„These large projects will be a boon to suppliers “

Dr. Robert Hermann, CEO of Germany Trade and Invest, on the new wave of foreign direct investments in Germany.

Dr. Hermann, many people are already proclaiming the end of globalization. Germany is receiving massive direct investment. How did this come about, how fierce was the competition between locations?

There are lots of great locations throughout the EU, of course, but Germany has a lot of advantages that allows it to attract large FDI and business expansion projects. 

It’s not just that the country is the bloc’s biggest economy. Its size means it has something to offer very diverse projects. One factor in Intel’s choice of Magdeburg for its multi fabs, worth at least 17 billion Euros, was the available of sufficient space in a location that was still quite near larger cities like Berlin, Hamburg, Dresden and Leipzig. Northvolt’s billion-euro decision to come to Heide in the north of Germany had to do with the availability of renewably produced electricity on the coastline and the connection with Europe’s leading automotive sector. And Tesla of course hopes to benefit from skilled labor force and creativity of Berlin and the surrounding area.

Tesla Gigafactory in Berlin-Brandenburg ©Michael Wolf/Wikimedia

Tesla Gigafactory in Berlin-Brandenburg

To what extent do these investments in the new value chains provide growth impetus for Europe as a whole?

These large business expansions and investments will not only benefit Germany but have wider ramifications for Europe as whole. Intel, for instance, says that the microchips it makes in Magdeburg will be used for production throughout the continent. That will obviously help create new international value chains. And this is only one example.

On the one hand, ecosystems are a prerequisite for location decisions, but on the other hand they also grow with and around the investments. What opportunities are now available to smaller companies, startups and clusters around the new growth poles in Germany?

All of these large projects will be a boon to suppliers and other businesses in these locations. To take Intel again as an example: the megafabs alone should create 20,000 jobs, and that doesn’t include suppliers. Thanks to Tesla, Berlin and Brandenburg are now leading spots for innovative automotive and tech companies. Start-ups and SMEs should benefit accordingly, as should larger firms.

So what are the objectives and themes at HANNOVER MESSE 22?

GTAI’s goal for the fair is the same as it was before the pandemic: to introduce international businesses to the advantages of Germany and help them take the first steps to set up shop here. We also want to assist German companies in going business outside Germany. Certainly, one of the major topics of conversation will be then opportunities accorded by the new German government. But first and foremost, we’re just happy to be able to meet with potential clients and partners face to face again.

Laura Venema
27.05.2022
von Laura Venema