Cross-industry innovation:
IoT & Industry 4.0
Diverse business opportunities

Effective networks›

Over 25 % of value added of Bavaria’s GDP is accounted for by
manufacturing. That’s why IoT & Industry 4.0 are key driversof future growth.

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From improving production processes to creating new businessmodels, business leaders in Bavaria know that tearing down silos
and working with new partners is the only way to make the newindustrial revolution a reality.

Since 2006, Bavaria’s Cluster Initiative has built themed networks
that bring companies, researchers, government and independent
experts together. Clusters include a multitude of technologies suchas sensor technology, mechatronics, automation and new materials –all of them essential in driving collaborative Industry 4.0 projects.

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Several regional networks focus on specific technologies to strengthen global competitiveness and cross-industry innovation amongcorporations and institutions within their respective regions.
For example:›

This creates enormous cross-industry innovation business potential
for industrial service providers and start-ups from all over the world.

Access to talent
Various universities and institutions are dedicated to developing new
skills required for IoT & Industry 4.0, including quantum computing, additive manufacturing and robotics. The Bavarian government finances the
expansion of faculties and infrastructure with a wide range of programmes, from high-end R&D to hands-on training. For example:›››

Most of Bavaria’s leading universities – such as Julius-Maximilians
University in Würzburg, the Technical University of Munich and theLudwig-Maximilians University in Munich – are surrounded by rapidly
growing ecosystems that not only help grow talent but also fosterworld-class R&D in areas relevant to IoT & Industry 4.0. In Munich,for example, the brand-new Quantum Valley is a collaboration of theTechnical University of Munich, the Bavarian Academy of Sciencesand Humanities, the Fraunhofer Gesellschaft, Ludwig-Maximilians
University and the Max Planck Society. The Leibniz Supercomputing
Centre is also housed next door.
The Technical University in Weiden offers a programme in Industry
4.0 Informatics. Bavarian corporations such as BMW offer a dual
study programme that combines on-the-job training with a degree
at the Technical University in Weiden.
Another example of cooperation is the Technical University in Ingolstadt, which offers several study programmes focusing on IoT &Industry 4.0 combined with cutting-edge research on topics such as
digital factories.

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Northern Bavarian Automation Valley – focuses on automation
technology in Northern Bavaria.

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Mechatronik Competence Network – focuses on creating
networks in Eastern Bavaria in close cooperation with nearby
universities.

New themed networks focus on specific cross-industry innovation
technologies in IoT & Industry 4.0, for example:›

Additive Manufacturing Coordination Centre brings together
players in this field, reinforcing Bavaria’s know-how and technology base.

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The Digital Production & Engineering platform within theBavarian Digitisation Centre (Zentrum Digitalisierung.Bayern)
supports networking and best practice sharing within the field.

Glocal perspectives›

Bavaria is known as a favourate venue for global players in
IoT & Industry 4.0 to meet and connect.

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Automatica, the world’s leading trade fair for smart automation androbotics, has been a popular venue where global technology leadersgather in Munich for over 15 years.

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Many international corporations such as Microsoft, IBM and Google
have established major R&D hubs here taking advantage of theBavarian ecosystem as a testbed for IoT & Industry 4.0 innovations.

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While many Bavarian companies enjoy the benefits of being headquartered here – their business is still global. The export quota of
goods manufactured in Bavaria is well over 50 %.

Cross-industry innovation:
Mobility & Aerospace
Diverse business opportunities

Effective networks››

Since 2006 the state-funded Cluster-Offensive Bayern promotes
the formation of industry networks that drive cross-functional andcross-industry innovation. Three renowned clusters in automotive,
aerospace and railway today serve as high performance networ-kingand innovation platforms with international connections.
The Cluster MAI Carbon of Composites United pursues the goal of
implementing lightweight construction technologies on an industrial
scale not just for the mobility sector. E-Mobility Cluster Regensburg
focuses on technology for e-mobility including infrastructure. The
Cluster Mobility & Logistics and the Logistics Initiative Bavaria are
key innovation platforms for the logistics sector.

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In addition, new platforms have been formed that harness the power of digital technology. For example, the Digital Hub Mobility is partof a nationwide hub initiative. It focuses on networking and poolingprojects around big data, eMobility and autonomous driving. The
focus of MCube and EIT Urban Mobility is on developing sustainable
solutions for mobility in metropolitan regions.

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In the same spirit, larger corporations have founded start-up programmes to cross-innovate with young founders and digital entrepreneurs. Among them are, for example, the BMW Startup Garage,
co-pace by Continental, UNLIMITED X by Rehau, the Volkswagen
Data Lab or MAN Impact Accelerator.

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Two start-up centres are specifically focused on the aerospaceindustry: ESA BIC Bavaria is a business incubator for space technology while brigkAIR specializes in three-dimensional mobility andunmanned aerial vehicles.

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Bavaria has been a leading international location for key mobility
sectors for many decades. For example:›

Automotive: With famous brands such as Audi and BMW
as well as leading OEMs such as Brose, Dräxlmaier Group or
Webasto, automotive accounts for approximately 30 % ofrevenues in the manufacturing sector.

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Aerospace: Over €11 billion in revenues are generated annuallyin the manufacturing aerospace sector by around 450 companies. As such, Bavaria is one of the few regions worldwide
where companies serve the whole aerospace value chain.

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Railway Technology: The German rail industry generates annual revenues of approx. €12 billion and holds a significant shareof the world market. Some of the most essential companies
are located in Bavaria.

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Logistics: Bavaria is centrally located between Western andEastern Europe, its road network of 138.000 kilometers links
many important logistic hubs – via water, road, rail and air alike.
It is therefore an important location for logistics innovation.

Its diverse mobility landscape is also the key driver for cross-industry
innovation in Bavaria. In fact, the state has become Europe’s leading
testbed for future mobility solutions, with many high profile projects
such as Hydrogen Centre.Bavaria in Nuremberg, Ingolstadt’s Urban Air
Mobility Initiative and the Digital Motorway Testbed, attracting attention far beyond its borders. Disruptive start-ups such as Lilium and TUM
Hyperloop are settling here as a result, likewise collaborative initiatives
such as IONITY, the first pan-European high power charging grid, a joint
venture of Audi, BMW, Porsche, Ford, Volkswagen and Daimler.

Access to talentGlocal perspectives›

Bavaria has 30 world-class universities and universities of appliedsciences with a total approximately 400,000 students – many ofwhom are enrolled in specialties relevant to the mobility sector.

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A number of academic programmes specifically build the skills required for shaping the future of mobility. For example:

From 2021 onwards, Munich will be hosting the IAA Mobility trade
show, welcoming fair attendees from all over the world. IAA Mobility is one of the world’s most important trade shows in this sector
with exhibitors from 39 countries (2019). Its relocation to Munichreflects not just the city’s international clout as a location for the
future of mobility but also its overall global perspective.

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Not only the big players – such as Audi, Siemens, BMW, Airbus or
MAN – but also Bavaria’s hidden champions innovate cross-border. For
example, Goldhofer, based in Memmingen since 1705, is a world leader
in vehicles for heavy-duty transport and special cargo haulage andexports more than 80 % of its production.

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Innovative mobility companies are drawn to the region: for example,
lyft, an on demand transportation company based in San Francisco,recently opened its first European office in Munich. NIO, a Chinese
electric car start-up based its global design office here.

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University of Applied Sciences in Landshut: bachelor’s degreein Automotive Computer Science.

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TUM Campus Straubing for biotechnology and sustainability:
special focus on clean tech, conducting specific research in thearea of synthetic fuels, for example.

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Department of Aerospace and Geodesy at the Technical University of Munich: founded in 2018 with the vision of becoming thecore of a “space valley” in the metropolitan region of Munich.

In addition, a well-established system of in-company education via
vocational training and dual studies has evolved over the past several
years with a focus on areas such as digitalisation or clean technology.

Cross-industry innovation:
Fin- & InsurTech
Diverse business opportunities

Effective networks›

Bavaria’s established strength in the banking and insurance sector is
the ideal breeding ground for cross-industry innovation in the Fin- &InsurTech sector:›

Whether you are a start-up, a corporate or an investor, Bavaria’s
larger cities are full of networking opportunities to establish relevant
partnerships.

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It is the leading location for the insurance sector in Germany,with approximately 60,000 employees.

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Since 2017, DIA Digital Insurance Agenda Munich has evolved into
the leading ‘must see’ conference on InsurTech and insurance innovation worldwide.

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It is the second largest German banking center with 98,000
employees state wide, working for 263 cooperative banks, 74
savings banks and 51 private banks.

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A number of accelerator programs offer plenty of networking
opportunities. Many of the major banks and insurance companies
cooperate with these players. For example:››

Fin- & InsurTech in Bavaria is all about combining the best of bothworlds: almost all major banks and insurance companies are collaborating with new start-ups. In the same spirit, in contrast to the earlydays of FinTech, innovative young companies also opt for cooperation rather than competition to build their business.
In this ecosystem, many well known Fin- & InsurTech companies originated in Munich, including Scalable Capital (Personal Finance), treefin(Money Management), Check24 (Money Management), Interhyp(Mortages), Ottonova (Health Insurance), IDnow (Enabling Processes
and Technology)›

InsurTech Hub Munich is a vibrant ecosystem of start-ups, corporate partners, investors and research institutions initiated bymajor insurance companies. Today, it is part of the nationwide
digital hub initiative. International partners such as Da-ichi Lifeor Microsoft are also working with the initiative.

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Plug&Play, a renowned Silicon Valley accelerator, runs accelerator programs out of Munich with a focus – among others – on
InsurTech.

Access to talentGlocal perspectives›

Bavaria is well known for its excellent universities and businessschools: approximately 125,000 (figures winter 2019) young people
are studying to graduate in business, law, IT, mathematics and otherscience programs.

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Bavarian banks and insurance companies have always been run with
global markets in mind – and this has been the source of decades ofsuccessful growth for companies like Allianz or Munich Re. The sameis true for new FinTech business models made in Bavaria.

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In addition, the unique German vocational training and dual study
programmes offer highly specialized on the job training combinedwith academic studies in banking and insurance.

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All major players are also reaching out across borders. For example:››

Allianz X, for example, is the digital investment unit of Allianz
Group working to create a global ecosystem of strategically
relevant new companies.

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Munich Re’s partnership with Plug&Play is a great exampleof how global players capitalize the strengths of the local ecosystem to cross-innovate.

A number of academic programs and institutions across Bavaria focus
on developing talent specifically for the industry. For example,›

Forum V is a joint initiative of universities, corporates andassociations in North Bavaria that promotes interdisciplinary
education in the insurance sector.

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MRIC Munich Risk and Insurance Center aims to bundle
expertise from LMU insurance scientists and their network tofurther enhance Munich’s visibility as an important insurance
research and teaching location.

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Blockchain is a key supporting technology for FinTech businessmodels. A major underway at the following institutions: Fraunhofer Blockchain Lab Bayreuth, Fraunhofer AISEC Garching, TUM
Blockchain Research Cluster Munich.

›A global perspective is also driven by the venture capital and private
equity scene: Bavaria is its most important German. 50 firms areheadquartered in Munich – many other international and nationalfirms have offices here as well.

Cross-industry innovation:
Artificial Intelligence (AI)Diverse business opportunities

Effective networks›

AI thrives on Bavaria’s industrial strength: Thanks to its strong anddiverse manufacturing base, Bavaria is a hotbed for Industry 4.0 in
Europe and hence for cross-industry innovation based on artificial
intelligence.

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On a global scale, Bavaria’s competitive edge in AI is in embedded
systems and industrial IoT applications. From mechanical engineering to pharmaceuticals to automotive – smart new applications andAI based services are highly sought after in all industry sectors.

The Hightech Agenda set the agenda for building a world class “AIDistrict” in Bavaria. The concept provides for a state-wide-network
to connect and strengthen existing and new AI hotspots. The newly
founded Bavarian AI Agency, will manage the network. An advisoryboard consisting of renowned experts from Bavaria and abroad willconsult to ensure that the network will turn artificial intelligence
into a major driving force for business success.

›For example, Würzburg (Data Science), Ingolstadt (Mobility), Erlangen (Healthcare) and Nürnberg (flexible AI applications) act as
hubs for specific topics. Munich’s focus is on intelligent robotics withboth the LMU and TU universities as well as independent research
institutes building world class R&D facilities. In the same spirit,
appliedAI, a part of UnternehmerTUM is Germanys largest initiative
for the application of AI technology, helping companies to tackle theoperational challenges of AI transformation.

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Institutions such as the ADA Lovelace Center for Analytics, Data andApplications in Nuremberg facilitate cross-industry innovation bybringing R&D and business together. Here, companies team up withleading national and international AI researchers to collaborate on
specific projects.

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Munich based fortiss center seeks to bridge the gap between
research and real life applications. In 2019, a dedicated center for AI
research was founded in collaboration with IBM Watson IoT Center.

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Bavaria is also among Germany’s most important regions in the services sector, major branches being insurance and financial services.

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A new ecosystem of insurance and cross-industry partners, startups, investors, universities and research institutions has evolved
over the last years with a clear focus on creating new AI-driven
business models.

›In 2020, Munich ranked first among German cities in terms of funding of AI with an average funding of EUR 27 million per company.

Access to talentGlocal perspectives›

The Hightech Agenda is also designed to massively expand thecapacities for prepping world class AI talent at Bavarian universities
and technical colleges. 100 new professorships will be created overthe coming years.

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The growing AI field in Bavaria is not just driven by investmentsfrom the Bavarian state and local investors but also international
corporates, private investors and accelerators. The Bavarian AI venture capital landscape is highly dynamic.

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Already today, the Munich School of Robotics and Machine Intelligence is a world class facility for research and education, which closely collaborates with other institutions such as Fraunhofer Institut
on specific topics.

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Many global players are contributing to turning Bavaria into a global
AI hotspot. For example, IBM Watson’s IoT headquarters is locatedhere and Munich is one of three locations of Microsoft’s IoT & AI
Insider Lab.

›All Bavarian AI hubs – such as Würzburg, Erlangen or Nürnberg – arehome to universities offering specific programmes on AI. In addition,
universities and technical colleges in many other Bavarian cities
offer specialized programmes. For example, Aschaffenburg offers
a programme on “Medical Engineering and Data Science”, the AI
course at OTH Weiden allows for specialization on specific topics
such as Smart Home and Smart Energy.

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Local research institutions and universities are well connected globally with partner institutions worldwide – major research projects
operate across border.

Cross-industry innovation:
Health, MedTech & Life Sciences
Diverse business opportunities

Effective networks›

R&D is the catalyst of any successful life science business – andthe very reason why it thrives in Bavaria. The state is known aroundthe world for promoting research at universities and non-academic
institutions in various fields, including biotechnology, medical
technology, digital health, pharmacy and pharmacology, nutritional
science, food technology and environmental engineering.

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Over the past two decades, connections between the world of
science and business have been reinforced in Bavaria. In addition,
digitalisation (and new disciplines such as bioinformatics in itswake) has been a driving force in creating a unique cross-industry
innovation and entrepreneurship climate:›

For example, there are no less than 350 companies in thebiotechnology sector in Bavaria.

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Medical technology also thrives here. This sector has a total
turnover of approx. €6.1 billion of which 93% is generated bysmall and medium-sized enterprises.

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In addition, the state is home to a significant number ofworld-class healthcare institutions and pharmaceutical, chemical and environmental technology companies. As a result,
Bavaria enjoys a very diverse life science business landscape.

Since 2006, the state-funded Cluster-Offensive Bayern has promoted the formation of industry networks to promote cross-functionaland cross-industry innovation. Three renowned clusters in life sciences today serve as high performance networking and innovation
platforms with international connections:›››

BioM Biotech Cluster
Food Cluster
Forum MedTech Pharma for Medical Technology›

Regional networks such as Medical Valley Nuremberg facilitate
collaboration in their respective locations, also forming cross-borderpartnerships.

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In addition, new platforms have been formed over the past several
years that harness the power of digital technology. For example, theDigital Health Hub in Nuremberg/Erlangen focuses on the digitalisation of the healthcare industry.

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Most recently, the H+ digital health programme was created by
InsurTech Hub Munich and the dmac – Medical Valley Digital HealthApplication Center. As a true cross-industry initiative it seeks tosupport teams developing digital health solutions.

Get an overview of life sciences in Bavaria here.

Access to talentGlocal perspectives››

All players in the Bavarian life science ecosystem collaborate withpartners cross-border. As a consequence, many international companies in the sector are located here, for example: Amgen, Baxter,
Novartis, GE Healthcare, Roche, Daiichi Sankyo.

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There are also many cross-broder projects, such as Siemens Healthineers and Imito AG (software developers from Zurich), who havedeveloped an app solution „ImitoWound“ for the digital observationof wounds. Another example is Medigene AG (Martinsried) andCytovant (Shanghai), who have entered into a service agreement tosupport the development of a manufacturing process for dendritic
cell (DC) vaccines.

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In the same spirit, Bavarian entrepreneurs innovate with a global
perspective, with various “hidden champions” acting as world market leaders in their field. They include, for example, medical technology company Brainlab, a world market leader in soft- and hardware
for in the fields of surgery, radiotherapy and medical image sharing.
Martinsried based Morphosys is a leading player in the field ofantibody technology. Bauer Comp is a global provider of breathing
air compressor systems and Ireks is known worldwide for first-classbaking ingredients with customers in over 90 countries.

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Various institutions, such as Bayern International, assist innovative
companies in the life science sector to go global.

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Of the thirty universities and universities of applied sciences in
Bavaria, most have faculties with world class R&D programmes inall major life science disciplines. For example:›
Ludwig Maximilian University (LMU) of Munich: The laboratory
for Artificial Intelligence in Medical Imaging (AI-Med)›Technical University of Munich (TUM):
Munich Institute of Biomedical Engineering›
Julius-Maximilians University in Würzburg:
Research priority area Molecules, Cells and Organisms›
University of Regensburg: R&D in the Faculty of Medicine›
University of Augsburg: Chair of Embedded Intelligence for
Health Care and Wellbeing›
Friedrich-Alexander University in Erlangen-Nuremberg:
Chair of Digital Health›
Ostbayerische Technische Hochschule Amberg Weiden:
Digital Healthcare Management, Medical Technology andPhysician Assistance›
Hochschule Ansbach: Industrial Biotechnology andMedical Engineering
In addition, non-academic institutions are important R&D hubs forlife science. For example:›
Max Planck Society is building a larger “life science campus”
in Martinsried where a strong focus will be on Real Life
Neuroscience.
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HelmholtzZentrum München has R&D teams covering a broad
range of topics such as genetics and epidemiology, diabetes,
health and environment and stem cells.