Germany: A Business Location Facing Global Competition

Transcription

1 Chris Schmidt - istockphoto Germany: A Business Location Facing Global Competition Business Locations UK and Germany, - London Dr. Jürgen Friedrich Chief Executive, GTAI

2 Agenda Our Organization Trade Export Promotion Invest FDI Attraction Germany s Advantages 2

3 Our Organization The goals and functions of GTAI are outlined by a resolution of the German Parliament. Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. The agency is supported by the Federal Ministry of Economics and Technology and the Federal Government Commissioner for the New Federal States in accordance with a German Parliament resolution. Germany Trade & Invest supports export-oriented companies based in Germany with comprehensive information on foreign markets. markets Germany abroad as a cutting-edge business and technology location to attract foreign investors that create or secure jobs in Germany. advises foreign companies on their investment plans and carries out comprehensive project management in Germany. An additional function of the organization is the special focus on the economic development in the new federal states (eastern Germany) and Berlin. 3

4 Our Organization Germany Trade & Invest has a worldwide network of offices that focus on its tasks of market observation and investment attraction. Chicago New York San Francisco Toronto Washington Bogotá Buenos Aires Mexico City Santiago de Chile Sao Paulo Berlin Bonn Athens The Hague London Milan Stockholm Brussels Helsinki Madrid Paris Johannesburg Cairo Nairobi Tunis Dubai Istanbul Jerusalem Almaty Belgrade Budapest Bucharest Kiev Moscow Prague Warsaw Zagreb Bangkok Beijing Hanoi Hong Kong Jakarta Kuala Lumpur Mumbai New Delhi Seoul Shanghai Taipeh Tokyo Sydney 4

5 Our Organization GTAI is an integral part of the German foreign trade promotion landscape. German Chambers of Commerce (AHKs) Economic Development Agencies of the Federal States Chambers of Commerce in Germany (IHKs) Embassies & Consulates Industry Associations Multipliers 5

6 Foreign Country and Market Information Information about Germany/Consultancy Our Organization GTAI s areas of activity focus on export promotion and investment attraction. For Companies in Germany (Exporters/Investors) For Companies Abroad (Foreign Investors) Macroeconomic analyses and Identification of attractive markets forecasts Country and industry analyses (over 125 countries) International projects and tenders Foreign economic and tax law Customs information and tariffs Practical business tips Business contacts and addresses and companies Economic framework in Germany Site specific information Industry specific information Direct contact with potential investors abroad Investor consultancy services Project management support 6

7 Agenda Our Organization Trade Export Promotion Invest FDI Attraction Germany s Advantages 7

8 Trade Export Promotion The majority of German export companies are small- and medium-sized enterprises. Companies in the German Export Industry (2010) Total Percentage of Total Number of Companies in Germany 3,165, %.. large-scale enterprises 10, %.. small and medium-sized enterprises approx. 3,155, % Number of Export Companies in Germany 353,300 11% of all companies.. large-scale enterprises 8,400 84% of all large-scale enterprises.. small and medium-sized enterprises 344,900 11% of all SME s SMEs have fewer than 250 employees or less than EUR 50 m turnover; Source: Institut für Mittelstandsforschung

9 Trade Export Promotion The structure of German exports has changed over the past years and will continue to change in the future. German Global Export Shares, 1990 and 2011 Export Share 1990 (%) Export Share 2011 (%) Trend France USA Future Development of the Structure of Exports China will surpass France in 2014 and become the most important market for German goods. (IfM/BDI) Netherlands Great Britain PR China India will also be among the Top 5 export countries in (IfM/BDI) Italy Poland Russia N/A Russia and Poland are becoming increasingly important. (IfM/BDI) India 0.6 1) 1.0 1) 1995; 2) Belgium and Luxembourg; Source: Statistisches Bundesamt 2012; GTAI calculations; 1)

10 Trade Export Promotion Germany Trade & Invest prepares regularly-updated information on foreign markets and reacts to current trends and developments. Regularly-updated information Information focused on Global Developments (Examples) Economic Data Compact Economic Trends Compact Industry Compact: (i.e. Machinery, Medical Technologies, Renewable Energy, Construction, Automotive) International Industries (Branche International) Top Export Markets Practical Business Tips North Africa in Focus Germany Year in India, 2012 Asia-Pacific Conference Special, 2012 Legal Framework Compact Customs (brochures, special features) Accessing Natural Resources Worldwide Markets magazine 10

11 Trade Export Promotion Germany Trade & Invest highlights economic opportunities in a range of growing markets. Industrialized Countries Emerging Countries Newcomers Australia (2011) Colombia (2011) Kazakhstan (2011) Finland (2011) South Africa (2011) Mongolia (2012) South Korea (2011) Turkey (2011) Peru (2012) Norway (2012) Indonesia (2012) Slovakia (2012) Mexico (2012) Tunesia (2012) 11

12 Agenda Our Organization Trade Export Promotion Invest FDI Attraction Germany s Advantages 12

13 Invest - FDI Attraction Germany Trade & Invest provides free consultancy services to investing companies, and it coordinates further support by the federal states. Investor 13

14 Invest - FDI Attraction Germany is a global FDI magnet. In 2011, the country recorded more than 800 projects. Number of Projects Worldwide by Country of Destination ( ) Number of Projects Worldwide by Country of Destination (2011) China United States United States China UK India Germany France Russia Spain UAE Singapore Poland Brazil UK India Germany Brazil Russia UAE Singapore Spain France Canada Australia Mexico Poland 300 Romania Mexico Source: fdi Markets,

15 Invest - FDI Attraction Germany recorded its best results in The majority of FDI projects originated in Western Europe. Number of Projects in Germany ( ) Number of Projects in Germany by Origin of World Region ( ) Rest of Europe 5% Middle East 1% Rest of the World 1% 600 Asia-Pacific 19% Western Europe 48% North America 26% Source: fdi Markets,

16 Invest - FDI Attraction The ICT & software industry, and business & financial services are leading sectors in attracting new projects. Number of Projects in Germany by Sector ( ) Healthcare, Pharma, Biotechnology 5% Transportation, Storage & Logistics 6% Hotel, Tourism, Entertainment 2% Other Sectors 4% ICT & Software 18% Energy, Minerals, Metals 6% Textiles 7% Business & Financial Services 15% Consumer Goods (inkl. Food & Beverages) 7% Electronics & Semiconductors 7% Chemicals, Plastics, Paper 8% Automotive, Industrial Machinery & Equipment 15% Source: fdi Markets,

17 Invest - FDI Attraction Most new projects open sales and marketing and/or support offices. Business services and manufacturing are also common activities. Number of Projects in Germany by Business Activity ( ) Education & Training 1% Other Activities 16% R&D 1% SSC/BPO/CC 1% ICT & Internet Infrastructure 1% Sales, Marketing & Support 38% Logistics, Distribution & Transportation 6% Headquarters 7% Manufacturing 14% Business Services 15% Source: fdi Markets,

18 Agenda Our Organization Trade Export Promotion Invest FDI Attraction Germany s Advantages 18

19 Germany s Advantages Leading Economy Quality of Life Global Player Secure Investment Environment 9 3 High Productivity Competitive Tax Conditions 8 4 Excellent Workforce Inviting Incentives 7 5 Power of Innovation 6 First-Class Infrastructure 19

20 Germany s Advantages Germany is Europe s largest market and leading economy. Share of Total GDP and Population in the European Union (2011) GDP (in EUR bn) Share of total GDP (EU 27) Population (in m) Source: Eurostat 2011, US Census Bureau 2011, Japanese Statistics Bureau 2011; Note: France GDP 2011 forecast Share of total Population (EU27) Germany 2,571 20% 82 16% France 1,988 16% 65 13% UK 1,737 14% 62 12% Italy 1,580 13% 61 12% Spain 1,073 8% 46 9% Netherlands 602 5% 17 3% Poland 370 3% 38 8% Sweden 387 3% 9 2% Czech Republic 155 1% 11 2% Hungary 101 1% 10 2% Slovak Republic 69 1% 5 1% USA 10, Japan 4, EU 27 12, Eurozone 9,414 75% % 20

21 Germany s Advantages With EUR 509 billion of foreign investments in 2010, Germany is a major global player for inward investment. International FDI Stock Ranking 2010 (in EUR bn*) German FDI Stocks by Country of Origin (2010) Rank Country Stocks 1 USA 2,603 2 Hong Kong UK France Germany 509 Japan 3% Sweden 3% Spain 2% Rest of the World 10% Netherlands 23% 6 Belgium Spain 464 Austria 4% 8 Netherlands China 437 Switzerland 6% 10 Canada 423 Japan 162 Poland 146 Czech Rep 98 Hungary 69 Slovak Rep 38 EU-27 5,198 World 14,438 Italy 7% France 9% UK 9% USA 9% Luxembourg 15% Note: * exchange rate: yr. avg. 2010, Source: UNCTAD 2011, German Central Bank

22 Germany s Advantages Germany has one of the highest productivity rates in Europe. Labor Productivity by Hours Worked* (2010, in EUR) Luxembourg 59,2 Netherlands USA 45,0 44,9 France Germany 41,3 40,3 Spain UK 35,8 35,2 Japan 29,7 Slovak Republic 25,5 Czech Republic Hungary Poland 19,5 18,5 20, Note: *Labor productivity as GDP per hour worked in current prices; Source: OECD

23 Germany s Advantages Germany has a well-trained and highly-motivated workforce. Dual Education System 1 A combination of on and off-the-job training reduces hiring and training costs, thus minimizing recruitment risks. Vocational schools closely cooperate with ca. 500,000 companies in Germany. The focus is determined by specific industry needs. Higher Education Germany has 106 universities, 102 colleges and 207 universities of applied sciences (UAS). Almost 60,000 engineers and over 63,000 mathematicians and natural scientists graduated in Workforce in Germany by Level of Professional Education (2010, in % of total workforce) Graduates from vocational colleges and technicians (master craftsmen) 9% University Graduates 18% Unskilled 17% Skilled craftsmen (apprentices from dual education) 56% Note: 1 Dual education system in Germany is a combination of threeyear on-the-job training combined with classroom instruction Sources: Federal Statistical Office 2011 Federal Institute for Vocational Education and Training

24 Germany s Advantages Germany has first-class infrastructure and is at the EU s new geographic center. It provides rapid and easy access to all European markets. A state-of-the-art transportation infrastructure and logistics capabilities able to serve all European markets From Germany, nearly all of Europe can be reached by air in 3 hours and by road in 24 hours (flight, truck, and railway hours from Berlin). 3 h 1.5 h London Berlin Brussels Stockholm Riga Copenhagen Moscow 24 h 12 h Warsaw Paris Prague Vienna Budapest 2011 EU27 Germany Population (million) GDP (in EUR bn) 12,629 2,571 GDP Growth (YoY) 1.5% 3.0% Inflation 3.1% 2.5% Unemployment 9.7% 7.1% Helsinki 24 h EU member states Non-EU member states Madrid 48 h Rome Athens Source: Eurostat 2012 Note: EU-27 s center: 42 km east of Frankfurt/Main in Meerholz, Hessen, *Estimates 24

25 Germany s Advantages Germany s power of innovation is shown through its high-tech industries like machinery, automotive, chemicals, & electrical equipment. Share of High-Tech Industries of Gross Value Added (in %, 2008) 1 5,0 4,5 4,4 4,0 3,5 3,4 3,2 3,0 2,5 2,0 1,5 1,0 2,0 1,9 2,5 1,9 1,2 1,2 1,2 1,2 0,9 0,9 0,8 1,6 0,5 0,4 0,0 Germany Japan EU14 USA Machinery Automotive Chemicals Electrical Equipment Source: German Institute of Economic Research (DIW) 2011; Note: 1 High-tech industries are characterized by high internal R&D expenditures of between 2.5%-7% of the average OECD turnover; Cutting-edge technologies show an internal R&D intensity of more than 7% of the average OECD turnover 25

26 Germany s Advantages Germany offers different incentives packages to reimburse qualified investment project s expenditures. Incentives Available to Investment Projects in Germany Incentives Investment Incentives Package + Operational Incentives Package Cash Incentives Interest-Reduced Loans Public Guarantees Labor-Related Incentives R&D Incentives Investment Grant KfW Loans (National Level) State Recruitment Grants Investment Allowance 1 State Development Bank Loans Combined State/ Federal Training Support Loans Wage Subsidies Silent / Direct Partnership 1 only available in Eastern Germany 26

27 Germany s Advantages Germany provides a secure environment for foreign investment projects. Assessment of Planning Security (2011, Opinion Surveys) Efficiency of legal framework 1 Finland Netherlands Germany UK France Japan USA China Spain Poland Czech. Rep. Hungary Slovak Rep. Intellectual Property Protection² Germany UK USA Netherlands France Japan Spain Israel South Korea Poland China Protection from corruption³ Denmark Netherlands Germany Japan UK USA France Spain Poland Hungary Czech Rep. Slovak Rep. China (1 = extremely inefficient 7 = highly efficient) (0 = very weak 800 = very strong) (10 = high confidence in country 1 = low confidence in country) Source: 1 World Economic Forum 2011, ²Taylor Wessing 2011, ³Transparency International

28 Germany s Advantages Germany offers one of the most competitive tax systems among the big industrialized countries. Average corporate tax burden (2010, in %) Slovak Rep. Poland Czech Rep. Hungary Germany (minimum) Netherlands UK Germany (average) India Spain Canada (Ontario) Italy Belgium France Japan USA (New York) 19.00% 19.00% 19.00% 20.62% % 25.50% % 29.83% % % % 31.40% 33.99% % % 39.62% 2 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1 National German average. Lower overall tax rates in certain areas are possible, e.g. only 22.83% in certain municipalities. 2 Top corporate income taxation rate incl. local taxes; lower starting rates or other special tax rates available. Example USA: progressive rate for the federal corporate income tax from 15 % to 35 %. 3 A surcharge of 5% is levied on taxable income exceeds INR 1 mio. Source: Federal Ministry of Finance (BMF), Germany Trade and Invest

29 Germany s Advantages Germany is one of the most attractive countries worldwide when considering quality of life criteria. Quality of Living Index 1 in Selected Cities (City Ranking 2011) Rank City 1 VIENNA (Austria) 2 ZURICH (Switzerland) 3 AUCKLAND (New Zealand) 4 MUNICH (Germany) 5 DUSSELDORF (Germany) 5 VANCOUVER (Canada) 7 FRANKFURT (Germany) 8 GENEVA (Switzerland) 9 BERN (Switzerland) 9 COPENHAGEN (Denmark) 11 SYDNEY (Australia) 12 AMSTERDAM (Netherlands) 13 WELLINGTON (New Zealand) 14 OTTAWA (Canada) 15 TORONTO (Canada) 16 HAMBURG (Germany) 17 BERLIN (Germany) 24 NUREMBERG (Germany) 28 STUTTGART (Germany) Note: 1 Survey covering 221 cities worldwide; Source: Mercer Human Resource

30 Germany s Advantages 30

31 Contact Us Germany Trade & Invest Gesellschaft für Außenwirtschaft und Standortmarketing mbh Friedrichstraße Berlin Germany T. +49 (0) F. +49 (0) Villemombler Straße Bonn Germany T. +49 (0) F. +49 (0) Germany Trade & Invest All information provided herein has been assembled with the utmost care. Germany Trade & Invest however assumes no liability for its accuracy. 31