Southern Germany – includes related articles – Special Advertising Section
Wolfgang Robinow
Southern Germany
It used to be said that while most people worked to live, Germans lived to work.
This may have been true of previous generations of Germans, but it is not true of Germans today. The new breed of German has an attitude about work that differs considerably from that of his ancestors. For example, Germans now average 1,700 work hours a year, compared with an average of 2,100 hours for Americans. Germans also have more holidays and take more and longer vacations now than workers of most other countries.
Yet Germany still has the fourth-highest gross national product in the world. It has the world’s largest volume of trade and has the lowest inflation rate in the industrial world.
No wonder foreign direct investment in the Federal Republic of Germany exceeds $350 billion.
As in most industrial countries, the backbone of the German economy is made up of thousands of small companies, with annual revenues of $5 million to $50 million. The largest concentration of these small and midsized manufacturing firms is in the southern states of Bavaria and Baden-Wurttemberg.
Bavaria
In 1984, three entrepreneurial German engineers, formerly employed by an American high-technology company, developed a computer-controlled machine, called a die-bonder, to attach tiny microchips to circuit boards with incredible precision. Next, these engineers developed a means of linking the chips to other components using gold wire of microscopic thickness. Today, their firm, located in Munich, produces 36 percent of the world’s die-bonders.
This is but one of hundreds of stories that illustrate the drastic change Bavaria has undergone in the years following World War II.
Of the 41,000 new jobs created in Bavaria in 1986, 33,000 were in electronics and electrical or mechanical engineering. About 40 percent of Germany’s software companies are in Bavaria.
In all, over half of all jobs in the state are in the high-tech industries. In fact, Bavaria often is referred to today as the “Silicon Valley” of Germany.
Bavarian exports total $48 billion annually. About $7 billion of these exports are to the United States, while Bavarians import about $2.7 billion from America.
Although the manufacturing sector still accounts for 42 percent of the Bavarian economy, the service industries (33 percent and growing) are catching up fast.
Many of the large Bavarian manufacturing companies have become almost household names in the United States: BMW and Audi cars, Siemens medical-technology equipment, Deckel machine tools and many others.
The German aerospace industry, which is centered in Bavaria, got its start with development of an aircraft engine by the son of the man after whom the basic automotive engine is named–the Otto motor. Otto’s son developed aircraft engines for a company whose logo is a blue propeller on a white background: Bavarian Motor Works, or BMW.
The only company located between the United States and the Soviet Union that develops manned space laboratories, MBB/ERNO, is located in Bavaria. This company’s manned space laboratories have repeatedly been used in the U.S. space-shuttle program.
The basic building blocks of most high-tech products are RAM and DRAM chips, and they could not be manufactured without pure silicon. Wacker-Chemitronic, of Burghausen, near the Austrian border, produces half of the world’s pure silicon under a patent originally granted to Siemens. And Siemens is the largest employer in Bavaria.
These few examples of today’s Bavaria show its readiness for the economic world of the next century. To ensure that Bavarian firms will continue on the cutting edge of technological change, the government has nurtured growth there of extensive facilities for research and development. These facilities are modeled after American technological-development centers like Highway 128 around Boston and the research triangle of Durham, N.C., around Duke University.
The two largest Bavarian organizations for basic and applied research, the Fraunhofer Gesellschaft and the Max-Planck Gesellschaft, have altogether some 20 research centers n Bavaria. They are well funded and can afford to attract top scientists from throughout the world, including many Americans.
Among the reasons for Bavaria’s fame throughout the worldwide computer industry are the highly specialized trade shows held at the Munich fairground. These shows attract thousands of domestic and foreign visitors, though they cannot compete with the number of tourists–17 million a year, 20 percent of them foreigners–who are attracted to Bavaria.
Baden-Wurttemberg
A car for every family is still thought throughout the world to be the exclusive privilege of Americans. But in the state of Baden-Wurttemberg, the car-to-people ratio equals that of the United States.
This is the region called the “Mittlerer Neckar,” after the river that runs through it. Stuttgart, the state’s capital, is in the middle of this region, which has a population of 600,000. The people of the region have the highest standard of living of any people in Germany.
When you approach this region, particularly from the air, you cannot help but notice how the whole area pulsates with economic and industrial activity.
Thousands of small, neat houses with gardens surround 20-story buildings. The gardens are small because space is at a premium in this country. Land prices are about $30 a square foot, and in some places the price is more than 10 times higher.
Baden-Wurttemberg, which was created by Allied fiat after World War II, is one of the most industrialized of the 10 German states, and one of the most industrialized areas in Europe.
This development really began to gather speed after the war.
Before the war, the state was largely an agricultural area, with few major industries. The region had always been considered poor, and some parts of it were in constant need of federal help, then from Berlin.
But the war changed this. There were no natural resources that could be converted into economic growth. There was farmland, of average yield, but the family farms decreased in size because of the people’s ingrained sense of justice. If there was more than one child in a family, the farm was divided when the father died. Repeating this over several generations made farms small.
Faced with such a predictable and unattractive future, many thousands of residents of Baden-Wurttemberg emigrated to the United States. Those who stayed behind concentrated on perfecting their skills. Small machine-shop operators, toolmakers, plumbers, welders and others of the traditional guilds and crafts came to the fore.
From the Black Forest, in the western part of the state, cuckoo clocks began emerging. Then came watches and other clocks, all of which are popular in America. These were the foundations on which were built industries producing precision parts. Many of the inventions, perfected by craftsmen during several centuries, answered a need to improve living standards.
The first cars were designed here by two men who had at first competed with each other: Gottlieb Daimler, who named his cars the “Mercedes,” and Karl Benz. In 1926, their firms joined under the now-famous name Mercedes-Benz. Their early cars were powered by the landmark internal-combustion engine designed by the same Otto whose son started with BMW.
Today, Daimler-Benz, the company that makes the Mercedes-Benz cars, is the biggest firm in West Germany, with annual group sales of $37 billion.
The people of Baden-Wurttemberg are known for their thrift, diligence and reliability. Germans elsewhere, in fact, sometimes refer to people of this area as Tuftler, meaning tinkerers. Many of these tinkerers have developed products that are sold today throughout the world. For example, Heinrich Lanz built the first sturdy, one-cylinder tractor in 1921. By the time World War II came, Lanz was known in every farming country. In the early 1960s, Lanz was acquired by John Deere.
The region also is home to some of Germany’s leading service firms–software developers, credit-card companies, insurers and many others. But despite the prominence of such service businesses, about one half the $150 billion economy of Baden-Wurttemberg is accounted for by machine-tool, electronics and automotive manufacturers. About one third of those firms’ production is exported, 18 percent of it to the United States.
Many new or improved industrial techniques have resulted from close cooperation among universities, research facilities and in-house research done by industry in Baden-Wurttemberg. These efforts receive limited financial support from the government. The proximity of such extensive research facilities likely influenced the decision of IBM and Hewlett-Packard to locate near Stuttgart.
Bavaria and Baden-Wurttemberg have something for everyone. With manufacturing, agriculture and high-tech industries, the region is rich with opportunities for businesses of all kinds.
COPYRIGHT 1988 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group
