GERMANY

Insights into Europe’s Biggest Economy 1 / 24

REMAKING
MANUFACTURING
High-profile international investments inindustrial manufacturing herald a bright
future for “Made in Germany”

H2 TO GO

A new generation ofhydrogen-ready power
plants drives ­Germany’s
H2 economy

GREEN TRANSITIONUNDERWAY

The Northeast is key to­Germany's energy future
Page 14

H H
ar a
n
n
sk ess d
ill inw
ed g tehtr e rkad pr
Pa es ou secge in d t
30 Ger rad tom iti ran onyofPage 20

Photo: Illing & Vossbeck Fotografie

FOCUS

MANUFACTURING
IN GERMANY“Made in Germany” enters an­ xciting new era with a series ofehigh profile international projects.
Page 4REGIONAL DEVELOPMENTSKILLED TRADES AND CRAFTS“Germany dominates semiconductor productionin Europe. Rumors of its
industrial demise havebeen exaggerated.”
Dear Reader,

The green transition

Handwerk tradition

German State Secretary Michael Kellner discusses the importance of the northeastern regions.

Germany’s skilled trades are an invaluable
resource for international companies.

Page 14

Page 30

ENERGY

MORE ARTICLES IN THIS ISSUE:

Getting readyfor H2

In brief: Quantum computing, climate-neutral
steel and AI for sustainable agriculture........ Page 12

A new generation of hydrogen-powered andhydrogen-ready power plants in Germany
will require multi-billion-euro investments.
Opportunities abound for cleantech manufacturers, consultants and suppliers.
Page 20

Pushing solar boundaries: German photovoltaics are breaking efficiency records........... Page 18
Printing sustainability: 3D printing helps
manufacturers save costs and resources.... Page 22
The future of learning: AI applications aretransforming the educational landscape.... Page 24
Two AI success stories: Why Germany is
becoming the smart place to set up.........Page 26
Transition tech: Kirsten Rohde, expert in EU
state aid law at PwC, unpacks TCTF.........Page 28

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Editor: Jefferson Chase
Editorial Team Kammann Rossi/wortwert: Imogen
O’Rorke, Christoph Hus, Jürgen Jehle
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This edition of Markets Germany is all about
making things — in Germany. Doom-mongers
often say that manufacturing in Europe’s largest
economy has no future. The price of everythingfrom labor to electricity is too expensive, they
contend, for Germany to compete with other production locations. But recent major international
expansion projects suggest otherwise.
In November, US pharmaceutical company Lilly
announced that it will open a new production facility worth EUR 2.3 billion in the western Germancity of Alzey. Meanwhile, Taiwanese semiconductor manufacturer TSMC plans to construct a
massive new EUR 10 billion chipmaking facility
in the eastern city of Dresden.
In fact, Germany dominates semiconductor production in Europe — it has the greatest numberof chipmaking megafab projects on the continent
by a wide margin. Competition between countries
to woo expanding businesses remains intense —that’s to be expected — but rumors of Germany’s
complete industrial demise have been greatly exaggerated.
There are many advantages to manufacturing
products in the heart of Europe. Proximity to customers, a burgeoning artificial intelligence startup sector and a unique tradition of tradesmanshipare just a few of the arguments in Germany’s favor.
So we hope this issue of our magazine makes you,our readers, think about whether you could be thenext German success story, in manufacturing orotherwise.

Order number: 21399
Cover: Delk Adotto/Kammann
Rossi, Source Adobe Stock

Dr. Robert Hermann, CEO
Email: invest@gtai.dePhoto: Gordon Welters/laifAndrew Moakes and his co-foundercame up with the idea for Evitado
while studying for their MBA in
Hamburg. Together they developed
a LiDAR-based solution for reducing
aircraft ground collisions.

ANDREW MOAKES: CO-FOUNDER AND COO, EVITADO
Every year the aviation industry spends billions of euros repairing aircraft damaged byground collisions, so Andrew Moakes decided
to do something about it. The engineer cameup with the concept for Evitado while studying for his MBA at the Northern Institute ofTechnology Management (NIT) in Hamburg.
Moakes and his co-founder Alex Kasinec firstbecame aware of the problem while studying
reports from the US Federal Aviation Administration and the International Air Transport
Association IATA.Together the two American
students developed a business plan for theirmaster’s thesis.
After graduating in 2019, they participated in the Airbus accelerator program bizlab,
where they developed a prototype LiDAR
sensor that can help warn of potential collisions. Today their clients includes notablenames such as Lufthansa, Swissport and the

US Air Force. “Hamburg, being a prominent
aviation hub in North Germany, facilitatedour market entry and networking within theindustry, eliminating the need for extensive
travel, making it the ideal environment forour business,” says Moakes.
The sensor is attached to towing vehicles
that move aircraft around on the ground.
It not only measures distance, but alsoscans the aircraft’s surroundings in three-­dimensional space, collecting cloud data,
making it far more advanced than ultrasonicsensors found in parking assist car systems.
“This technology is paving the way for autonomous aircraft towing, a key goal for us,”comments Moakes. The start-up has since
expanded to the US but Hamburg remains
the primary hub for research, development,
and production.

Quick facts
NAME

Andrew Moakes

JOB TITLECOOQUALIFICATION 	M.Sc. Mechanical Engi-

neering and Management,
M.B.A Entrepreneurship/
Entrepreneurial Studies

COMPANY NAME

Evitado

LOCATION 	Hamburg; Colorado, USA
INDUSTRY

Aviation

STAFF

 amburg: 10 (6 full time,H
4 students); USA: 2

CLIENT BASE	Airbus, Swissport, Dnata,

DHL, US Airforce, French
Airforce, Lufthansa

4MARKETS GERMANY | Focus

REMAKING
MANUFACTURING
It’s time to challenge the cliché that manufacturing in advanced economies in
Europe is just too expensive. A series of high-profile business expansions showthat “Made in Germany” is entering an exciting new era.

On August 8, 2023, the the Taiwanese
Semiconductor Manufacturing Company (TSMC) announced that it would
locate its first major European production facility in the eastern German city of Dresden.
The news put an end to years of speculationthat TSMC could go elsewhere.
So why did it choose Dresden? The company’s leadership cited a couple of factors: “Thisinvestment demonstrates TSMC’s commitment
to serving our customers’ strategic capacity
and technology needs, and we are excited at
this opportunity to deepen our long-­standing
partnership with Bosch, Infineon and NXP,”
said Dr. CC Wei, TSMC CEO, who also underlined Dresden’s promise as a location for
semiconductor innovation, particularly in theautomotive and industrial sectors. “We lookforward to bringing those innovations to life
in our advanced silicon technology with thetalent in Europe.”
His words ran contrary to a number ofdoom-and-gloom reports published aroundthe time. Germany was too expensive and too
bureaucratic for manufacturing, the critics
carped, and the country had been thrown into
an energy crisis by Russia’s war on Ukraine.
TSMC disagreed. And they were not alone.

A proliferation of projects
Eli Lilly and Company is another businesslured by the attractions of Europe’s traditional manufacturing powerhouse. As one of theworld’s leading suppliers of injectable medical
products and injection devices, the US pharma
giant is establishing a presence in the western
German city of Alzey with a manufacturing
facility costing some USD 2.5 billion (EUR 2.3
billion).
Germany Trade & Invest (GTAI), thecountry’s international business promotion
agency, assisted Lilly with its expansion.
“This project once again proves how attractive Germany can be as a location for manufacturing companies,” says GTAI CEO Robert
Hermann. And there are more large-scale

THE BOTTOM LINE
Confounding the naysayers, the future of industrial­manufacturing in Germany
remains bright and offers aplethora of opportunities forinternational businesses.

projects like this in the pipeline. “Aroundtwo dozen companies are currently planning major investments in Germany with a
total investment volume of around USD 80
billion,” said German Minister for Economic
Affairs and Climate Action Robert Habeckin August 2023.
In October, Habeck unveiled his strategy
to further strengthen Germany as a top-tierlocation for the global manufacturing industry. The plan includes tax breaks and subsidies for business investments, accelerated
expansion of renewable energies production
and reduction of bureaucracy.
Looking to the future
There’s no denying that rises in energy prices
with Germany’s rapid phase-out of Russian oil
and natural gas have presented a major challenge. But today’s prices are one thing; longterm strategy and future prospects are another.
“Companies that invest in production
sites always take a long-term view,” says GTAI
director of mechanical & electronic technologies Oliver Seiler. “They look beyond current uncertainties such as fluctuating energy
prices and see great potential in Germany
as a location for modern manufacturing.”

MARKETS GERMANY | Focus

520.4 %
Share of the manufactur­
ing industry in total grossIn the clean room of semiconductor
manufacturer Vishay Siliconix Itzehoe,
a technician inspects newly-minted
silicon wafers under a special yellowlight lamp.

value added in Germany
Source: BMWK 2023

€2.25tr
Annual turnover of the manu­
facturing industry in Germany
Source: Destatis (November 2022 to October 2023)

5.6m*
Number of employees
in the manufacturing­industry in Germany

Photo: press Vishay Siliconix

Source: Destatis (November 2023)* companies with 50 or more employees

6

MARKETS GERMANY | Focus“MODERN INDUSTRYIN EUROPE CAN ONLY
BE COMPETITIVE IF IT
IS HIGHLY ­AUTOMATED,CLIMATE NEUTRALAND EFFICIENT.”
Oliver Seiler, GTAI Director of Mechanical& Electronic Technologies

Seiler and his team are fielding extensive interest from international manufacturing companies that want to open new locations or expand existing production facilities. This trend
is borne out by the data. The 2023 Kearney FDI
Confidence Index also shows that businesspeople have great confidence in Germany’s
future viability. The index, which assesses
which countries are likely to attract the mostforeign direct investment in the coming three
years, ranks Germany as the most attractive
business location in Europe.
Europe’s evolving heartland
Germany has traditionally been Europe’s
largest and most successful industrial country and has much to recommend it, including
a rock-solid foundation of small to medium-­
sized enterprises (SMEs) upon which to build.
At the same time, German manufacturing ischanging with the times.

The European Union wants to see increased diversification and resilience and is encouraging
production to be moved closer to home wherever possible. Germany is key to the implementation of this strategy. After all, bringing production facilities back to the highly developed
industrialized countries of Europe requires thehighest level of engineering skills, something
for which Germany is also famous. “Modern
industry in Europe can only be competitive
if it is highly automated, climate neutral andefficient,” says Seiler.
Manufacturing companies from all industries can find the necessary expertise and skills
in Germany to master these challenges. The
Competitive Industrial Performance Rankingof the United Nations Development Organization (UNIDO) has ranked Germany as thecountry with the world’s most competitive
manufacturing sector every year since 2001.
The index evaluates 153 countries’ capacity

to produce and export manufactured goods,
their technological progress and their global
influence on manufacturing activity.
Microchips made in Germany
German excellence and innovation attrac­
ted not only TSMC, but also the US semiconductor manufacturer Wolfspeed. It recently
announced plans to build the world’s largest silicon carbide semiconductor factory inEns­dorf, Saarland. That “megafab” will cost
USD 3 billion (EUR 2.8 billion) and will be located, together with an R&D facility, on theformer site of a coal-fired power plant.
Then there’s Intel, the US chipmaker thatis investing EUR 30 billion in a factory in Magdeburg in eastern Germany. The decision tobuild one of the world’s largest chip factories
here was made primarily because Germany
has a great tradition of industrial production,
said Intel CEO Pat Gelsinger in autumn 2023.

MARKETS GERMANY | Focus

At the ground-breaking ceremony of
Vishay Group’s new chip factory in
Itzehoe, local officials get to work on
an expansion of Vishay’s production
facilities.

7“WE ARE MANAGING MORE MAJOR
PROJECTS THAN EVER B­ EFORE AT­GERMANY TRADE & INVEST.”GTAI’s consulting and service teams who specialize infinding industrial production sites in Germany are inhigh demand, says GTAI’s deputy director of energy,building and environmental technologies Rob Compton.

Germany’s long-standing industrial tradition is one of its main advantages as a location, regardless of energy price fluctuations.
That’s what drew the global semiconductor
manufacturer Vishay Siliconix to Germany
over 30 years ago. The US parent company
Vishay Intertechnology group is currently
investing EUR 374 million in the expansionof the production site in Itzehoe in northern Germany through its subsidiary Vishay
Siliconix Itzehoe. Over 500 employees develop and manufacture semiconductor components for use in automotive, industrial
and consumer electronics at the Itzehoe
site, and the latest investment will create
150 new jobs.
“In Itzehoe, expertise, research, an attractive environment in the greater Hamburg area
and the commitment of our employees cometogether to form a profitable unit,” explains
managing director Leif Henningsen.

tions and industry
clusters can initially seem confusing toforeign businesspeople. How can GTAI help?
ROB COMPTON: We are currently
managing not only more, but larger expansion projects than ever before. For
example, we are seeing a lot of interest
from manufacturing companies working in all stages of the battery technology supply chain. Germany is clearlyon its way to becoming the number
one battery location in Europe. But thesemiconductor industry and companies from the automation and robotics
sectors are also showing great interest in Germany as a business location.
How do you support manufacturing
companies in coming to Germany?
RC: For manufacturing companies, it’s
crucial to find suitable, often very large
and well-equipped industrial sites —and quickly. We provide support in
the search for suitable sites, organize

location inspections andestablish contacts withlocal partners. We
also help ensure thatapproval and support
from the national, regional and local authorities is fast and efficient.
The issue of subsidies is a pivotal one for industrial relocations
worldwide. How does GTAI provide
support in that regard?
RC: Our teams in Berlin provide expert
advice on subsidies. They’re familiar
with the complex funding conditions,they provide detailed analysis to findout which programs are suitable forcompanies, and they help with the application process. To do this successfully, it is important that companies
approach us at an early stage of their
expansion projects — ensuring thatthey do not miss important deadlines
or overlook criteria for subsidies.

Despite a global economic
slowdown, Germany continues
to attract major international
business expansions.

Photo: Adobe Stock/เลิศลักษณ์ ทิพชัย

Photo: picture alliance/dpa/Christian Charisius

Rob, Germany’s economic
structurewith its multiple
decentralized loca-

MARKETS GERMANY | Focus

Photo: Skeleton

8

FDI PERSPECTIVE:GROWING STRONGLY IN GERMANY
Estonian energy storage tech firm Skeleton Technologies, which has a main production site in Grossröhrsdorf near Dresden, is finding Germany a great place
for partnerships. It’s attracted a significant investment from Japanese trading
and investment business conglomerate Marubeni. And it’s also building a large
supercapacitor plant in Markranstädt near Leipzig with the help of the German
tech giant Siemens.
In October 2023, Siemens and Brazilian mining giant CBMM invested in Skeleton, withthe concluded funding round exceeding EUR 300 million. The aim of the investment
is to further expand the production capacities for Skeleton’s “SuperBattery” — batteries that not only charge very quickly, but also have a longer life. Additionally, says
the manufacturer, fewer rare raw materials are used during the production, as thecompany does not use cobalt, nickel, graphite or copper in production, but rather its
patented carbon-based “Curved Graphene.”
The production facility in Grossröhrsdorf, Germany, is the most modern ultracapacitor
factory in the world and the largest of its kind in Europe. The new factory in Leipzig
is scheduled to be completed at the end of 2024 and will have 40 times the capacityof the company’s existing site, producing up to 12 million cells a year.
“We see significant potential in the field of electrification of heavy-duty commercial
vehicles, electrified and hybrid vehicles as well as energy storage in the power grid,”says Masayuki Omoto, COO of Marubeni’s Next Generation Business Development
Division. “We are convinced that our investment will help Skeleton to expand its
capacity for mass production of the SuperBattery, bring it to market as quickly as
possible and accelerate the company’s growth.”
Real-world applications such as batteries for powering elevators and mobile healthcare
machinery and for electrified safety and autonomous functions in cars have alreadyproven the competitive advantages of Skeleton’s battery technology.

€300M

investment in latest round

12M

cells a year to be produced in
Skeleton’s German factory

1,000,000

charge-discharge cycles ofeach SuperBattery

Supercapacitor production isunderway at Skeleton Technologies
in Grossröhrsdorf, Germany. The
Estonian energy storage company isbuilding another plant near Leipzig.

MARKETS GERMANY | Focus

Henningsen emphasizes the importance ofcollaborating with regional partners and suppliers as often as possible, praising the “highquality and reliability” of those partnerships.
With a new, highly automated factory, the aim
is to contribute to Europe’s independence fromother parts of the world in semiconductor pro-duction. “Our products will help to shape aneven better future in the automotive and industrial sectors,” he says.
Clean energy as a selling point
The availability of clean energy is another big
attraction for manufacturers of electric vehicle

MAPPING FOREIGN DIRECT INVESTMENT

Some large-scale manufacturing
expansion projects in Germany(EV) batteries. After all, EV buyers need to know
not only that cars run cleanly but that the parts
have been sustainably produced.
That’s one reason Swedish battery makerNorthvolt is planning a major production facility in Germany.
Furthermore, the Luxembourg-based
chemical company Livista Energy wants tobuild the first European lithium refinery inGermany. And US electric car manufacturer
Tesla is also planning to expand its German“Gigafactory” in the town of Grünheide justoutside Berlin for producing the latest generation of electric vehicles.
“The government’s efforts to ensure thatenergy-intensive manufacturing companies
are supplied with clean energy are playing
an important role in all those projects,” says
Seiler. “Germany’s commitment to forging
ahead with the transition to clean energy
is attracting industrial companies that arethemselves adapting their production to besustainable and climate neutral.”HEIDE
ITZEHOE

The sky’s the limit
One such company is Deutsche Aircraft, ownedby the Texas-based Sierra Nevada Corporation(SNC) since 2015. It has just invested EUR 80
million in a new, CO2-neutral production facility in the eastern German city of Leipzig
where it is pioneering innovative aircraftmodels that can fly using far more efficient,biofuel-­compatible engines. “At Deutsche Aircraft, we take great pride in the construction of
our state-of-the-art and climate-friendly final
assembly line,” says chief operating officer Nico
Neumann.
The assembly line will be built and operated in compliance with the best industry
practices and sustainability principles. In
addition, construction is underway on a
production hall, a hangar for aircraft delivery, a logistics center and an administrationbuilding.

MAGDEBURG

DRESDEN
ALZEY
SAARLANDCRAILSHEIM

Source: GTAI, FDI-Database

Company

Location

Investment in €Industry

OriginIntel

Magdeburg

30 billion+

Semiconductors

US

TSMC

Dresden

10 billion

Semiconductors

TaiwanWolfspeed/ZF

Saarland2.5 billion

Semiconductors

US

Vishay Intertechnology Itzehoe

400 million

Semiconductors

US

Procter & Gamble

Crailsheim

130 million

Consumer goods

US

Lilly

Alzey

2.3 billion

Medical products US

NorthvoltHeide

4.5 billion

Batteries

SwedenSustainability on store shelvesInternational consumer goods companies arealso focusing on Germany as a location formodern, sustainable and, above all, innovative manufacturing and product development.
US company Procter & Gamble, for instance, isputting money into production facilities andlogistics centers in Crailsheim and Berlin.

9MARKETS GERMANY | Focus“Many of our innovations and branded products are ‘Made in Germany,’” says Gabriele Hässig, managing director of communications andsustainability at the subsidiary Procter & Gamble Service. “Pampers come from Euskirchen,
Braun razors from Walldürn and Oral-B electric
toothbrushes from Marktheidenfeld.”At the same time, the company is researching new approaches in Germany “to advancethe transformation of industrial production
for more climate protection.” To this end, it
opened a new innovation center — the Product Supply Innovation Center (PSIC) — in the
Rhine-Main region in 2021. In close partnershipwith Germany’s renowned Fraunhofer Societyplans are being drawn up “to make our sites
net zero by 2040 and provide cross-industry
impetus for greater sustainability in production,” says Hässig.
Despite momentary high energy prices,
Germany has many strengths that are passed
on to manufacturing companies based there.

US-owned Deutsche Aircraft
wants to help usher in a newera of clean aviation with its
CO2-neutral, sustainable aircraft
production line in Leipzig.

“WE TAKE GREATPRIDE IN THE­CONSTRUCTIONOF OUR STATEOF-THE-ART AND
CLIMATE-­FRIENDLY
FINAL ASSEMBLY
LINE.”
Nico Neumann, COO Deutsche Aircraft

For example, Procter & Gamble is taking fulladvantage of Germany’s unique R&D environment, which includes extra-university research
institutes like Fraunhofer, the Max Planck Society and the Helmholtz and Leibniz Institutes.

“This was also a basis for the decision to locate
the PSIC in Germany,” says Hässig, adding thatthe location offers “well-trained employees
and, last but not least, proximity to other companies with a deep technological understanding of industrial production and mechanicalengineering.”
Such powerful endorsements are music tothe ears of Germany’s Minister for Economic
Affairs and Climate Action. “We want to maintain Germany as a strong industrial location in
all its diversity,” Robert Habeck said recently, inthe context of international investment. “Fromglobal corporations to medium-sized hidden
champions and small businesses, and fromthe energy-intensive basic materials industry
to mechanical and vehicle engineering andaerospace.”

CONTACT
invest@gtai.de

Photos: Deutsche Aircraft

10

MARKETS GERMANY | Focus

GERMANY LEADS THE WAY IN MECHANICAL AND HIGH TECH­ENGINEERING TO SUPPORT THE ENERGY TRANSITION AND INDUSTRY 4.0
Germany’s undoubted manufacturing expertise, its location in the heart of Europe and its­commitment to the green transition give it an edge as a place to do business.

Expanding to Germany

Manufacturing Champion

FDI attractiveness of different countries
from an investor perspective (index)

Countries with the world’s most­competitive industrial sector

USA

2.314

CANADA

2.209

JAPAN

2.065

GERMANY

2.049

UK

2.035

FRANCE

2.028

CHINA (INC. HK)

1.898

SPAIN

1.886

SINGAPORE

1.866

AUSTRALIA

1.857

GERMANY

1

CHINA
REP. OFKOREAIRELAND

2

3

USA

4

Source: 2023 Kearney Foreign Direct Investment Confidence Index

5

Source: UNIDO 2023

Four manufacturing sectors with particularly good
growth prospects in Germany

SEMICONDUCTORSBATTERIESCLIMATE-NEUTRAL
MOBILITYROBOTICS /AUTOMATION

The demand for high-­
performance semiconductors
from German and European
industry is enormous.

With high sustainable production credentials, Germany
is Europe’s clear number one
battery production location.

The German automotive industry and the aviation sector
are investing big to advancethe transition to climate-­
neutral mobility.

Germany is striving for greater autonomy and resilience inindustrial production, which
requires highly automatedand smart, digital production.

11

IN BRIEF
The global business community admires the spirit of invention that drives theGerman economy. Here we highlight some of the most intriguing trends andresearch projects.

GREAT LEAP FORWARD

3.5M

The German government is investing big in quantum computing to usher in a new era of industrial innovation

Photo: thyssenkrupp Steel Europe AG

A visualization of the first
direct reduction plantusing green hydrogenfrom thyssenkrupp Steel.

The German government, along with the country’s leading scientific organizations, is putting EUR 3 billion into the development of quantum computers.
EUR 2.1 billion will come from the government with research societies likethe Fraunhofer Institute making up the difference. German start-ups will bemajor beneficiaries and are seen as crucial partners in the transfer of scientificfindings into industrial applications.
Anna Christmann, German Government Commissioner for Digital Economy
and Start-ups, and Government Coordinator of German Aerospace Policy,
says: “Quantum technologies, and quantum computers in particular, are a
key technology of the future with exciting potential applications — fromclimate modeling to drug development.”
www.qci.dlr.de/en/upcoming-industrial-partnerships

A cryogenic refridgerator
called a cryostat keeps
the quantum computer
chips cool at the Leibniz
Supercomputing Center.

Photo: picture alliance/dpa | Sven Hoppe

tons of CO2 emissions
will be saved annually on
2.3 million MT of pig ironproduced

CLIMATE-NEUTRAL STEEL
Steelmaker to decarbonize with green ­hydrogen
Industrial group thyssenkrupp Steel Europe is planning to use a groundbreaking
technique to power its steelmaking operations with green hydrogen.
Steel production heavily relies on fossil fuels and is therefore a major sourceof CO2 emissions, but the company is trying to change that. In the first projectof its kind, the Duisberg-based steel expert will build a hydrogen-powered
direct reduction plant with two downstream melters. Unlike the traditional
process, where pig iron is melted in a blast furnace using coal, thyssenkrupp
will employ hydrogen to reduce iron ore in a solid state, before converting it
into liquid pig iron in the melters.
The firm estimates that it can produce up to 2.3 million metric tons of carbon-­neutral pig iron a year using 140,000 tons of green H2, saving 3.5 million tonsof CO2 emissions. The new plants are expected to start operating in late 2026
and will be gradually converted to green H2 from 2028. The project, tkH2Steel,is being funded with EUR 2 billion from the German government and thestate of North Rhine-Westphalia. It will help Germany achieve its climate
targets and secure sustainable industrial jobs.
www.thyssenkrupp-steel.com

GTAI @ IFAT MUNICH 2024
IFAT is the world’s leading trade fair for water, sewage, waste and raw
materials management. Germany Trade and Invest will be taking partin this year’s IFAT on May 13–17 in Booth 138, Hall A5. We offer expert
advice and will be hosting discussion panelson the latest trends and innovations. You canfind more information at www.gtai.com

Photo: Adobe Stock/Sutadimages

Agricultural drones can beused not only for monitoring
crops and livestock but for
spreading water, fertilizer andeven seeds.

BANKING ON RECYCLING
close to motor industry hubs

Agriculture gets more sustainable and profitable using AI-based digital technologies

At the Hofgut Neumühle training center near Kaiserslautern in southwestern Germany, for example,
researchers and students from the Digital Farming
department at the Technical University of Kaisers­
lautern are testing innovative AI-powered agricultural methods. By helping farmers analyze data
and monitor animal behavior, intelligent algorithmsof EV batteries in the marketplace can be recycledusing Fortum’s technology

Battery recycling firm chooses location

DIGITAL FARMING

The farming sector faces major challenges from climate change, which is a growing cause of crop failuresaround the world, as well as the depletion of natural
resources and the decline in biodiversity. To tackle
these problems, scientists are exploring the potentialof artificial intelligence.

80%

can help make food production cheaper and more
eco-friendly.
“Hofgut Neumühle is a model for sustainable arable
farming and forage production and is also a contact
point for interested members of the public and experts,”
says Johannes Steinfort, head of digitalization and field
operations at the training center. The German Ministryof Food and Agriculture (BMEL) is investing EUR 70
million in 14 research projects across Germany to further
explore AI’s potential in crop and livestock farming.
www.hofgut-neumuehle.dewww.tinyurl.com/bmel-en

Finnish company Fortum Battery Recycling is planning a major new recycling center in Artern, near
Leipzig, in eastern Germany. The firm’s technology
makes it possible to recycle more than 80 percent
of EV batteries. Using an innovative process, mostof the battery’s black mass, which consists of rareearth elements and metals, can be returned to the
supply chain.
With its central location and close proximity toleading companies in the battery and automotive
industries, the Artern Industrial Park is an attractive option for firms in the sector. Tero Holländer,head of business line batteries at Fortum Battery
Recycling, says: “We see great potential in the Artern region and have already started talks with thelocal authorities about a development plan for the
production of black mass.”www.fortum.com

CARBON ­EXTRACTION
A Saxony start-up is raking in prizes
for producing environmentally usefulPhoto: LEAG

chemicals from CO2

Thorsten Kramer (LEAG),
Eric Dresselhuys (ESS) and acolleague hold their future:
an iron redox flow battery.

GREEN POWERHOUSESLong-term battery storage technology accelerates the transition to sustainable power
Electricity producer Leag has partnered with ESS, a US-based manufacturer of long-term energy storage devices. They’re installing a 50 megawatt (MW) iron redox flow battery with a capacity of 500MW hours in theeastern German town of Boxberg in the Lusatia region, close to the Polish border. The novel batteries are mainly
made of iron, salt and water, materials all readily available. They have a long lifespan and can store renewably
sourced electricity for up to twelve hours. “The key to transforming the Lusatian coal producing region into
part of Germany’s green powerhouse is the development of cost-effective long-term energy storage,” says Leag
CEO Thorsten Kramer. “We are proud to be able to demonstrate iron redox flow technology on a large scale.”Operations are expected to start in 2027.
www.Leag.de, www.Essinc.com

enaDyne, a spin-off from the Technical University
of Freiberg in eastern Germany, has built a plasma
catalytic reactor that converts CO2 into chemicals
such as methanol or ethylene as well as e-fuels.
“We are laying the foundations for a more environmentally friendly chemical industry,” says co-­founder Philipp Hahn. The company’s invention
won the Federal Agency for Disruptive Innovations’
Carbon-to-Value-Challenge, receiving just under
EUR 3 million. Its plasma catalytic reactor
was also awarded the 2023 IQ Innovation Prize Central Germany. Preparations are currently underway to test
the system in an industrial setting,and a pilot plant is expected to beup and running by the end of 2024.
www.enadyne.de14

MARKETS GERMANY | German Regions

N
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E
T
S
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H
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Y
R
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N RMA
E
Y
G
D

A
E
R

Since the oil embargo against Russia began,
the industrial areas around the Schwedt
and Leuna refineries as well as the port districts of Rostock and Greifswald/Lubmin
have undergone rapid change. Their economies were heavily dependent on Russianoil, but the government is now committed
to their green transformation. Why focus
on these four regions now?
MICHAEL KELLNER: We believe these regions
can become pioneers of the green transformation in Germany. Before Russia invaded
Ukraine, it was clear to many companies in
the northeast that the focus on fossil fuels had
no future. And since the Russian invasion of
Ukraine, this has become even more apparent.
All four of these industrial areas have accepted
this challenge and are now beginning to actively shape change. That’s why it’s so important

THE INTERVIEWEE
Born in 1977, Michael Kellner has been amember of the German Bundestag since2021. Since December 8, 2021, he has been
Parliamentary Secretary of State at the
Ministry for Economic Affairs and Climate­
Action, and since 2022 the German Commissioner for Small and Medium-Sized Enterprises. Between 2013 and 2022 he was politicalmanaging director for Alliance 90/The Greensat national level.

that the government supports them now. With
the right impetus, they can become role models
and thus also drive other regions in Germany
forward. We believe they can strengthen the
country’s ability to transform.
How is the government supporting green
transition in these regions?

MK: Until the end of 2021, Russia was Germany’s main supplier of oil. The embargo prohibiting imports of Russian oil therefore madevery high demands of Germany in terms of
maintaining the security of supply of this fuel,which is still vital to the population and theeconomy. The two eastern German refinerysites Leuna and Schwedt were facing major
challenges in this regard, because until the beginning of the war, they were fully and directly supplied with Russian oil via the D­ ruzh­bapipeline.
Against this background, the German national government is pursuing three objectives:maintaining security of supply in Germany,sustaining value creation and employment at
the refineries in the face of the negative effects
on the local economic structure caused by the
Russian war of aggression against Ukraine, andstrengthening the future viability of the sites.

MARKETS GERMANY | German Regions

15

In September 2022, in the interest of maintaining production and ensuring a successful transition, it launched a comprehensive
future package for eastern German refineries
and ports consisting of various structural andeconomic measures. At the heart of the future
package is a special program under the Joint
Federal/Länder Task for the Improvementof Regional Economic Structures (Gemeinschaftsaufgabe “Verbesserung der regionalen
Wirtschaftsstruktur” — GRW). As a central instrument of regional structural policy in Germany, the GRW is designed to initiate a wave
of modernization through private and public
investment based on its holistic approach —the promotion of corporate investments, thepromotion of business-related infrastructure,and further measures to strengthen the attractiveness of a region for business. In order toboost the transition locally, the area covered by

THE BOTTOM LINE
The German government is supporting four industrial regionsin their “green transformation”
with renewable energy supply,
infrastructure and a package of
support for key industries including refineries, engineeringand maritime logistics.

the GRW special program, which is to run until
2032 with a pot of EUR 750 million, includes
the districts where the Schwedt and Leuna refineries are located: Uckermark in Brandenburg, and Saalekreis and Burgenlandkreis in
Saxony-Anhalt (due to its close proximity to
Leuna). The city of Rostock, the Rostock district
and the Vorpommern-Greifswald district inMecklenburg-Vorpommern also form part of
the Assisted Area.
The Transformation Taskforce at Germany
Trade & Invest (GTAI) is also a part of the future
package and is supporting its goals. The Taskforce has analyzed the regions’ potential andis supporting the recruitment and settlementof international companies.
Can you give an example of the operational
challenges these regions are now facing?
MK: Let’s take the refinery in Schwedt, which
employs some 1,200 people. Immediately
after the Russian invasion, it was important
to ensure the refinery’s continued operation,
because if the refinery doesn’t run, it makes
losses and jobs are at risk. The government
has launched several parallel measures to support the facility. For example, it is planned that

Photos: gettyimages/Andriy Onufriyenko, Grüne im Bundestag/Stefan KaminskiWith four very favorable industrial locations well-served by green energy andgovernment funding incentives, the northeast is crucial to a carbon-neutral Germany, argues Michael Kellner, ParliamentaryState Secretary at the German Ministry
for Economic Affairs and Climate Action.

Photo: Fraunhofer UMSICHT

A model of a biorefinery: a sustainable alternative refinery whereplant biomass is broken down into
raw materials to be utilized in a wide
variety of products such as biofuels.

expanded significantly. In addition to the existing industrial park, more than 100 hectares
will be developed as an industrial area and ahigh-voltage power line with 380 kilovolts will
be built. Schwedt is therefore also perfect forcompanies that, on the one hand, need a lot of
space and, on the other, want to rely on green,
regional electricity.
And then the region around Leuna offers
chemical locations with excellent infrastructure. Bio-based chemistry and PET recycling
are future growth industries in the region.
Several international firms have alreadysettled in the regions. One example is Finnish firm UPM in Leuna — is this a good model for others to follow?

the pipeline from Rostock to Schwedt will be
upgraded and its capacity increased, and thisconnection to the port in Rostock makes it
easier to supply the refinery with oil. What ismore, the government has managed to use theDruzhba pipeline for other purposes. In thepast, Russian oil flowed through the pipeline
directly to Schwedt, but oil from Kazakhstan
is now flowing through it instead. The refinery
can also order additional oil via the nearby
Polish port in Gdańsk.
Why would foreign businesses be attracted
to these four regions?
MK: There are a whole lot of reasons! Let’s startwith the location. The existing industrial areas
will continue to grow in the next few years. Several hundred hectares of industrial space will
be added — including in Schwedt, Leuna, and
the Greifswald region, and attractive industrial
areas are being developed near Rostock along
the future ONTRAS hydrogen pipeline too.
Then there’s the transport side of things.
Many of the locations are particularly well connected. Goods can be transported directly fromthe factory by road, rail or water — a majoradvantage for mass production.
In addition, property prices in northeastern
Germany are cheaper than in the rest of thecountry. The regions benefit from well-trained,skilled workers, and there is great openness
to industrial projects. These regions are also
particularly attractive for businesses that want
to reduce their carbon footprint and rely on locally generated green electricity. Northeastern
Germany produces more green electricity with
offshore and onshore wind turbines and photovoltaic systems than is currently consumed
in the region.

What role do innovative technologies playin the regions?
MK: Besides green electricity and several large
industrial plants, the future technology of hydrogen will be a driver of innovation locally. A
hydrogen hub is currently being built in Rostock, and work is being done there on hydrogenproduction and distribution infrastructure. A
large plant for the production of green hydrogen is also planned in Lubmin.
At the same time, work is starting on a
900-kilometer hydrogen network in Germany. The lines will connect producers, storage
facilities and consumers of green hydrogen.
Put simply, the regions are ready for transformation, and are very attractive to international
companies that want to actively participate in
the energy transition and lead the way.

What kinds of companies do you think will
be drawn to these areas? Where are the big
opportunities?
MK: This depends on the location and the company’s plans. Port regions like Rostock are ofcourse attractive to all companies that produce
large volumes and want to transport their goods
quickly by sea. Besides manufacturers, the port
is also attractive for companies that want toparticipate in the new energy infrastructure
sector. In the Greifswald region and near Berlin,
conditions are ideal for companies that needa lot of space.
Schwedt, on the other hand, is a classic
refinery location, and its on-site equipment
is optimal for industrial projects. Companies
from the process industry in particular will findgood conditions here. Of particular interestis the fact that the Schwedt location is being

MK: Absolutely! The region and UPM will
benefit equally from the firm’s arrival there.
Leuna offers excellent conditions for biochemical companies, and UPM recognized this andis using the opportunity to build the world’s
first biorefinery. I see the decision as forward-­
looking. It creates additional value chains andoffers opportunities for local companies andthose that want to settle in Saxony-Anhalt in
the future. Leuna and UPM are working together to show what the chemical industry locationsof the future could look like.

How much research is being done locallyand by which institutions?
MK: Research institutions play a central rolein the transformation. There are already many
innovative companies in the northeast, andwe hope that even more innovators will settle
there too. But the technology centers of tomorrow can only be created in collaboration with
universities and research institutions. I am
therefore particularly pleased that the German
Aerospace Center (DLR) has chosen Leuna as acenter for research into power-to-liquid (PtL)
technology. Schwedt supports aspiring young
companies in their research and innovation
work. The start-up laboratory there is partly
funded by the Federal Ministry of Economic
Affairs and Climate Action, so we have an optimal R&D environment there.

CONTACT
verena.schueren@gtai.de
GTAI Director
Taskforce ­Transformation

MARKETS GERMANY | German Regions

OPPORTUNITIESIN THE NORTH­EAST
Germany’s industrial powerhouses in the east have been earmarked by theFederal Government for “green transformation” from renewable energy ande-mobility to maritime innovation, engineering and biorefineries for e-fuels.
SCHWEDTROSTOCK
Population: 429,000(Rostock district: 218,0004;
Rostock city: 211,0005)
Important economic sectors: maritime
industry, ship engine and mechanicalengineering, wind energy, food, electricalengineering/electronics, biotechnology,
medical technology

Greifswald
LubminROSTOCKVORPOMMERNGREIFSWALD

The city is located northeast of Berlin
directly on the Polish border and isa traditional location for refineries.
This makes it particularly appealing toentrepreneurs in processing sectors.
The area approved for industrial
development is being expanded significantly so that more companies cansettle there. Since the Russian invasionof Ukraine, the situation at the local
refinery has stabilized and delivery
routes have been diversified.

Rostock

VORPOMMERN-­
GREIFSWALD
UCKERMARK

Population: 236,0006

Schwedt

Important economic sectors: maritime industry, energy industry, healthservices, bioeconomy, food industry, information and communication industry,metal construction, tourism

BERLINSAALEKREIS,BURGEN­LANDKREISUCKERMARK
Population: 118,0001
Important economic sectors: energy
technology, paper industry, mineral oil
processing, transport/mobility/logistic,
metal, tourism, health industry

Schkopau
Leuna
Zeitz

LEUNA
The refinery in Leuna is also used toprocess Russian oil. Today, the chemical sites west of Leipzig are taking
a different path, and the world’s firstbiorefinery is being built in Leuna.
Leuna is also a research center forsynthetic e-fuels.

SAALEKREISPopulation: 188,0002
Important economic sectors: chemicalindustry, rubber and plastic goods,
mechanical and apparatus engineering,coking and mineral oil processing, metal
products

BURGENLANDKREISPopulation: 179,0003
Important economic sectors: coalmining, food and animal feed, beverage
production, chemical products, rubber
and plastic goods, mechanical engineering, metal products

Sources: 1) Landkreis Uckermarck, 2) Saalekreis, 3) Burgenlandkreis,4) Landkreis Rostock, 5) Stadt Rostock, 6) Landkreis Vorpommern-Greifswald

ROSTOCK,GREIFSWALD
AND LUBMIN
The port cities on the Baltic Sea are developing into the new energy hub of northern
Germany. There are plans to build anelectrolysis plant for producing climate-­
neutral hydrogen in the port of Rostock.
From there, hydrogen can flow directly tocompanies and consumers via a pipeline.
An LNG terminal is already in operation in
Greifswald. Attractive real estate for industry and commerce is being built south ofthe port locations in the interior, including
south of Rostock along Autobahn 19 and in
the Berlin-Stettin Industrial Park.

17

18

MARKETS GERMANY | Energy

PUSHINGSOLAR­PERFORMANCE

Photo: Fraunhofer ISE/Michael Schachtner

German research institutions are �extending the boundaries ofphotovoltaic cells, setting efficiency record after efficiency record.
This scientific excellence makes Germany one of the leadinginternational locations for photovoltaics.

The new III-V/silicon tandem solar cellfrom Fraunhofer ISE with 35.9% e­ fficiency.
The uppermost sub-cell glows red, a signof outstanding material quality.

MARKETS GERMANY | EnergyOn September 29 last year, researchers at the Fraunhofer Institute of Solar
Energy Research (ISE) in the southern German city of Freiburg had reason tocelebrate. Together with colleagues from theDutch NOW Institute AMOLF, they set a newsolar cell efficiency record of 36.1 percent with
their novel multijunction cell based on siliconand special semiconductor materials. To putthat achievement into perspective, a typicalefficiency rate for silicon-based domestic solar
panels is 15 to 20 percent.
Fraunhofer ISE is globally renowned for its
achievements in the field of solar photovoltaics(PV); and for the last two years, the institute has
been working on an ambitious project called
50 Percent, funded by the German Ministry forHigh hopes for perovskite
Silicon is not the only solar material in focus.
Researchers around the world are working on
new types of crystalline cells made from themineral perovskite. Perovskite is the mostpromising frontrunner in solar research, as
the cells achieve efficiency levels similar tosilicon solar cells, but can be produced morecost-effectively and easily.
At the HZB, a team of researchers has
succeeded in increasing the efficiency of perovskite solar cells to a particularly high level —from an initial four percent to almost 33 percent. This was achieved in a relatively shortperiod for research of 13 years. “We have beenable to set these efficiency records because westarted researching perovskites very early on
and covered the entire value chain from basic

Economic Affairs and Climate Action. It aims
to develop the first solar cell with 50 percent research to industry,” comments Professor
efficiency.
Rutger Schlatmann of the HZB.
At the end of May 2022, using a new anti-­
Innovative PV solutions are also beingreflection coating, Fraunhofer researchers in- researched in southeast Germany. Karl Leo,creased the efficiency ofprofessor at the Dresden
four-junction solar cells
University of Technoloto a record 47.6 percent.
gy, is pioneering a new
THE BOTTOM LINE
“We are thrilled with
type of organic solar cell
Highly innovative institutes
this result, which wascomposed of carbon-richand efficient knowledge
achieved only one year
compounds that can betransfer to industry makeafter the opening of ourused in settings where
Germany a center of phonew Center for High Efconventional silicon cells
tovoltaic research. The
ficiency Solar Cells,” said
are unsuitable. Flexible
installed PV capacity of
Fraunhofer ISE departorganic thin-film solar
the country is growing at ament head Frank Dimtechnology could berecord pace.
roth in a statement. “In
mounted on contoured
our research, we aim to
moving objects such as
make concentrating phocars or airplanes, for extovoltaics even more efficient and competitive, ample, and wrapped around objects like pillars.
as we believe that this is the most sustainable However, organic photovoltaics (OPV) is still
form of renewable electricity generation.”a niche technology and has a long way to go
Fraunhofer ISE is not Germany’s only in terms of efficiency. “In the long term, it hasrecord-breaking PV research institute either; the potential to match the performance of conthere’s also the Helmholtz-Zentrum Berlin ventional silicon technology,” explains Leo.
(HZB), the Karlsruhe Institute of Technology
Thanks to research in Dresden, Germany
and the Forschungszentrum Jülich. “The effi- leads the way in OPV. The German start-up
ciency records of German research institutes Heliatec, for instance, is the first company inare remarkable and demonstrate a unique pho- the world to manufacture organic solar cells
tovoltaic expertise,” says GTAI energy expert in series production.“Because we hold theMaja Grunert.
patents, we can ensure that the novel solar
This vital solar energy know-how is then cells are manufactured here in Germany,”transferred to industry through commercial Leo says.
solar networks including Solarvalley Central
Germany and Solar Cluster Baden-Wurttemberg. The high level of investment in solar
R&D shows how well this model is working.
CONTACT“Investment in photovoltaic research and development in Germany has more than doubled
maja.grunert@gtai.desince 2013,” says Grunert.
GTAI solar expert

GERMAN GOVERNMENTDRIVING PACE OF SOLAR
EXPANSION

MORE
THAN
1M
Number of new solar installationsin Germany in 2023

14 GW

Output of new solar installationsin Germany in 2023

80 %Increase in demand for PV systems
in Germany

Source: Bundesverband Solarwirtschaft BSW

19

MARKETS GERMANY | Energy

MAKINGGERMANYHYDROGEN-­READY
THE INTERVIEWEE
Bastian Olzem is division manager of the Generation and System
Integration Division at BDEW, theGerman Association of Energy andWater Industries.

Germany is to build a newgeneration of hydrogen-­powered and hydrogen-readypower plants. The plans,announced by the German
government in August 2023,
will require multibillion-­euro
investments and should start
as soon as reasonably possible, argues Bastian Olzem
from the German energy
industry association BDEW.

Why are hydrogen-powered power plants
so important for Germany’s energy future?
BASTIAN OLZEM: Germany has a clear roadmap for phasing out coal-fired power generation. However, when coal-fired power plants gooffline, we will continue to need flexibly controllable power plants for the foreseeable future to keep the grid stable. Hydrogen-­powered
facilities can make an important contribution
here by compensating for the drop in renewableenergies at times when the wind doesn’t blowor the sun doesn’t shine.
The government is drawing up a power
plant strategy to promote and accelerate
the development of hydrogen power plants.
What does that involve?
BO: The current plans envisage three building
blocks. The first concerns “hydrogen sprinter”
power plants — gas turbines that run on greenhydrogen. The second group is “hydrogen hybrid” plants: innovative generation concepts
where, for example, solar and wind farms areequipped with an electrolyzer that converts
excess electricity into hydrogen (H2). The gas

can temporarily be stored and converted into
electricity for feeding into the grid as and whenrequired. These two components are intended
to create controllable generation capacities of
4.4 gigawatts (GW) each. The tenders shall becompleted by 2028.
The third component to be put out to tenderis the construction of “H2-ready power plants,”
with a total of 6 GW of newly built capacity. In
addition, there are existing power plants thathave been earmarked as suitable for conversion, which are expected to produce an additional 4 GW. From 2026 onwards, another 5 GW
could be added, if required.
These are ambitious goals and the timeframe is tight. What size of investment anddeadline are we talking about here?
BO: The investment requirement for the power
plants alone is likely to be in the range of tensto approximately hundred-billions of euros.
The planning and construction of such power
plants takes four to eight years, depending on
the location and technology, so the tenders
must therefore be made as soon as possible.

Photos: picture alliance/dpa/Jan Woitas, BDEW

20

21

Germany’s first hydrogen-ready power plant
went into operation on 23 October 2023 in
Saxony. The pump hall for district heating in the
new CHP plant (pictured) has two gas turbines
capable of burning hydrogen, each with anelectrical output of 62.5 MW, while a huge hotwater storage tank holds 43,000 cubic meters ofwater for piping to the city of Leipzig.

BRUSSELS AND BERLIN­SUPPORT POWER PLANT­STRATEGYThe German government’s planned power
plant strategy is a behemoth of a project thatserves as a role model for restructuring theenergy supply throughout Europe. The goal
is nothing less than the climate neutrality ofthe entire electricity sector, which is beingsought not only in Germany but also at theEuropean Union (EU) level.
The European Commission is therefore closely
involved in the German government’s planning. During intensive negotiations with theEuropean Commission, the Federal Ministry
for Economic Affairs and Climate Action(BMWK) laid the foundations for ensuringthat funding for power plant construction
also complies with EU aid law.
“The main pillars of decarbonization are renewable energy, flexibility in the system andstorage, but also controllable power plants
for a few hours of the year. The conversion
and decarbonization of the fossil power plant
fleet is therefore the next key step,” said Robert Habeck, German Minister for Economic
Affairs and Climate Action in summer 2023.

But that’s not all. There will also be a need forfurther investment.
Where do these additional opportunities
lie?
BO: In order for the power plants to be able tofulfill their task, the development of infrastructure for the production and transportation ofgreen hydrogen must also be promoted at thesame time. Hydrogen networks, intermediatestorage, electrolyzers and large-scale storage
are needed. There will be plenty of scope inall these areas for manufacturers of the relevant technologies, consultants and suppliers.
Electrolyzers are one of the key sector couplingtechnologies.
What is “sector coupling” and what technologies does it require?
BO: Sector coupling aims to interlink different energy consumption sectors and thereby
increase the use of renewable energies throughout all sectors. For example, it’s about ensuringthat electrical energy from the power grid canbe used in the transport sector or to provide

heat, which allows energy to be used much
more efficiently and flexibly. To make this possible, we need many new power-to-gas systems
and power-to-heat systems for direct electricuse as well as heat pumps for the integrationof environmental heat.
Is the new government strategy enough forcompanies to start pinning investmentson?
BO: The government’s power plant strategy sets
the framework conditions and should provide
the planning security that companies in this
sector are currently waiting for. It is an initial
spark for investments and will result in wider
expansion and conversion steps in the energy
system. A wide range of investment opportunities are emerging for companies and investors,
including those from abroad: from electricity
generation plants to power plants, electrolyzers
and power-to-heat systems.
What further developments should international investors keep an eye on?
BO: A crucial question for the conversion

He added: “It is therefore all the more important that we have defined the framework forhydrogen power plants with the European
Commission.”plans is about when sufficient quantities of(somewhat environmentally friendly) blue and(completely climate-neutral) green hydrogen
will be available, and at what price. This is particularly important given that the hydrogen
power plants built today will have fewer andfewer hours of use as renewable energy generation, storage and transport networks expandin future. Models are therefore needed to determine how prices for blue and green hydrogen
will be set and how the flexible performanceof hydrogen power plants will be rewarded. To
that end, various fuel funding models are currently being discussed in Germany and Europe.

CONTACT
heiko.staubitz@gtai.de
GTAI hydrogen expert

22

MARKETS GERMANY | Technology

PRINTINGSUSTAINABILITY
Additive manufacturing — a.k.a. 3D printing —can help manufacturing companies conserve
resources and save costs. So it’s a perfect fit asGermany looks towards a sustainable future.

Photo: Quelle: EOS | Anwendung: RUAG

A 3D-printed antenna bracket prototype
for the Sentinel 1 satellite. The Technical
University of Munich (TUM) together
with Oerlikon and Linde have developed
aluminium-based light metal alloys foruse in aerospace and automobiles.

S

ustainability is everywhere in Germany — not only on the ground but inthe skies above.
Satellite manufacturer Airbus Defence andSpace, for example, needs to make its products
smaller and lighter while increasing functionality. To do that, ADS works with Oerlikon AM,
a German subsidiary of the Swiss technology
group Oerlikon, which specializes in additive
manufacturing.
Oerlikon develops and builds antennacomponents that weigh 90 percent less than
traditionally manufactured parts, thus saving
on fuel needed to transport them into orbit.
Additive manufacturing also makes production
more energy efficient and reduces consumption of raw materials. The company maintains
a site in Barleben near the eastern German cityof Magdeburg.

“Germany is a very good location for AM applications,” explains Hendrik Alfter, Managing
Director of Oerlikon AM Germany. “The manufacturing industry is a particularly strong German sector with a strong focus on high-quality
and high-value products. The proximity to ourcustomers is, therefore, an important location
advantage.”

THE BOTTOM LINE
With its history of manufacturing and increased focus onsustainability, Germany is aprime location for international
additive manufactuing companies looking to expand.

AM technology supports sustainability by helping companies shorten transport routes. “The
more intermediate products and components
can be manufactured using AM, the less often
these parts have to be transported over long
distances,” says Dr. Prof. Ing. Kristian Arntz,
Chair of Manufacturing Technology and Machine Tools at Aachen University of Applied
Sciences. “It also gives industrial companies
greater control over the supply chain and reduces risks.”
A big and expanding market
The German government’s prioritization of sustainability is creating a market for sustainable
AM applications. Part of the German economics
ministry’s remit, after all, is climate action.
“The topic of AM is becoming even more ofa focus in Germany,” says Peggy Görlitz, senior

MARKETS GERMANY | Technology

23

FDI PERSPECTIVE:
THE TUM-OERLIKON AM INSTITUTE
The close collaboration between universities and theprivate sector in Germany is a big location advantage
In 2022, in partnership with the Technical University of Munich (TUM), the Swiss company Oerlikon AM launched the
TUM-Oerlikon Advanced Manufacturing Institute in Garching near Munich. At the new facility, nearly 80 Oerlikon
professionals and TUM counterparts pioneer advanced
manufacturing technologies. The Swiss manufacturer has
committed EUR 7.5 million to this collaboration for the first
five years of the project. Equipped with an overall annual
budget of EUR 3 million, the institute researches both processes and materials. One focus is on the powders used in
3D printers to produce metal components. The process ofmaking these powders is currently very energy intensive,
and the institute intends to change that. It’s one way ofmaking 3D printing more sustainable.

COMPANY
Oerlikon AM

project manager for Automation and Robotics
at Germany Trade & Invest (GTAI). “This makes
Germany increasingly attractive as a location
for internationally active AM companies. And
more and more companies are focusing on sustainability.”In the year 2022, AM solutions in Germany
generated around EUR 2.1 billion of revenue —a 17 percent increase compared to 2021. Such
growth levels have attracted business expansions from all over the world in recent years,
led by companies from the US, China, France
and Switzerland.
Research excellence
Such companies find no shortage of researchand development partners. Germany has beenat the forefront of scientific R&D in the field
for a long time. Take alloys, for instance. AM

printers can make components that previously
required expensive metals, such as cobalt, andconventional production methods. But now,
ferrous alloys based on cobalt and silicon canbe used instead.
“In this way, companies can save resources
and reduce costs,” explains Arntz.
Germany’s unique landscape of practicallyoriented research institutes that operate outside of the university system is at the heart ofthis development. Institutes like the Fraunhofer Institute for Additive Manufacturing(IAPT) and the Fraunhofer Insitute for Laser
Technology (ILT) specialize in various aspectsof AM and offer a host of exciting opportunities
for companies.
“In Germany, research institutes and companies continue to work together to develop
innovative solutions,” Arntz says.

LOCATIONS INGERMANY
Barleben, Garching

NUMBER OF
EMPLOYEES
148 in Germany

CONTACT
peggy.goerlitz@gtai.demarie-christin.menke@gtai.de
GTAI experts for Mechanical &Electronic Technologies

24

MARKETS GERMANY | Technology

THE FUTURE
OF LEARNING
AI applications are transforming the educational landscape around theworld. Europe and Germany have been slow off the mark, creating a clear
opportunity for solutions from international providers.

Go to a classroom in one of Germany’sroughly 32,500 schools, and you’ll
find lots of highly qualified instructors and various teaching aids. What you won’t
find, however, is potentially one of the mostuseful tools of all: artificial intelligence. That’s
a situation Thomas Schmitt, senior AI expert
at Deutsche Telekom Foundation, wants tochange.
“AI solutions are currently underutilized inclassrooms and schools in Germany,” Schmittsays. “This might be changing soon, especiallywith applications that will likely be developed
for concept-based learning as well as segments
outside of purely cognitive abilities.”
Schmitt’s foundation supports education,
research and technology projects. In their recent report “AI@Education,” which comparedglobal research and product development activities, they found a strong correlation between technological developments in a country
and the willingness to use AI for education
purposes. In the US and China, the adoption of
AI in education has been pretty dynamic, but
Europe lags behind. For instance, Germany
only has only a few silo research projects andmarket-established applications in this field.
This suggests there’s considerable developmental potential for AI-supported learningtechnologies at every level of primary and secondary education in Germany. For example,
data mining and analytics can help optimize
processes such as evaluation and school planning. In classroom teaching, AI can enable new
methods of assessment, grading, tutoring andclassroom management. Smart learning applications can allow for more personalized

formats and integrate assistance systems.
AI is also useful for automated predictions,performance assessments and learning re­commendations.
The future is now
Demand for machine learning, natural language processing, automatic speech recognition, learning analytics and educational data
mining in German schools is highly likely togrow in the long term. But right now, it is intelligent tutoring systems that are, in Schmitt’s
words, “a particularly promising growth area.”
They include applications like China-based

THE BOTTOM LINE
The use of artificial intelligencein German education is stillin the kindergarten stage, so
there’s lots of potential androom for international companies with innovative solutions.
Squirrel AI Learning, which simulates humanpupil-teacher relationships by giving students
personalized learning plans and tailored oneon-one tutoring.
As many advanced countries struggle witha shortage of education professionals, these
services provide an important ancillary function. Germany currently needs at least 14,466
additional teachers, and as many as one in five
students are considering after-school tutoring,according to a survey conducted by German
provider Studienkreis. Automated assessment

could prove to be a big help in monitoring students’ learning behavior.
Hypermind, a project by the German Research Center for Artificial Intelligence (DFKI)
and the University of Kaiserslautern-Landau,
has developed an intelligent database thattracks and analyzes students’ eye movements
in order to identify learning difficulties andpersonalize their learning process.
Another growth market to watch is adaptive learning and recommendation systems.
Cloud service providers, such as Watson Education Classroom, help teachers deliver adaptive learning to improve student outcomes.
Educators can search and share learning
content, including lesson plans, tests andworksheets.
“Learning software that adapts to students’
individual needs is gaining importance in Germany,” says Kiana Frank, manager for Trend
and Innovation Scouting at GTAI. “The demand for online learning platforms is growing
steadily, especially due to the changes in the
education landscape caused by the COVID-19
pandemic.”
Challenges and advantages
Germany and the rest of the EU have far stricter
data protection laws than China or the US. Thatmakes development more complicated but also
brings competitive advantages. Applications
developed in the heart of Europe have a far
greater chance of conforming to standards allover the world. Collaborating with institutions
like the DFKI is a great way of gaining insights
on how to develop AI that stays within European rules and regulations.

MARKETS GERMANY | Technology

Photo: picture alliance/dpa/Waltraud Grubitzsch

Students at Leipzig University’s
Center for Teacher Education and
School Research create a video
explainer about rainbows in aclassroom full of smart technology.

Education is the responsibility of the 16 regional states that make up the Federal Republic of
Germany. Educational institutions use publictendering procedures, so AI application providers must go through a public procurement
process to win contracts. The system is designed to be fair and provide opportunities
for all companies wanting to enter the market.
The lack of central directives and a convoluted tendering process can complicate entry
into the education market in Germany. On theother hand, companies that master these complexities will find themselves well positioned
to exploit the growing demand in the sector,
and ultimately to shape the future of learningin Europe’s largest market.

CONTACTasha-maria.sharma@gtai.de
GTAI expert for AI

GERMAN EDUCATIONIS A REGIONALRESPON­SIBILITY
The architects of the Federal Republic of Germany in the late 1940s
were keen on ensuring that no one political party or entity would havecomplete control over education, so they devolved that responsibility
to the 16 regional states. This allows decisions to be made close to theplace and the people affected.
The German constitution outlines which compulsory subjects and standards the federal government is responsible for through the Standing
Conference of Ministers of Education and Culture (KMK). Meanwhile,
the application of those standards and subjects in school and higher
education settings is largely left to the regional states. For example, national standards are set for German and mathematics in primary school
and for German, mathematics, foreign languages and most STEM subjects in secondary school. However, the states are given considerable
freedom to set their own general curricula, design their arts subjects,
sports and general studies, and to choose their own content, objectives
and teaching methods.
This separation of tasks between the KMK and the regional states works
well because it allows for cooperation between national and local governments and plays to their respective expertise.

25

MARKETS GERMANY | Technology

A SMART PLACE
TO SET UP
DIGITAL TWINNING
OF THE BUILT­ENVIRONMENT
When Felix Reinshagen and his fellow co-founders chose Munich as alocation for their AI venture NavVis,
they were going against the grain.
“Many people told us it would be to better to set up our company in Silicon Valley, mainly in order to get better access
to VC investors”, Reinshagen recalls. He
chose to ignore those arguments — forthree good reasons.
“Firstly, we had close ties here with ouralma mater, the Technical University of Munich,” he says. “This gave us
access to top people from the university and the research institutes, evenin the early development phase.” Se­
condly, the proximity to customers in
the manufacturing industry and large
building operators was crucial in developing the company’s solutions. Thirdand finally, the start-up found international investors who were willing toinvest in Munich. Business angel andprominent Silicon Valley investor Don
Dodge opened doors for the start-up to
investors who recognized the potentialof the B2B company.
NavVis supplies spatial data and digitaltwin software to service providers andenterprises seeking to create photo­
realistic digital twins of their built

environment. It uses something called“reality capture technology” and its
digital factory solutions increase organizational operability, productivity,
agility and profitability. “Our investors
see the potential that lies in our patentportfolio and in our clear focus on engineering and industrial applications.”

You don’t need to be based in
Silicon Valley to find success as
an artificial intelligence start-up.
Germany has a few exceptional
locational advantages that are
making global investors sit up andtake notice. Here are two of its
success stories.

NavVis VLX 3 is a wearable mobile
mapping system that delivers reality capture data to laser scanning
professionals for complex sites.

More strategic investors, including theJapanese company Kozo Keikaku Engineering (KKE) and European venture
funds CIPIO Partners, Yttrium, MIG,
BayBG and Targetpartners, have comeon board. And NavVis’s solutions haveattracted a pool of large and medium-­
sized corporate clients in Europe, US,
China and Japan.
The company now operates in New
York, Los Angeles, Shanghai and Birmingham. Despite these successes,
Reins­hagen is the first to recognise that“the starting point for our success wasclearly Munich.”
COMPANY NAME NavVis
HEADQUARTERS Munich
PRODUCT/SOLUTION Reality capture
technology (photorealistic digital
twins of built environment)
CEO Felix Reinshagen
FOUNDED May 2013www.navvis.com

Photo: NavVis

26

MARKETS GERMANY | Technology

27

A TWAICE technician prepares
batteries for testing using their AIsupported analytics plaform for
improving energy storage design.

When asked why he founded his
company in Germany, TWAICE CEO
Michael Baumann replies: “Excellent universities, many young international talents and successful
manufacturing industry companies, especially from the automotive industry. We found everything
we needed for a successful launch
here.”

ONE-BILLION-EURO ­GERMANVC GROWTH FUND
Venture capital is a central pillar of the German
government’s plans to support innovative young
companies. At the end of 2023 the Ministry for
Economic Affairs and Climate Action (BMWK)
announced that its public–private initiative
called Growth Fund Germany (Wachstumsfonds
Deutschland) had reached its ten-digit target.
Established to accelerate the financing of startups and technologically innovative firms, it’s now
one of Europe’s largest venture capital funds
and is backed by the national government, thestate economic bank KfW and more than twenty
institutional investors, including insurance andwealth management companies.
“With significant participation of many private
institutional investors, we were able to swift
reach our goal of one billion euros,” said Minister
Robert Habeck in a statement in November.
“It speaks to Germany’s strength as a businesslocation that the Growth Fund Germany hasreached that goal in a difficult macro-economic
environment. The first investments have been
made so that part of the fund is already having
an effect on the venture capital market.”cal decision-­making is backed up by
rock-solid data,” he says.
Despite the challenging global economic environment in recent years,
TWAICE has been able to grow andopen additional locations in both Parisand Chicago. “We want to establish ourselves, here in Germany, as the world
market leader for battery analytics
software,” Baumann says.
This confidence convinced his inBaumann has developed an AI-­ vestors, including the New York-based
supported battery analytics platform to investment firm Coatue. “International
help improve battery and energy stor- investors see Germany, as we do, as anage system design. Due to the current important engineering and deep-techboom in electromobility and the trend location with good growth prospects,”
towards climate-friendly technology, says Baumann.
there is a great demand for TWAICE’s
For companies coming fresh to theservices.
field of battery technology research,
For example, its AI-powered soft- access to young talent is particularly
ware enables companies to analyze the important. Germany’s excellent edu­
condition of lithium-ion batteries in cation and university system offers
electric vehicles in real time and pre- very good conditions to source thedict their lifespan. That means they right talent. “That’s why we also train
can optimize technical parameters to our own experts, in close cooperation
extend battery life.
with universities and research instiTWAICE connects sensor and phys- tutes, so that we can continue to grow.”
ical data (as well as data-driven battery This year, TWAICE hopes to take onmodels), which enables it to close the board more investors to continue its
loop between product development impressive growth trajectory.
and application, but also to create newservices like predictive maintenance.
COMPANY NAME TWAICE
Baumann predicts there will be HEADQUARTERS Municha “battery supercycle” that will fun- PRODUCT/SOLUTION AI-supported batdamentally change the entire value tery analytics platform
chain. “We believe the transforma- FOUNDED 2018tion to a battery-powered world willreach maximum impact when criti-

Photo: TWAICEBETTER ELECTRIC
BATTERY ANALYTICS

28

MARKETS GERMANY | Technology

Kerstin Rohde advises public and privatecompanies in EU state aid law, grant andsubsidy law at PwC. She specializes inregional and R&D subsidies, Important Projects of Common European Interest (IPCEI),
SGEI and public infrastructure projects.

Photo: PwC/Kerstin Rohde“We need
IMMENSE­INVESTMENT.”

To achieve its goal of becoming climate neutral, Germany must build andexpand production capacity for strategically important transformation
technologies. Kerstin Rohde, a specialist in EU state aid law and subsidies
at PwC Legal, explains how international companies based in Germany
can obtain public subsidies for their projects.

MARKETS GERMANY | Technology

TCTF UNPACKED
Companies based in Germany can bene­
fit from government funding allocatedfor transformation technologies. Can you
tell us more about this initiative and what
potential applicants can expect?
KERSTIN ROHDE: Before the German Federal Constitutional Court’s decision reversing
the allocation of EUR 60 billion in pandemic support funds to Germany’s Climate andTransformation Fund (“KTF-Judgment”) on
November 15, 2023, the German government
had budgeted around EUR 3 billion by the endof 2025 for funding companies that invest in
the development of climate-­friendly technologies in Germany. The EU has established alegal framework for this called the Temporary
Crisis and Transition Framework (TCTF) thatwill enable member states to grant large subsidies under relatively simplified conditions.
But individual states must first create the rightlegal structures and funding programs to grantsupport to local companies.
What’s the current investment funding
situation like in Germany, where private
investment is match-funded by the government?
KR: The federal funding directive to strengthen
the battery value chain publicly announced
on September 25, 2023, is a good example ofthis — where the development of capacities forthe extraction, further processing and refinement of battery raw materials, among otherthings, will be subsidized. To make the economy climate neutral, we need immense investment into building and expanding production
capacities for transformation technologies. In
this respect, investment funding is a good firststep. However, November’s KTF-Judgment has
led to considerable uncertainty regarding theinvestability of such projects. Nevertheless, thetransition towards a climate-neutral economy
and society remains a priority for Germany.
The announced funding for Northvolt in Heide(Schleswig-Holstein) is a good indicator forthat.
What are the key data here?
KR: A maximum of 15 percent of the qualifying
corporate investment is funded, up to a ceilingof EUR 150 million per company. In certain
parts of Germany, known as assisted areas, asmuch as 20 percent and up to EUR 200 million
are achievable.

At the beginning of the war in Ukraine, theEuropean Commission (EC) launched a legal framework to enable member states tocushion the impact of the energy crisis — theTemporary Crisis and Transition Framework(TCTF). It sets out the conditions under whichinvestments in EU countries could be supported to reduce the EU's dependence on
fossil fuels. In March 2023, the framework
was expanded to include subsidies for certaintransformation technologies.
The transformation of Europe's energy system is urgently needed in two respects. On
the one hand, it will end the EU's dependence
on fossil fuels from Russia, which — as the EC
puts it — are used as an “economic and political weapon.” On the other, the transformation
contributes to tackling the climate crisis. So,
extending the aid scheme to include transformation technologies is the next logical step.

€ 3B
climatetech fundSource: BMWK

When will the funding start?
KR: Given the KTF-Judgment, the government
and the federal states will have to agree whichbudgets or initiatives the funds are allocated to,and they must do this as quickly as possible, as
the TCTF framework only runs until December
31, 2025. All funding must be granted by then.
Some funding has already begun, as theNorthvolt example shows. The federal funding directive to strengthen the battery value
chain and the procedure laid out here serves
as a template for future funding. Companies
were obliged to submit their projects for funding under this initiative by the beginning ofNovember for an eligibility assessment. As oftoday, there are no explicit consequences of
the KTF-Judgment affecting funding for thisinitiative. Ultimately, it’s the projects that are
strategically important for Germany as a business location that will get funded.
And what if the demand for grants greatly
outstrips the amount of funding available?
KR: Because the funding is limited, only projects that meet the funding criteria are considered. The funding body specifies the criteria,such as the economic feasibility of the project
or its unique contribution to securing the value
chain. Projects that are not selected can also
apply for funding from other programs (assuming the government continues to run themafter the KTF-Judgment and the new budget).
Depending on their economic importance andalignment with political goals, it’s certainly
possible that there will be additional funding
opportunities for transformation technologies
at the federal and state level. As I mentioned before, the transition towards climate neutrality
is likely to remain one of Germany’s top goals.
Are there any other rules that apply specifically to international companies operatingin Germany?
KR: As with all funding from the Federal Republic of Germany, you must maintain a subsidiary
under German law with its registered officein Germany. After all, German or EU subsidies are designed to benefit the country, andnot flow into a company that is only on themarket here for a short time, rakes in subsidy
money and then disappears back abroad aftera few months. That’s why it’s standard practicethat subsidy guidelines contain an earmarking
clause which says anyone who receives a subsidy agrees to stay here for five years. As a rule,
however, this is only a formality, because we aretalking about a pro-rata investment subsidy of
15 percent. The company has to shoulder the
rest on its own. Ultimately, if you set up an
operating facility and invest tens of millions
yourself, you’ll be in it for the long run.

CONTACTmichael.schnabel@gtai.de
GTAI expert for financing

29

30

MARKETS GERMANY | Manufacturing

A HANDY­BUSINESS­LOCATIONI

n November 2023, skilled tradesman andspecialist craftsmen from all over Germany
gathered together for a unique event —the Deutsche Meisterschaft im Handwerk or
German Craft Championship. It’s the biggest
awards ceremony of its kind in Europe and a
testament to how highly the trades are valued
in the Federal Republic.
German President Frank-Walter Steinmeier was on hand in person to congratulate thewinners across all the different categories —from metalworkers, technicians and heating
engineers to carpenters and bakers.
While Handwerk is steeped in history, thesector is anything but a relic. It still forms acentral branch of the economy. After all, theapproximately one million trades firms inGermany generate turnover of some EUR 730
billion per year.
Over 130 professions make up the highly skilled Handwerk sector, spanning a wide
range of industries and disciplines. In addition to the trades named above, the category
includes bricklayers, roofers, mechatronics
engineers, garden designers, chocolatiers andhairdressers.

“Companies from Germany and abroad ­value

gent quality control. “This provides a kind ofthese trade specialists as proven suppliers andservice providers,” says Michael Olma, expert
for foreign economics at the German Confederation of Skilled Crafts (ZDH). The Handwerk
sector, he says, has an international reputation for high quality and an ability to provide
pragmatic and creative solutions to complex
technical problems.

a guarantee of expertise for anyone hiring a
German craft professional,” says Olma.
If you want to work as a carpenter, electrician or car mechanic in Germany, you mustfirst pass through a rigorous dual vocational
training program. Apprentices complete athree-year course, with one year spent in a
training school learning about the theoretical foundation of their future trade, then two
years getting further training and practicalexperience at a company.
Trainers must be certified by the Chambersof Crafts and Trades. The chambers monitor
the quality of instruction and check that apprentices have necessary skills. At the end of
their training, all aspiring tradespeople must
pass demanding examinations before they canseek employment.
Professional development doesn’t have toend with the apprenticeship either; tradespeople can continue to get new qualifications andadd to their skill set. If they go on to pass higher
exams, they can become “master craftspeople”
This qualification is crucial for tradespeople
looking to set up a licensed business: 53 skilled

Dual vocational training system
Olma argues that Germany’s approach totraining for the trades is unique. That’s because training in technical and skilled trades
is strictly regulated and associated with strin-

THE BOTTOM LINE
Germany has a tried-and-­tested
system of tradesmanshipunique in Europe. That’s a hugebenefit for international companies setting up in Europe’s
largest economy.

Photo: Heiko Specht/laif

The skilled trades and craft sector — or Handwerk as it’s
known in Germany — is a unique, tried-and-true branch of
the country’s economy — and an invaluable resource forbusinesses setting up in the heart of Europe. So what’s behind
this very German sector and idea?

31

MARKETS GERMANY | Manufacturing

Otmar Ternes, the owner and MDof the Limbach Maschinen company in Mendig, Rhineland-Palatinate, in western Germany, often
has to explain to internationalcustomers what the term ‘Hand­
werk’ actually means. His company
manufactures specialized machines
and systems for companies in theconveyor and process engineering
sector. Many of Limbach’s customers assume the firm is an industrial
manufacturer rather than a traditional craftsmanship business.
The boundaries between engineering and tradecraft are often fluid in
Germany. Ternes and his company
deliver customized products forcompanies in sectors with particularly high demands, such as power

plant operators, steel construction
companies and factory owners.
“For me, Handwerk means above
all that the owners completely
stand behind their products andservices and ensure that everything runs smoothly,” says Ternes.
“Handwerk means one hundred
per cent reliability, around theclock, if necessary.”
His customers — mostly large
industrial
groupsfrom
theCzech Republic, Switzerland andAustria — certainly appreciate
Limbach’s dedicated approach. Internationalism is also part of thecompany’s culture. For importantcustomers like the chemical company Bayer, his craftspeople often
travel as far afield as Shanghai.

Photo: Limbach

WHERE TRADECRAFT MEETS INDUSTRIAL­ENGINEERING

When shipping companies contact Frank Geimer, owner of theshipping carpentry firm Weingarten, with an order, time is of theessence. The skilled tradespeople
at his factory workshop in Hersch­bach in western Germany modernize and restore boat interiors forshipowners from all over the world.
“Winter is peak season for us,” explains Geimer, since many shipping
companies take a winter break fora few weeks. This is a particularly important time for cruise ships,
which must be serviced and repaired as quickly as possible.

The Weingarten workshop has
master carpenters and twenty
other specialist trade professionals
producing customized wooden interiors. “We’ve specialized in carrying out as many production steps
as possible on site at the factory,”
explains Geimer. “This allows us
to refurbish the ships very quickly and efficiently at docks acrossEurope.” Geimer’s internationalcustomers appreciate the firm’s efficiency and speed. But it’s the highquality, flexibility and reliability ofskilled carpenters that really makes
the difference.

Photo: Heiko Specht/laif

WOODWORK FOR THE HIGH SEAS

MARKETS GERMANY | Manufacturing

ILLUMINATING THE WORLD
The skilled crafts company Maas + Roos
Signage develops and produces illuminated signs for international companies at its
30,000-square-meter production plant in
Hilpoltstein, southern Germany. “A signage
system has to have perfectly homogeneous
illumination,” explains Alexander von derGrün, CEO and co-founder of the company.
His partner and co-owner Sebastian Gemählich adds: “Illuminated signs are an importantpart of a company’s brand image and have tolook the same all over the world — despite
different technical standards.” Maas + Roos
therefore places great emphasis on quality management and training. “We produce
customized products manufactured in many
individual steps and electrified by specialists,” says von der Grün. “That’s why we need
three different, highly specialized Meister(‘master’) training courses within the company.”
Maas + Roos employs and trains mastercraftspeople for illuminated signage, metal
construction and electrical installation. International companies such as IKEA and Rolex
initially commissioned the firm to stage theirlogos as illuminated advertising in Germany.
They were so impressed by the quality of
their work that they now use its tradespeople for jobs in different countries across theglobe. “We are very proud to bring German
craftsmanship to so many places around theworld,” says von der Grün.
Photo: Maas+Roos

32

professions in Germany require individuals toreach the level of master before they can run
their own companies.
The qualification is equivalent to a bachelor’s degree — and many entrepreneurs proudly display their own certificates and those of
their employees on the walls of the company.
This carefully designed training processensures that expertise, compliance and upskil­
ling are an integral part of the trades sector in
Germany. Delivering poor or mediocre work, or
running a “cowboy” operation, runs contrary
to a true craftsperson’s sense of honor.
The “economic powerhouse next door”
Germany’s skilled trades and crafts busines­
ses are typically small- or medium-sized, andmostly owner-operated. Company founders are
directly responsible for delivering outstanding

products and services — and it’s not uncommon to find hands-on owners, still plying theirtrades in workshops, kitchens or construction
sites.
This incredibly diverse sector excompasses
small, regionally active one-person businesses
all the way up to highly specialized, internationally oriented companies with multiple
locations. The skilled trades are sometimes
described as the “economic powerhouse nextdoor” because the companies are often deeply
rooted in their local economies, where they
are an important building block for regional
success.
German tradespeople can also be surpri­
singly cosmopolitan. Handwerk has a traditionof “travelling years,” where after completing
their first examination, tradespeople leave thecompany to “wander” from place to place andcompany to company, sometimes across national borders, all the time gathering expertiseand picking up new skills.
It is a tradition “that has existed in thiscountry for centuries and is still practiced insome skilled trades sectors today,” explains
Olma. He adds: “The main aim is for craftspeople to familiarize themselves with new working
practices, foreign places, regions and countries
and to gain life experience.”
A competitive advantage
This rotational training system also benefits
international companies setting up shop in
Germany, says GTAI expert Karl-Martin Fischer. “It benefits suppliers and service providers
looking for partner companies for their customer service.” He cites a few of the most popular
trade requirements: “Construction trades-MARKETS GERMANY | Manufacturing

33

GERMAN HANDWERK IN FIGURES
Skilled trades and craftspeople make sure the wheels of industry keep turning. Germany
prizes its extremely diverse Handwerk sector and ensures a high level of expertise.

1M

5.7 M

Number of Handwerk firmsin Germany

29%

Number of people who workin Handwerk in Germany

350,000

Number of apprentices that learned a craft in theGerman Handwerk in 2022

Share of apprentices employedin Handwerk in Germany€735 B

Annual turnover of the Handwerk sector in Germany

Source: Zentralverband des deutschen Handwerks (ZDH) and government project ‘Make it in Germany'

people who build factory buildings, electricalengineers who plan energy-efficient company
headquarters, food tradespeople who supply
company canteens, or shopfitters who set up
showrooms.”
In Fischer’s experience, “international
companies are always impressed by the expertise, specialist knowledge and experiencethat these companies bring to the table as partners and service providers,” adding: “This isespecially true when customized products andsolutions are required.”Modern trades for the future
Traditional crafts, with their reputation for
artisanal, customized and often regional outputs are sometimes viewed as the antithesis ofmodern, mechanized, mass market industry.
However, in Germany, tradesmanship and in-

dustry work closely together in areas such as
toolmaking or mechanical engineering, whereindustrial firms need specialized, one-off instruments (see box 3).
And while Handwerk is a venerable,
centuries-­old tradition, its practitioners workat the cutting edge of modern technology. Digitalization has been fully integrated into skilled
trades sectors for some time, for example, withthe use of drones to survey building sites andthe creation of virtual 3D prototypes of tools
for industrial companies, while heating andair conditioning technicians today rely on AI-­
powered predictive maintenance.
Looking to the future, trade professionals
with “green skills” will be a key partner in thetransition to a climate-neutral economy andthe expansion of green tech. Clever toolmakers
will be needed to fabricate specialist compo-

nents and digital management and maintenance systems for green energy firms; skilled
tradespeople will be called upon to insulate
and renovate homeowners’ properties, fit solar panels, exploit geothermal energy, makeurban landscapes more climate resilient andso much more.
“German craftsmanship is a unique specialty that’s known the world over,” says
Karl-Martin Fischer. “And it’s a location benefit
that international companies should recognize
and take advantage of.”

CONTACT
karl-martin.fischer@gtai.de
GTAI expert for the skilled trades
and craft sector in Germany

MARKETS GERMANY | Investors

Dr. Martin Henkelmann, President
and CEO of the Korean–German
Chamber of Commerce and Industry(AHK Korea) says Germany andSouth Korea have much in common.

“WE FORESEE EVEN
MORE TRADE, INVESTMENT AND
RESEARCH OPPORTUNITIES IN THE
COMING YEARS.”
South Korea and Germany share asimilar history, common economic strengths and a robust traditionof trade. Dr. Martin Henkelmann,­President and CEO of the Korean–
German Chamber of Commerce andIndustry (AHK Korea), shares with us
what the future may hold.

South Korea and Germany are both globallyrenowned for their manufacturing capabilities. So how do South Korean companies
view Germany in terms of expansion?
MARTIN HENKELMANN: Germany has been
an attractive investment location for South
Korean companies over the past decades, as
indicated by data from the Import-Export Bankof Korea. Between 2015 and 2022, South Korean
companies invested around USD 3.4 billion inGermany: USD 1.4 billion went to the manufacturing sector, and nearly USD 900 million tobanking and insurance. The wholesale sector
has also strongly benefitted in the past decade.
Germany’s appeal to South Korean investors
is down to its strong reputation, its economic
and political stability and parallels in the twocountries’ history.
What advantages does Germany offer as abusiness location?
MH: South Korean companies seek proximity
to their major clients and their largest market within the EU, which is why many haveestablished their European headquarters inGermany. Collaborations in research and product development with German businesses andresearch institutions are also appealing. Furthermore, the quality of life in Germany for the
Korean families who come over with the companies is valued highly, particularly since many
regions have strong Korean communities.

Which sectors in Germany are particularly
appealing?
MH: The “classical” sectors such as automotive, chemicals and mechanical engineering
remain important for South Korean companies, while we see growing interest in pharmaceuticals, medical devices and digitalization.
The growing popularity of South Korean products — particularly consumer goods — in theEuropean market is also making South Korean
companies seriously consider Germany when
they set up their European hubs and logistics
systems. Furthermore, in alignment with theglobal push for decarbonization, South Korean
enterprises — like German businesses — are actively seeking sustainable solutions. Therefore,
South Korean enterprises with solutions will
present them to German clients while others
use experience, knowledge and infrastructurein Germany to achieve their ESG and RE100
targets.
2023 was a year of considerable geopoliticalturbulence. How has this affected South
Korea’s approach to global economic relations?
MH: The rise of South Korea from one of thepoorest nations in the 1950s to one of today’s
economic powerhouses is strongly linked toSouth Korean businesses engaging in international trade. Therefore, South Korean companies have a strong interest in free trade and an

effective international rule-based order. South
Korean enterprises have a long-standing experience with the ups and downs of inter-Korean
relations and these changes have not stopped
South Korea’s economic development. Much
more of concern for South Korean companies
are the global tensions, supply chain instability and trade restrictions hindering the flowof goods.
At the same time, South Korean enterprises
have been diversifying their supply chains andmarkets for years, including a heightened focus
on the ASEAN region. They also appreciate
the reliability of doing business in markets ofvalue partners such as the European Unionand the United States. As the Korean–German
Chamber of Commerce and Industry, we foresee even more trade, investment and research
opportunities between the two nations andtheir companies in the coming years.

CONTACT
info@kgcci.com
KGCCI – AHK KOREA
joachim.weber@gtai.de
GTAI director Executive Unit
Strategic Partnerships and liaison
to the German Chambers ofCommerce Abroad

Photo: Korean-German Chamber of Commerce and Industry (AHK Korea)

34

How Germany Works
ATTRACTING SKILLED LABOR
Germany eases immigration criteria for skilled workers
On November 18, 2023, new rules came into
force under Germany’s Skilled Immigration
Act and the new EU Blue Card that make iteasier for non-EU nationals to live and workin Germany. University graduates with a job
offer and an annual salary of EUR 43,800 canqualify for a residence permit for employment.
Those in professions where the need for skilledlabor is greatest (for instance in STEM disciplines) only need to earn around EUR 39,683.
IT specialists do not have to possess a university degree if they can show they have three

years of professional experience. Permanent
residence permits can be granted after just
21 months if candidates learn German. The
new rules are expected to make it easier forcompanies in Germany to acquire skilled laborfrom abroad.

MORE THAN 1 IN 7
ARE ­IMMIGRANTSSKILLS SHORTAGE IN AN
OLDER POPULATION

Share of foreign nationals of the total
polulation in Germany

Share of employed people of the total
polulation in Germany

HIGH NUMBERS OF
EU AND NON-EU MIGRANT­WORKERSCountries of origin of foreign nationals
living in Germany (2022)

12.3

TURKEY
1,487,110

MILLIONUKRAINE46

1,164,200

SYRIA

MILLION

923,805

ROMANIA883,670

POLAND880,780

84.4

ITALY

84.4

MILLION644,970

CROATIAMILLION436,325

FOREIGN NATIONALSEMPLOYED PEOPLETOTAL POPULATIONTOTAL POPULATIONBULGARIA
429,665

AFGHANISTAN
377,240

Source: Destatis

FOREIGN­ ORKERS TENDW
TO SETTLE
IN ­GERMANY
Share of Blue Card
holders who stayin Germany over thelong term (more than
five years)

Source: Statista

Source: Destatis

GERMANCITIZENSHIP

83 %Number of people
who were naturalizedin Germany in 2022

+28 %COMPARED TO
PREVIOUS YEAR
Source: GTAI

Source: Destatis

168,500

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