The state capital of Munich is the political and economic centre of the Free State of Bavaria and of the Munich Metropolitan Region MMR. What is referred to as commuter belt, the area accessible by suburban rail, consists of rather small-town or rural municipalities.
The entire region of Munich, like the MMR itself, is dependent on Munich as a world-famous urban centre. It would be fatal to weaken certain functions of this centre or to transfer some of its tasks to the adjoining region, because only a strong city of Munich will open up new opportunities and perspectives for the region as well. Indeed, the entire catchment area of Munich benefits from the cultural, sports, educational and other central facilities, whose impact reaches far beyond the metropolis that has to shoulder most of the related burden. The region is spared these expenses, which is one of the reasons why it can reduce local trade tax rates.
When looking for a place to relocate to, investors make their decision based not only on the attractive appeal of the location, but rather on criteria like real estate and infrastructure costs, availability of workforce, transport links or the afore-mentioned trade tax rates. So far, municipalities have been too busy striving to anticipate metropolitan models of success and competing for prospective investors. With great unanimity, all of them approach the same companies that are expanding their business and seeking locations. As a consequence, a downward price spiral is set in motion, valuable sites are offered at steadily falling prices. While this may be an advantage for buyers and investors, the effects on the regions are inflationary as real estate cannot be reproduced. Not to mention ecological and economic “sustainability” aspects.
Potential land resources
What can be the secret to success? Obviously, those who are successful in building their strengths and avoiding their weaknesses have the best chances to develop potentials. To hold its ground in times of increasing competition, Munich must strengthen its role as an urban centre, particularly by expanding national and international transport links. World-renowned groups of companies as well as globally active medium-sized businesses must be headquartered in Munich. The same goes for banks, insurance companies and other firms that have no or little problems paying high office rents: “Central Munich” is the right location for them. All university-related institutions, spin-offs and the like should also remain in the centre of Munich.
The required success can only be achieved by interlinking teaching and research on the one hand and research-based companies on the other. Taking business away from each other is usually detrimental to a region; research centres depend on physical proximity and concentration of knowledge.
The region can make larger and more modestly priced properties available to prospective investors. In this context, however, priorities have to be set, in line with the specific strengths of each locality and in coordination with other industrial estates, which are coherent and do not create competition between neighbouring municipalities.
For example, transport-related businesses such as logistics companies will most likely be located near motorways. While nowadays few municipalities want logistics centres in their vicinity, experience shows us that such centres usually attract more firms and service providers. The same thing happens when a big-name company, such as Roche in Penzberg, is already present. In this case, municipalities should create adequate conditions for suppliers and service providers to locate there. Possible spin-offs, buy-outs et cetera should also be given consideration. Good employee retention and identification with their company are another advantage for the region, which should not be underrated.
In order to save resources, only inter-municipal industrial estates should be designated within counties or regions. This will also help to avoid cut-throat competition among municipalities.
Coordinated action is required to make even better use of existing potentials. To ensure the further development and long-term viability of the Munich Metropolitan Region as a business location, it is necessary
1. for the MMR to perceive itself as a collective entity where all parties involved cooperate to save resources by reducing the consumption of land for commercial and industrial uses. To achieve this, among other things, industrial brownfields are rehabilitated, the economy is restructured from manufacturing to service-based operations and a division-of-labour approach is establishing itself as the standard within the MMR.
2. that commercial and industrial priority sectors be jointly defined by stakeholders in the region. Apart from micro premises for local craft firms, major commercial/industrial estates should no longer be established without proper coordination.
In addition, trade tax revenues could be allocated according to a formula to offset imbalances.
Such joint efforts will produce transparent criteria for companies and organizations planning to relocate to base their location decisions on. These criteria will be determined by MMR partners rather than imposed by unprofitable prices for properties.
The Munich Metropolitan Region is rightly regarded as a leading urban centre in Europe. There is much potential, though, for sustainable improvement according to economic and ecological principles in the field of industrial and commercial real estate.
Der Autor führt in der vierten Generation das 130 Jahre alte Kaufbeurer Familienunternehmen als geschäftsführender Gesellschafter. Peter Dobler ist Gründungsmitglied der Allgäu Initiative, Mitglied des IHK-Gremiums sowie Initiator und Betreiber der Allgäuer Gründerzentren. Er engagiert sich besonders für die Vernetzung der heimischen Wirtschaft.