EEIG) Features A European Stock Corporation can be established in any EU member state. Companylaw principles are governed by an EU Regulation that gives national legislatures a degree of latitude on implementation. National stockcorporation law in the relevant country where the SE is established as well as the rules of incorporation relating to the national stockcorporation law apply to SEs. The European Stock Corporation is especially suitable for companies with operations in various locations and that want to have their activities under the control of a single holding company. A European Stock Corporation can relocate to another EU country without closing its previous headquarters. The EU supports the development of crossborder activities carried out by cooperative societies and enables individuals or legal entities to establish cooperative societies at a European level. The same rules of competition apply to cooperative societies and corporations. Put in simple terms, an SCE can be established by – at least five individuals or legal entities, –a n amalgamation of cooperative societies or – conversion into a cooperative society. An EEIG is a partnership established on the basis of EU law with the objective of promoting the business aims of its members and facilitating business activities by pooling resources, activities and experience. The EEIG must consist of at least two members from different EU member states. Business taxes Type of tax Features Income taxes Income tax The income of natural persons is taxed. For trade companies and partnerships, the tax is based on the enterprise’s profits. Flat-rate withholding tax A tax on capital gains deducted at the source. Corporate tax A special type of income tax that applies to legal persons, other associations of individuals and assets. Income forms the basis for taxation. Solidarity surcharge Surcharge on income and corporate taxes to finance German unification. Local trade tax Tax on domestic businesses based on operating income, which is often the profit. Taxes on assets Property tax Tax applied to domestic property. Estate and gift tax Tax applied to the inheritance of individual heirs or other individuals. The gift tax is a supplement to the estate tax. Transaction and consumer tax Sales tax Tax on deliveries and other services that a company provides within Germany for compensation. Real-estate transfer tax Tax applied to the purchase of domestic property. 64 Investment Guide Baden-Württemberg 6 CONTACT ADDRESSES A) GOVERNMENT AGENCIES AND BANKS Baden-Württemberg Ministry of Finance and Economics Neues Schloss, Schlossplatz 4, 70173 Stuttgart Phone: + 49 711 123-0 Fax: + 49 711 123-4791 E-mail: [email protected] Internet: www.mfw.baden-wuerttemberg.de Baden-Württemberg International – Gesellschaft für internationale wirtschaftliche und wissenschaftliche Zusammenarbeit mbH (bw-i; Baden-Württemberg International Agency for International Economic and Scientific Cooperation) Haus der Wirtschaft, Willi-Bleicher-Straße 19 70174 Stuttgart Phone: + 49 711 22787-0 Fax: + 49 711 22787-22 E-mail: [email protected] Internet: www.bw-i.de, www.bw-invest.de Steinbeis-Stiftung für Wirtschaftsförderung (Steinbeis Foundation for Business Promotion) Haus der Wirtschaft, Willi-Bleicher-Straße 19 70174 Stuttgart Phone: + 49 711 1839-5 Fax: + 49 711 1839-700 E-mail: [email protected] Internet: www.steinbeis.de Regierungspräsidium Stuttgart Informationszentrum Patente (Regional Council of Stuttgart—Information Center on Patents) Haus der Wirtschaft, Willi-Bleicher-Straße 19 70174 Stuttgart Phone: +49 711 123-2558 Fax: +49 711 123-2560 E-mail: [email protected] Internet: www.patente-stuttgart.de L-Bank (Landeskreditbank Baden-Württemberg – Förderbank; L-Bank, State Development Bank Baden-Württemberg) Schlossplatz 10 76113 Karlsruhe Phone: +49 721 150-0 Fax: +49 721 150-1001 Börsenplatz 1 70174 Stuttgart Phone: +49 711 122-0 Fax: +49 711 122-2112 E-mail: [email protected] Internet: www.l-bank.de Bürgschaftsbank Baden-Württemberg GmbH Werastraße 13–17 70182 Stuttgart Phone: +49 711 1645-6 Fax: +49 711 1645-777 E-mail: [email protected] Internet: www.buergschaftsbank.de MBG Mittelständische Beteiligungsgesellschaft Baden-Württemberg GmbH Werastraße 13–17 70182 Stuttgart Phone: +49 711 1645-6 Fax: +49 711 1645-777 E-mail: [email protected] Internet: www.mbg.de RKW Baden-Württemberg GmbH Königstraße 49 70173 Stuttgart Phone: +49 711 22998-0 Fax: +49 711 22998-10 E-mail: [email protected] Internet: www.rkw-bw.de Investment Guide Baden-Württemberg B) TRADE ASSOCIATIONS Baden-Württembergischer Industrie- und Handelskammertag e. V. Jägerstraße 40 70174 Stuttgart Phone: +49 711 225500-60 Fax: + 49 711 225500-77 E-mail: [email protected] Internet: www.bw.ihk.de Baden-Württembergischer Handwerkstag e. V. Heilbronner Straße 43 70191 Stuttgart Phone: +49 711 263709-0 Fax: +49 711 263709-100 E-mail: [email protected] Internet: www.handwerk-bw.de Landesverband der Baden-Württembergischen Industrie e. V. (LVI) Gerhard-Koch-Straße 2–4 73760 Ostfildern-Scharnhauser Park Phone: +49 711 327325-0 Fax: +49 711 327325-69 E-mail: [email protected] Internet: www.lvi-online.de Wirtschaftsverband Industrieller Unternehmen Baden e. V. Merzhauser Straße 118 79100 Freiburg Phone: +49 761 4567-0 Fax: +49 761 4567-599 E-mail: [email protected] Internet: www.wvib.de Leichtbau BW GmbH Landesagentur für Leichtbau Baden-Württemberg Haus der Wirtschaft, Willi-Bleicher-Straße 19 70174 Stuttgart Phone: +49 711 123-3000 Fax: +49 711 123-2145 E-mail: [email protected] Internet: www.leichtbau-bw.de MFG Medien- und Filmgesellschaft Baden-Württemberg mbH Breitscheidstraße 4 70174 Stuttgart Phone: +49 711 90715-300 Fax: +49 711 90715-350 E-mail: [email protected] Internet: www.mfg.de Umwelttechnik BW Technologie- und Innovationszentrum Umwelttechnik und Ressourceneffizienz Baden-Württemberg GmbH Bahnhofspassage 2 71034 Böblingen Phone: +49 7031 20398-10 Fax: +49 7031 20398-21 E-mail: [email protected] Internet: www.umwelttechnik-bw.de D) R EGIONAL BUSINESS-DEVELOPMENT SUPPORT C) S TATE BUSINESS-INVESTMENT SUPPORT GROUPS Alb-Donau-Kreis Wirtschaftsförderung Schillerstraße 30 89077 Ulm Phone: +49 731 185-0 Fax: +49 731 185-1304 E-mail: [email protected] Internet: www.alb-donau-kreis.eu BIOPRO Baden-Württemberg GmbH Breitscheidstraße 10 70174 Stuttgart Phone: +49 711 218185-00 Fax: +49 711 218185-02 E-mail: [email protected] Internet: www.bio-pro.de Landkreis Biberach Wirtschaftsförderung Rollinstraße 9 88400 Biberach Phone: +49 7351 52-0 Fax: +49 7351 52-350 E-mail: [email protected] Internet: www.biberach.de e-mobil BW GmbH Leuschnerstraße 45 70176 Stuttgart Phone: +49 711 892385-0 Fax: +49 711 892385-49 E-mail: [email protected] Internet: www.e-mobilbw.de Bodensee Standort Marketing GmbH Max-Stromeyer-Straße 116 78467 Constance Phone: +49 7531 800-1145 Fax: +49 7531 800-1146 E-mail: [email protected] Internet: www.bodensee-standortmarketing.com 65 66 Investment Guide Baden-Württemberg Metropolregion Rhein-Neckar GmbH N7, 5–6 68161 Mannheim Phone: +49 621 12987-0 Fax: +49 621 12987-50 E-mail: [email protected] Internet: www.m-r-n.com Standortagentur Tübingen – Reutlingen – Zollernalb GmbH Hindenburgstraße 54 72762 Reutlingen Phone: +49 7121 201262 Fax: +49 7121 2014262 E-mail: [email protected] Internet: www.neckaralb.de TechnologieRegion Karlsruhe GbR Rathaus, Marktplatz 76133 Karlsruhe Phone: +49 721 133-1873 Fax: +49 721 133-1879 E-mail: [email protected] Internet: www.technologieregion-karlsruhe.de WiR GmbH Landkreis Ravensburg Kuppelnaustraße 8 88212 Ravensburg Phone: +49 751 35906-60 Fax: +49 751 35906-70 E-mail: [email protected] Internet: www.wir-rv.de Wirtschaftsförderung Bodenseekreis GmbH Leutholdstraße 30 88045 Friedrichshafen Phone: +49 7541 38588-0 Fax: +49 7541 38588-33 E-mail: [email protected] Internet: www.wf-bodenseekreis.de Wirtschaftsförderung Region Stuttgart GmbH Friedrichstraße 10 70174 Stuttgart Phone: +49 711 22835-0 Fax: +49 711 22835-55 E-mail: [email protected] Internet: www.region-stuttgart.de Wirtschaftsförderung Zukunftsregion Nordschwarzwald GmbH Blücherstraße 32 75177 Pforzheim Phone: +49 7231 154369-0 Fax: +49 7231 154369-1 E-mail: [email protected] Internet: www.nordschwarzwald.de Wirtschaftsförderungsgesellschaft mbH Region Ostwürttemberg WiRO Universitätspark 1 73525 Schwäbisch Gmünd Phone: +49 7171 92753-0 Fax: +49 7171 92753-33 E-mail: [email protected] Internet: www.ostwuerttemberg.de Wirtschaftsförderungsgesellschaft Schwarzwald-Baar-Heuberg mbH Marienstraße 10 78054 Villingen-Schwenningen Phone: +49 7720 660-4400 Fax: +49 7720 660-4409 E-mail: [email protected] Internet: www.gewinnerregion.de, www.wirtschaftsfoerderung-sbh.de Wirtschaftsregion Heilbronn-Franken GmbH Gesellschaft für Standortmarketing, regionale Wirtschaftsförderung und Tourismus Weipertstraße 8–10 74076 Heilbronn Phone: +49 7131 76698-60 Fax: +49 7131 76698-69 E-mail: [email protected] Internet: www.heilbronn-franken.com Wirtschaftsregion Offenburg/Ortenau (WRO GmbH) In der Spöck 10 77656 Offenburg Phone: +49 781 96867-33 Fax: +49 781 96867-50 E-mail: [email protected] Internet: www.wro.de Wirtschaftsregion Südwest GmbH Marie-Curie-Straße 8 79539 Lörrach Phone: +49 7621 5500-150 Fax: +49 7621 5500-155 E-mail: [email protected] Internet: www.wsw.eu Wirtschaftsregion Freiburg e. V. Rathausgasse 33 79098 Freiburg Phone: +49 761 3881-1210 Fax: +49 761 3881-1299 E-mail: [email protected] Internet: www.wrf-freiburg.de Contact partners: L-Bank Cordula Bräuninger Schlossplatz 10 76113 Karlsruhe Phone: +49 721 150-1284 Fax: +49 721 150-1260 E-mail: [email protected] FRANKFURT BUSINESS MEDIA GmbH – Der F.A.Z.-Fachverlag Dr. Guido Birkner Frankenallee 68–72 60327 Frankfurt am Main Phone: +49 69 7591-3251 Fax: +49 69 7591-803251 E-mail: [email protected] Imprint Date: October 2015 Disclaimer: All information contained in this guide has been carefully researched and compiled. The editors and publishers assume no responsibility for the accuracy and completeness of the investment guide or for any changes that may occur after its publication. © 2015 FRANKFURT BUSINESS MEDIA GmbH – Der F.A.Z.-Fachverlag, Frankenallee 68–72, 60327 Frankfurt am Main, Germany (Management: Torsten Bardohn, Dr. André Hülsbömer, Bastian Frien) L-Bank, Schlossplatz 10, 76113 Karlsruhe and Börsenplatz 1, 70174 Stuttgart, Germany All rights reserved, including the rights of photomechanical reproduction and storage on electronic media. Editor: Dr. Guido Birkner, Gunther Schilling (chapter 3) Translation: Leinhäuser Language Services GmbH Design: Jung von Matt/Neckar Layout: FRANKFURT BUSINESS MEDIA – Der F.A.Z.-Fachverlag Printing: Boschen Offsetdruck GmbH, Alpenroder Straße 14, 65936 Frankfurt am Main, Germany, www.boschendruck.de STILL GOING FROM STRENGTH TO STRENGTH @ As the state development agency, we continue to support one of Europe’s strongest regions: Baden-Württemberg. Information at www.l-bank.de/ir