IBM Business Report Recognizes Improved Investment Environment in Germany

Jan 14, 2010, 11:48 ET from Germany Trade and Invest

BERLIN, January 14 /PRNewswire/ -- Germany is continuously improving in international business location rankings, according to a new country report by IBM Global Business Services. The "Global Location Trends" study marks a considerable increase in foreign direct investment for Germany. Reasons cited included moderate wage growth rates in recent years, tax reductions and the general improvement of economic conditions. The report names the solar energy industry in Eastern Germany as an example of Germany's clear quality advantage.

Germany managed to considerably improve its competitive position in 2008 despite the significant decrease in investments worldwide. The country also benefitted from the tendency of companies to increasingly seek stable and reliable investment locations. According to the study, 26,700 jobs were created in 2008 through 709 foreign investment projects. Compared to the previous year, this represents an increase of approximately 8,000 jobs and more than 200 projects in 2008. The industries Machinery & Equipment, Business Services, and Information and Communications Technology (ICT) profited from Germany's competitive international investment position.

"The results by IBM Global Business Services concur with our findings. Germany as a business location has gained further recognition. Now more than ever, investors value the excellent and reliable quality the country offers - and this especially in a globally unstable environment," says Michael Pfeiffer, Chief Executive of Germany Trade & Invest, the foreign trade and inward investment agency of the Federal Republic of Germany. Germany Trade & Invest has recorded a considerable increase in investor interest by the emerging economies of Asia. Foreign direct investment (FDI) from China and India has more than doubled in recent years. Currently, FDI figures stand at EUR 242 billion for India and EUR 355 billion for China.

US Companies Create Jobs in Germany

Despite this growth, industrialized countries continue to be the most important investors in Germany. These countries account for almost 90 percent of the jobs created through FDI projects. Every third job leads back to the USA. Thereafter, Japan and Germany's European neighbors were also important to job creation with their investments. IBM Global Business Services attributed the large labor effect to the industries Industrial Machinery and Equipment with an increase of ca. 300 percent, Information and Communications Technology (an increase of roughly 100 percent) as well as Business Services (an increase of ca. 40 percent).

The study highlights the high level of quality of Germany as a business location based on two industry examples: the Solar Industry and the Shared Service Center sector of Business Services. The American company Sitel is named as an example of an investor in the contact center segment, which opened an office in Berlin in 2008 and has in the meantime created around 1,000 jobs. While the solar industry has been shaken by the global recession, Germany has also secured its position in this industry with its competitive advantage based on quality. Factors cited for this level of success include relevant experienced staff, an established industry, market proximity and attractive operating costs. Here the Eastern German federal states are primarily highlighted.

Germany Trade & Invest is the foreign trade and inward investment promotion agency of the Federal Republic of Germany. The organization advises foreign companies looking to expand their business activities in the German market. It provides information on foreign trade to German companies that seek to enter foreign markets.

    Eva Henkel
    Phone: +49-(0)30-200-099-173
    Fax:   +49-(0)30-200-099-111

SOURCE Germany Trade and Invest