Heading for the goal: one day after Germany lost to Spain in the World Cup semi-final, the Federal Statistical Office presented figures that enabled the long-standing world champion in exports to start dreaming again, at least in the economic sphere. The recent figures show that German exports are experiencing their strongest rise in ten years. Exports have risen by 30 per cent against May 2009. “Foreign trade is sprinting out of the crisis at top speed,” agrees Anton F. Börner, President of the Federation of German Wholesale and Foreign Trade (BGA). “Foreign trade has resumed its role as a key driver in the German economy.”
Exports contribute decisively towards Germany’s position as one of the world’s strongest economies. After being able to boast the title of export world champion from 2003 to 2008, the Federal Republic was overtaken by the People’s Republic of China in 2009. The world’s most highly populated country is also Germany’s most dynamic export partner. For instance, it is the major buyer of German machinery and Germany’s second-largest import partner. The example of China also illustrates that Germany is shaping the world economy not only through exports and imports. The Federal Republic has been the most important European investor in China since 1999. Some 2,500 German companies are represented with investments in China. The Volkswagen plant in Shanghai is particularly impressive: in 2010 it is most likely to produce more than one million vehicles, making it the world’s largest car factory. In Nanjing the German chemicals giant BASF is operating its largest hi-tech factory in Asia in a joint venture with the Chinese oil company Sinopec.
Germany is valued throughout the world as an investor. In the federal state of Rio de Janeiro, the integrated materials and technology group ThyssenKrupp has just opened a state-of-the-art plant costing 5.2 billion euros this June. It is the first large-scale steelworks to be built in Brazil since the 1980s. Also in Brazil, São Paulo is the largest German industrial location worldwide with 1,000 German companies operating in the city. Deutsche Bahn is currently realizing the largest contract in the company’s history with the rail network project for the Emirate of Qatar. And in the American state of North Carolina Siemens is creating a new global centre for the production of gas and steam turbines and generators that do justice to the sector’s ecological demands.
At home, Germany is also strongly backing innovation. The Federal Republic spends 2.53 per cent of its gross domestic product on research and development which is above the OECD average of 2.28 per cent. In 2008 alone the German economy’s spending on innovation amounted to 128 billion euros. Around one quarter of the total was invested in automobile construction, an exemplary sector that stands for the worldwide recognition of quality in German industrial products.
The fact that Germany has much more to offer is illustrated, among other things, by the positive development of the culture and creative economy. It includes such subsectors as music, literature, broadcasting, advertising and design. Meanwhile, the creative economy in Germany employs more than one million people and is setting a significant example on the country’s way to becoming a knowledge-based economy. Movements in this direction are also illustrated by developments in Germany’s employment distribution. For instance, the proportion of people working in the service sector has risen from just under 60 per cent in 1991 to 73 per cent today.
In the eyes of international investors, the high level of qualification amongst employees in Germany is one of the country’s outstanding strengths as a business location. In a new study carried out by Ernst & Young, foreign executives also praised the quality of life, the infrastructure and the quality of research and development in Germany. Some 45,000 international companies have a base in Germany, including the 500 largest in the world. As a single example, the Spanish telecommunication group Telefónica O2 Europe has been investing 3 billion euros in the expansion of Germany’s landline and mobile phone infrastructure between 2007 and 2010.
Siemens holds a special position among the German companies who are investing abroad. With a total of 32,500 researchers and developers in more than 30 countries, the group is regarded as a forge of innovation in the German economy. In the Interbrand ranking this aspect contributes to Siemens’ respectable position of 47th among the world’s 100 most valuable brands. Even higher in the list were the business software company SAP (27th) and the automobile manufacturers BMW (15th) and Mercedes-Benz (12th).
In recent years Germany has also developed an excellent reputation in the sunrise sector, for instance in environmental technology. Germany has achieved a world-class performance in wind energy production with an installed capacity of almost 26,000 megawatts, and it is outstripped only by the USA. In solar electricity production Germany is the undisputed leader with an output of almost 10,000 megawatts, including an increase of 3,800 megawatts simply last year. The commitment to “green technologies” is paying off. Germany is the source of almost every fifth solar cell and almost every third wind turbine. It is this readiness to engage in constant innovation that generates such a powerful driving force in exports, and this benefits the whole of the economy.
