Bavaria, Germany’s largest state by area and No. 2 by population, is one of Europe’s most advanced and successful economic regions. Its gross domestic product of EUR 610 billion in 2020 puts it ahead of 22 of the 28 EU member states. Although Bavaria is home to global players like Adidas, Allianz, BMW and Siemens, the backbone of its economy is a vibran population of medium-sized enterprises, many of whom are acknowledged world market leaders. Bavaria’s advanced and strong manufacturing sector and its role as Europe’s leading ICT hub puts it at the forefront of cross-industry digital innovation – in areas such as autonomous driving, AI, IoT, cybersecurity and AR/VR. It is the ideal base for national and international B2B tech leaders and start-ups.
- Industry power with scope for cross-industry innovation
- Prime ICT hub for digitalisation and start-ups
- R & D strength – top talent – excellent universities
- The Bavarian way of life – tradition and joie de vivre
10 of the 40 companies comprising Germany’s DAX share index are headquartered in Bavaria. Such global leaders – in combination with a vast number of top medium-sized enterprises and start-ups in a range of sectors, from Industry 4.0 and mobility to additive manufacturing, healthcare and insurtech – provide the ideal base for digital cross-industry innovation. Businesses, whether national companies, international players or start-ups, can draw upon Munich’s strength as Europe’s leading ICT hub, a string of excellent universities throughout Bavaria and access to renowned research institutions and facilities like Fraunhofer and Max Planck. Further benefits include ample supply of top talent – and, not least, the special Bavarian way of life ensures a healthy work-life balance.
An exemplary testimonial to Bavaria’s strengths in industry, innovation and digitisation was the decision behind IBM’s choice to establish its global competence centre, the Watson IoT Center, in the Bavarian capital of Munich. John Kelly, IBM Senior Vice President of Cognitive Solutions and Research, explained that Munich was chosen against strongest global competition for its unmatched combination of access to leading industrial companies, excellent universities, a track record of technical expertise, its attraction for top-class talent and the business- and investment-friendly politics of the Bavarian state government. The project, one of IBM’s core strategic investments, created more than 1,000 jobs and has proven to be a true catalyst for innovation.
Cross-industry innovation mean sectors, disciplines, and areas of expertise that previously had little or no interaction joining forces to create something entirely new and solve problems in innovative ways. Many new technologies are applied in highly diverse areas, making it essential to take a cross-industry view – for example, AI is used to drive new mobility concepts, while robotics are revolutionising manufacturing and medical operations. By pooling resources and expertise and forming fresh und unorthodox partnerships, companies benefit from each other’s strengths. In today’s ever-shifting business landscape collaborating to break new ground is how progress is made and companies remain at the cutting edge. Bavaria’s broad range of highly successful and diverse industries, extensive networks, a huge pool of talent, start-ups and SMEs provide the perfect framework for such a collaborative approach, creating a mutually beneficial synergy effect.
At the core of Bavaria’s success is its tremendous diversity. As well as being one of Europe’s most successful and multifaceted manufacturing locations, it is home to numerous non-industrial sectors like finance, insurtech, and health. But this broad range of sectors can only thrive if the appropriate human resources are there. This is the second of Bavaria’s major strengths. The Bavarian capital Munich is home to Germany’s top two universities, the TUM and LMU, as well as numerous world-renowned scientific and research institutions like the Max Planck Institute and Helmholtz Centre. In addition, the region’s excellent dual education systems produces thousands of skilled craft-trade graduates every year, ensuring an expert and varied workforce. The third key factor is Bavaria’s “glocal” perspective: non-native global and local players that help you connect with global markets. And last but not least the effective networks.
4 key factors of Bavaria’s success
Automotive supplier Dräxlmaier and BMW have been using the natural fibre kenaf as a particularly lightweight “green” material for the interior finishing of electrical vehicles. To ensure that this innovation is both sustainable and benefits all partners along the supply chain, they set up a project with the German development agency GIZ and their partner Rainforest Alliance. Since 2015, based on the SAN (Sustainable Agriculture Network) standards, they have provided training to enable nearly 1,000 small farms in Bangladesh to produce higher quality kenaf in larger yields, in turn securing higher incomes for the farmers. The training also helps to ensure safer working conditions. The result is a mutually beneficial, sustainable supply chain with all actors contributing to transparency and traceability.
Leading global corporations also have also established themselves here, including Microsoft, Intel, Google, Samsung Semiconductor Europe and Huawei. The presence of such corporations functions as a bridge between Bavaria and the rest of the world, opening new markets to companies – including internationally minded SMEs – and drawing additional business and international talent to the region. This global mix of companies has access to an equally diverse group of exceptional and international young talents from the region’s renowned universities and research institutes. The number of international students in Bavaria has risen by over 50% in the last five years, and it is now the second most popular federal state for international students in Germany. The Bavarian capital Munich is also extremely cosmopolitan, with almost one third of residents holding a foreign passport, outstripping even Berlin.
Invest in Bavaria, founded in 1999, offers companies interested in setting up their business in Bavaria a comprehensive range of support as well as free, confidential and tailored services throughout all stages of the setting-up process, from inception to implementation.
With a dedicated team of experienced, multinational professionals, we support companies at offices in Munich, Nuremberg and Hof as well as internationally through Bavaria’s 26 global representative offices.