Spring 2009 – Optimism in spite of “crisis”
Everyone is talking about “crisis”: the property crisis, the banking crisis, the finance crisis, the motor vehicle industry crisis, the economic crisis and the business crisis. So it is tempting to think that now is not exactly the best time to canvass for a business location. But the current situation also offers the opportunity to concentrate on our own strengths. And in the Halle-Dessau Chamber of Industry and Commerce (CCI) region as well as in East Germany generally, experience has shown that crises come and go. In short: The people in our region are crisis-tested. Businessmen especially have demonstrated the characteristics and skills which are so important in difficult times in particular: flexibility, adaptability, the ability to react quickly, the art of improvisation, creativity, decisiveness and toughness. This hands-on attitude generates courage, especially in hard times.
The Halle-Dessau CCI region: Eastern German reconstruction in a regional focus
Concentrating on our own strengths also means being aware of what we have achieved to date. It is too easy to overlook our existing and undisputed successes if we only think in categories of crisis. Economic development in the Halle-Dessau CCI region over the past decades can be seen as “Eastern German reconstruction in a regional focus”. From this point of view, quite a few remarkable successes can be seen. Certainly, we had many problems to overcome initially. Only few people who lived through the disappearance of the Iron Curtain will ever forget what a break with the past this meant. Certainly, a lot of people suffered losses but many people have also gained much.
Businessmen as standard bearers and motors of economic change …
Economic change does not happen by itself; the main standard bearers of this change are businessmen. Change means transformation, leaving the beaten track and entering unknown territory, which is always associated with uncertainty and risk. Of all people, businessmen are very well aware of this as they have to be able to successfully hold their own in the competition every day on pain of failure. While it is a matter of basic principle that competition is always uncomfortable for everybody, businessmen in Eastern Germany – including those in the Halle-Dessau CCI region – jumped into the deep end after the disappearance of the Berlin Wall in 1989.
In completely unknown territory and in a completely unfamiliar environment, they have both adapted to the new conditions and rebuilt a “new” country, an achievement which is indeed remarkable.
… with the active support of the CCI
The Halle-Dessau CCI has always endeavoured – and continues to do so today – to help create and improve basic conditions in the business world, to smooth paths and to offer advice and assistance, and in my view it has done so very successfully.
In autumn 1989, just 3,583 companies belonged to the Chamber of Commerce and Industry in the former East German district of Halle. Of these, more than 2,000 were retailers and pubs or cafés and restaurants plus another 2,000 or so state-owned companies. Today membership of the Halle-Dessau CCI has increased to around 53,000 companies in all sectors and in all sizes. Immediately after the disappearance of the Berlin Wall, the remaining member companies were initially concerned with regaining private property and contractual and complete decision-making freedom. In spite of many sluggishly resolved ownership matters, these aims were still achieved quite rapidly, generally speaking. This created the groundwork for individual entrepreneurial success, Saxony-Anhalt’s economic progress generally and the comprehensive modernization of the transport infrastructure in particular.
Business in the CCI region today: The conditions for potential success have been created
The most important success is probably the fact that the economic structure in the Halle-Dessau CCI region (as well as in the state of Saxony-Anhalt or Eastern Germany as a whole) is generally on the road to success. Of course, this can only be seen by those who look past the level of growth rates alone; it is also necessary to look at which markets have grown and in which sectors this has been achieved. What one finds is encouraging: Manufacturing in particular has been making good progress for years and in the Halle-Dessau CCI region. This includes the foodstuffs, chemicals, mechanical and plant engineering and electrical engineering industries in particular.
Growth in these sectors is achieved increasingly in national markets whose potential growth is practically unlimited. And the services sector has also developed very satisfactorily.
However, in regional markets things are different. Their (also strongly subsidy-dependent) growth took place to a large extent after the Iron Curtain disappeared, and peaked around the mid-1990s. However, the potential of these markets – in trade and in the construction industry, for example – was overestimated to a large extent. The rapidly built-up capacity became redundant were reached after a short period and fewer permanent competitive jobs were created than many people expected.
Since then this pattern has changed radically. Industry and the services contribute an increasingly large share to added value. Today, many companies are competitive – even internationally. Employee productivity is increasing steadily and real GDP per employee in Eastern Germany has almost increased more strongly over the last 15 years than the average for Germany as a whole; Saxony-Anhalt has been in the group of high achievers for years.
Another positive factor are the many research centres – state as well as private, university-based and external. And the technology and business start-up centres have become firmly established and done successful work.
Two relativizations: the decrease in the population and the smaller number and size of companies
At least two important relativizations must be considered. Firstly, the population in the Halle-Dessau CCI region – as also in Saxony-Anhalt overall – is shrinking. Since 1990, Saxony-Anhalt has lost 17 per cent of its population. Secondly, the still-existing smaller number and size of companies compared to West Germany is shrinking only very slowly. This means that more stability in existing companies and dynamism is required for business start-ups. Neither of these just happens.
Winning the future through more investment in children, education and infrastructure
We must do everything to make Saxony-Anhalt an even more attractive state to live and work in. In this context, one thing is important: investment. Firstly: investment in children. We need a more positive attitude towards children in terms of tax and pensions legislation, and more can certainly be done in the area of “family friendliness at the workplace”. Secondly, we need more investment in education, that is at primary, secondary and tertiary level, and in research and development, so that these children have the opportunity to gain the necessary job qualifications and training. Thirdly, we need investment in the infrastructure, specifically the transport infrastructure (roads, bridges, railway routes and inland waterways) along with the technical infrastructure, in order to build our path to the future.
As an independent advocate for markets and competition, a customer-oriented service provider for the private sector and, not least, as a constructive and critical partner at government level, the Halle-Dessau CCI, too, will play its part in ensuring that the future can be won in the ways mentioned here.
The author was born 1951 and studied business management and education. In 1995 and 1997, she founded the companies ABASYS GmbH and TUKAN Multimedia GmbH and in 2000, the Combit Ltd. in Rio de Janeiro. In 2000 she became vice president of the Halle-Dessau Chamber of Industry and Commerce, whose president she has been since 2008. Carola Schaar is also chairwoman of the executive board of the Ausbildungsring Halle-Dessau e.V.