Wolfgang Tiefensee: Thuringia – Between traditional industry and high-tech

The diversity and the right mix of location advantages make Thuringia an ­appealing location for investors. Here, the future is rooted in tradition: Carl Zeiss, Ernst Abbe and Otto Schott once created the basis for a productive collaboration between business and science. Entrepreneurs and scientists continue to write these success stories in Thuringia.

 

Thuringia is a state with a long-standing tradition of technology and business, which the region benefits from till this day. The central location, short distances as well as the close link between business and science and excellently trained, highly motivated professionals are all trademarks and keys to the location’s success. In Thuringia, we are used to thinking outside the box! Here, entrepreneurs and scientists have always worked in a close and profitable collaboration.

The centres of Jena and Eisenach, for example, have a long industrial tradition. In Jena, Zeiss, Abbe and Schott are still considered to be entrepreneurial role models and pioneers of the German optical industry. In 1898, the first motorised vehicle was produced in Eisenach. Later on, it was the site for the production of the Dixi vehicles invented by Gustav Ehrhardt. In 1928, BMW acquired the production line, marking its entrance into the automotive industry.

The university city Jena has been home to the glass and optical industry since the 19th century. The companies, in particular the Carl Zeiss group, are known all over the world for their ­inventions that revolutionised the microscope and the developments of the planetarium.

The university city Jena has been home to the glass and optical industry since the 19th century. The companies, in particular the Carl Zeiss group, are known all over the world for their ­inventions that revolutionised the microscope and the developments of the planetarium.

After the reunification, we started building on this tradition and expanding it. Today, Thuringia has an extensive industrial diversity that ranges from the automotive, optical, plastics, medical, aerospace and food and beverage industry up to mechanical engineering, which makes it the state with the most diversified industrial structure of the new eastern states. With around 80 employees per 1,000 inhabitants, Thuringia offers the most industrial jobs after Baden-Wurttemberg, Bavaria, Saarland and Bremen. This is one of the reasons that Thuringia records high levels of growth since German reunification and has developed into one of the most dynamic regions in Germany.

Thuringia’s economic upswing is mainly driven by small and medium-sized companies located in the state. After all, medium-sized companies make up 99 per cent of all companies in Thuringia with a share of 76 per cent in turnover of the economy as a whole. Internationally active companies such as ZEISS, Jenoptik, Siemens, Bosch, Opel, BorgWagner, Mitec, IHI Chargings Systems International or Bauerfeind are also located in Thuringia. Major corporations, such as Rolls Royce, Lufthansa, Daimler or Schenker have also discovered the location advantages in Thuringia.

The strength of Thuringia is its central location in the heart of Germany and Europe as well as its state-of-the-art transport connections. The excellent rail and motorway network and the proximity to the Frankfurt am Main and Leipzig/Halle airports in particular make Thuringia a central hub for the international movement of goods and therefore also attractive for logistics companies and online merchants such as Zalando, Redcoon, DHL, Rhenus, Fiege and Dachser. In order to continue meeting the growing demand for commercial and industrial areas in the future, Thuringia’s Ministry of Economic Affairs started a large-area initiative, which currently comprises eight easily accessible locations with a potential area of 1,000 hectares. It is intended to ensure that there will be enough space for investments and new business ideas in the future.

The eleven universities in Thuringia, including the renowned Bauhaus-Universität Weimar – a university in Weimar specialised on creative and technical innovations, offer a wide range of study courses with excellent prospects for the future.

The eleven universities in Thuringia, including the renowned Bauhaus-Universität Weimar – a university in Weimar specialised on creative and technical innovations, offer a wide range of study courses with excellent prospects for the future.

The appeal of Thuringia as a location will be further en­­hanced by a new ICE hub in the state capital of Erfurt in 2017. The new ICE route completes the European high-speed network in Thuringia and significantly decreases the travel time from Erfurt to Frankfurt am Main, Dres­­­den, Berlin and Munich. The expansion of the ICE hub offers opportunities for the development of business and tourism in our state. However, it is also important to connect the rural regions to the ICE hub in Erfurt.

The dynamics of economic development in Thuringia is also reflected in the low unemployment rate. On average, 85,200 men and women were unemployed in 2015 (5.5.per cent less than in the previous year). Thuringia has the lowest unemployment rate of all of Germany’s eastern states and meanwhile also less than some of the western states. With a current unemployment rate of 6.9 per cent (as of December 2015), we are steadily approaching the national average in Germany.

An important factor that drives the economic success of Thuringia is also the diverse research landscape with nine – ten with the transformation of the University of Cooperative Education into a dual university Gera-Eisenach as of April 2016 – universities and universities of applied sciences, a total of 14 institutions of the Fraunhofer and Max Planck Societies as well as Leibniz and Helmholtz Associations and eight economically-orientated research institutions. In order to implement ideas into readily marketable products and services quickly, Thuringia’s Ministry of Economic Affairs supports the technology and knowledge transfer in many different ways. Exemplary, for example, is the funding of industrial research groups, different applications and new business centres as well as funding for clusters of companies and research institutions.

Internationally active companies such as the automotive supplier BorgWarner or the logistics service provider like Redcoon benefit from Thuringia‘s ideal location conditions.

Internationally active companies such as the automotive supplier BorgWarner or the logistics service provider like Redcoon benefit from Thuringia‘s ideal location conditions.

Thuringia’s goal is to be among the top states in Ger­­many when it comes to research and innovation and significantly increase the innovation potential by 2020. We have paved the way for this development with the current university funding. Thuringia provides approx. EUR 1.7 billion for its universities through 2019. This corresponds to a cumulative increase of 160 million euros or four per cent annually and represents an enormous, yet necessary effort for a state like Thuringia that “lives” on its ideas, knowledge and innovation. The “ProExzellenz” program supports seven additional research centres and three excellence professorships at universities in Thuringia through 2019. The aim is to support outstanding research projects that further strengthen and visualise Thuringia’s role as a research and technology location. Furthermore, based on Thuringia’s research and innovation strategy, over EUR 300 million of European funds are invested in business-oriented research, thus for development and research projects at the respective companies.

Strengthening Thuringia as an investment and employment location, while also catching up to the successful western states in Germany, remains the most important goal for the future. To this end, Thuringia’s Ministry of Economic Affairs uses its promotion policy to create targeted incentives. The focus is on the “Verbesserung der regionalen Wirtschaftsstruktur” (improving regional economic structures, GRW) promotion programme, which is the most important instrument of the investment promotion in Thuringia with a volume of around 100 million euros per year. In addition, we want to use the Thuringian medium-sized companies initiative to provide support for the countless small and medium-sized companies in the state in achieving their growth targets along by taking advantage of the existing differentiated offers of the investment, innovation and consultation promotion.

The economic and technological support makes an important contribution towards increasing the productivity of the companies and enhancing the appeal of the jobs in the businesses. This is important in order to keep up in an increasingly competitive environment for qualified professionals. Thuringia is no longer a low-wage state – we rely on good work, reasonable wages and reconciliation of family and professional life.

An effective innovation and growth policy focusing on medium-sized companies is an essential pillar of Thuringia’s economic policy. We will offer solutions that respond to current issues to enhance the attractiveness of Thuringia as a business location. In doing so, we will constantly use our successful history as a source of inspiration. To date, this strategy has proven very successful for Thuringia.

Tiefensee-I-Portrait-RGBWolfgang Tiefensee
The author has been Minister of Economy, Science and Digital Society since 2014. Wolfgang Tiefensee was the Minister of Transport, Building and Urban Development in Chancellor Merkel’s cabinet from 2005-2009. Since 2009, he has been chairman of the “Forum Ostdeutschland” of “Sozialdemokratie e.V.”. In 2009 he was elected member of the German Bundestag (parliament). He was re-elected in 2013, but renounced the mandate at the end of 2014 when he took office as the Minister of Economic Affairs in Thuringia.