Chris Schmidt - istockphoto Game on Germany! Accessing New Markets in Europe Peter Alltschekow Managing Director Marketing & Communications Director Eastern Germany
I. The Company s Profile: About Germany Trade and Invest II. South Korean-German Economic Relations III. Eastern Germany: Advantages as a Business Location 2
The Agency Germany Trade & Invest is the foreign trade and inward investment promotion agency of the Federal Republic of Germany. The agency is promoted 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 foreign market information. promotes Germany abroad as a high-performance economic and technology location in order to attract investors who create/secure jobs in Germany. consults potential foreign investors in terms of their settlement plans and realizes the required project management support in Germany. An additional special focal point of activity lies in promoting the economic development of the new federal states including Berlin. 3
Focus Eastern Germany The New Federal States in Germany maintain a unique position stemming from their history. Since the fall of the Berlin Wall more than 20 years ago, both public and private organizations have successfully invested in Eastern Germany s infrastructure. For this reason among many others, Eastern Germany is now one of the most attractive locations for foreign investors. This special region offers access to a modern logistics and communications network, an excellent R&D landscape, a highly-qualified and motivated workforce, comparatively lower costs, and some of the most attractive federal and state investment support packages available in Europe. Eastern Germany truly offers a cutting-edge field at the heart of Europe. 4
I. The Company s Profile: About Germany Trade and Invest II. South Korean-German Economic Relations III. Eastern Germany: Advantages as a Business Location 5
Foreign Trade Germany is South Korea s major trade partner in Europe. South Korean Imports by Country (2010, shares in percent) South Korean Exports by Country (2010, shares in percent) China 16,8% China 25,0% Others 37,6% Others 41,6% Japan 15,1% USA 10,7% Taiwan 3,2% Indonesia 3,3% Germany 3,4% Australia 4,8% Saudi- Arabia 6,3% USA 9,5% Germany 2,3% India 2,5% Taiwan 3,2% Singapore 3,3% Hongkong 5,4% Japan 6,0% Source: Germany Trade & Invest 2011 13.09.2012 6
Foreign Trade Germany mainly imports computer, electronics and optical products from South Korea, while major export goods are machinery and vehicles. German Imports from South Korea by Goods (2010, shares in percent) German Exports to South Korea by Goods (2010, shares in percent) Chemicals 3,9% Electrical equipment 3,5% Vehicles and parts 3,8% Others 9,7% Computer, electronics and optical products 40,5% Metal products 2,4% Metal 3,7% Pharmaceutical and similar products 2.4% Others 11,6% Machinery 28,1% Machinery 4,5% Electrical equipment 7,1% Other Vehicles 34,1% Computer, electronics and optical products 12,3% Chemicals 13,6% Vehicles and parts 18,8% Source: Federal Statistical Office 2011 September 13, 2012 7
Foreign Direct Investment South Korea ranks 15th concerning FDI Stocks in Germany. South Korean FDI Stocks in Germany (2005-2010, in EUR m) 5.000 4.500 4.000 3.881 4.340 4.573 3.750 4.462 4.060 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2005 2006 2007 2008 2009 2010 Source: Bundesbank 2012; Note: n.a. means data confidential 8
Foreign Direct Investment Samsung Electronics is the strongest South Korean firm in Germany with a turnover of EUR 6.1 billion. Ten important South Korean companies in Germany by turnover (2011, in EUR m) 3.500 6,138 3.000 3.000 2.939 2.850 2.500 2.000 1.500 1.000 500 0 587 324 235 170 131 85 Source: Bureau van Dijk Electronic Publishing, Markus Datenbank June 2012 Note: *latest data available refers to 2010, **latest data available refers to 2009; only companies listed in the commercial register 9
Korean Population in Germany In 2009, about 23,550 South Korean people were living in Germany. Embassy Consulates * 16 states are divided into four consular districts by two Korean embassies and two consulates Consular District Hamburg North-Rhine Westphalia Bremen Schleswig- Holstein Hamburg Kiel Niedersachsen Hanover Mecklenburg- Vorpommern Schwerin Saxony- Anhalt Magdeburg Brandenburg Potsdam Berlin Consular District Berlin Number of South Koreans: 4,604 (2,827 in Berlin) Number of South Koreans: 2,765 (944 in Hamburg 249 in Bremen) Consular District Bonn Düsseldorf Wiesbaden Rheinland- Pfalz Mainz Saarland Bonn Saarbrücken Hessen Frankfurt Baden- Württemberg Erfurt Thuringia Bavaria Saxony Dresden Consular District Frankfurt Number of South Koreans: 9,267 (979 in Frankfurt 569 in Munich) Number of South Koreans: 6,914 (1,109 in Düsseldorf 596 in Cologne) Stuttgart Munich Source: Embassy of South Korea in Germany 2011, Federal Statistical Office 2011, Statistical Office of the Cities 2011 10
I. The Company s Profile: About Germany Trade and Invest II. South Korean-German Economic Relations III. Eastern Germany: Advantages as a Business Location 11
Eastern Germany: Advantages as a Business Location The strengths and potential found in Eastern Germany provide investors with numerous arguments to choose Germany as a business location. Leading Economy Quality of Life 10 1 2 Global Player Secure Investment Environment 9 3 High Productivity Competitive Tax Conditions 8 4 Excellent Workforce Inviting Incentives 7 6 5 Power of Innovation First-Class Infrastructure 12
Excellent Workforce Germany has the most stable labor costs in Europe. Growth of Labor Costs in Total Economy 1 (2002-2011, yr. Average Growth in %) Germany 1,6 France 2,4 Nerherlands 3,1 Spain 3,3 United Kingdom 3,7 Czech Republic 5,7 Poland 5,8 Hungary 7,2 Slovak Republic 7,5 0 1 2 3 4 5 6 7 8 Source: Eurostat 2012 Note: Earliest available data for Spain refers to 2007, earliest available data for France refers to 2009, 1) Total Economy includes NACE Rev. 2, B-S 13
Excellent Workforce Germany has the largest pool of employees in high-tech industries in Europe. Employees in High-Tech Industries and Cutting-Edge Technologies in the Manufacturing Sector (in % of Total Employment, 2009) Germany 10,2 Czech Republic 9,5 Slovak Republic 8,6 Hungary 7,9 EU-27 5,7 Poland 4,8 UK 3,8 Spain 3,7 Netherlands 2,7 0,0 2,0 4,0 6,0 8,0 10,0 Source: Eurostat 2011 14
Excellent Workforce 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 2010. 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 2010 15
Power of Innovation Germany is the global number one in creating innovations for the future. Patents Granted at the European Patent Office (2011, in Absolute Numbers) Germany USA 13.583 13.382 Japan 11.649 France 4.799 UK Netherlands 1.948 1.818 China Spain Czech Republic Hungary Poland Slovak Republic 515 381 55 46 45 3 0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 Source: European Patent Office 2012 16
World-Class R&D in Germany International managers value Germany as a top R&D location. Top R&D locations assessed by international managers (2009, in %) 25 24 The overall performance of the German R&D system is recognized by international decision makers. 20 15 18 16 Its excellent reputation in R&D makes Germany an attractive offshoring destination for foreign 10 9 9 companies. 7 6 5 3 0 Note: The survey is based on the views and opinions of 700 international decision makers; Source: Ernst & Young 2009 17
German Ingenuity in Europe Germany is the central R&D location in Europe, providing a sound innovation environment for research-oriented investments. Innovation Performance of European Countries by Innovation Union Scoreboard 2010 The comparative assessment of European states in the Innovation Union Scoreboard (IUS) underlines Germany s reputation as a leader in innovation performance. Intellectual assets and the innovation activities of SMEs are assessed as Germany s top strengths. Note: The innovation index is a composite of 25 indicators measuring innovation, such as public and business R&D expenditures, educational background, international patent applications; Source: Federal Ministry of Education and Research 2010; based on data of the IUS 2010. The IUS is an instrument of the European Commission, developed as part of the Lisbon Strategy. 18
Contact Thank you for your attention! Peter Alltschekow Managing Director Marketing & Communications Director Eastern Germany Germany Trade & Invest Foreign Trade and Inward Investment Promotion Agency Friedrichstraße 60 10117 Berlin Germany T. +49 (0)30 200 099-0 F. +49 (0)30 200 099-111 office@gtai.com Villemombler Straße 76 53123 Bonn Germany T. +49 (0)228 24993-0 F. +49 (0)228 24993-212 info@gtai.de www.gtai.de 2012 Germany Trade & Invest All information provided by Germany Trade & Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided. 19