Germany has one of the most competitive and innovative manufacturing industry sectors. The sector accounts for a large share of the German economy, at 21% and 7.7 million jobs.
The economy is known for its backbone of highly innovative small and medium-sized enterprises (SMEs) and family-owned companies1. Referred to as Mittelstand companies, many of them are world market leaders in their respective niche segments. Together with internationally renowned German MNCs such as Bayer, BASF, Daimler, Volkswagen, and Siemens, they make up Germany’s manufacturing industrial base.
German companies make up 10% of Europe’s manufacturing sector. In the European Union, German firms account for over a quarter of manufacturing turnover and for over a tenth of global exports of manufacturing products.
The German government recognises that the digitalisation of manufacturing, also known as advanced manufacturing or Industry 4.0, is vital to maintain its lead in the manufacturing space. The aim of the government’s “Industrie 4.0” initiative is to increase manufacturing productivity levels by up to 50% and halve the resources required.
The foundation of the country’s manufacturing success is built on very proficient, small and medium-sized family-owned companies called Mittelstand. Examples include well known white goods brand like Miele and automotive manufacturer like Elkamet. The Mittelstand account for around 70% of all manufacturing exports and almost 80% of employment.
Your business can seize opportunities in the range of German industries that include automotive, chemicals, electrical equipment, and machinery.
In addition, there are many opportunities for Singapore companies to co-create technology solutions in advanced manufacturing with German companies. You can partner key German industry clusters and research institutes, such as Fraunhofer, for intellectual property transfer and co-development of manufacturing solutions.
1 Ministry of Trade and Industry, 2021
Germany is home to many automotive manufacturers like BMW, Continental and Bosch, Daimler and Volkswagen, and they make up a core component of Germany industrial landscape. With the growing focus on carbon emission and mobility, automotive companies have to adapt to a new future and are looking at areas related to connectivity, autonomous vehicles, shared mobility & services, electrification and sustainability. Singapore companies and start-ups with unique and globally competitive solutions in these areas are welcome to contact us find out more.
Germany is one of the top exporters of medical technology ranking number 3 after China and the US. Companies like Siemens Healthineers, Biotronik, Draegerwerk or Eppendorf stand for high quality medtech devices that are used in hospitals and laboratories worldwide. Besides these known names the sector is characterised by its large number of SMEs, many of them family-owned and proud of their "Made in Germany" label. Though most of these smaller companies have their supply chain organised within Germany or EU there are potentially manufacturing opportunities with those that are already selling sizeable volumes to Asia or looking at Asia as their key market.
Despite the strong medtech industry in Germany there is still demand for innovative medical technology to be imported from overseas. With 82.2 million inhabitants, nearly 2,000 hospitals, almost 400,000 practicing physicians and 20 million patients needing healthcare services on an annual basis, Germany is the largest market for healthcare products in Europe. The recent push of the German government for digitalisation in healthcare has led to a new digital healthcare law in place since 1 January 2020 that allows digital solutions to enter the German healthcare system through a fast lane process. This has opened up opportunities for medtech owners that offer app based solutions that patients can actively use to improve their health conditions.
Companies that are interested to bring their products into the German market should consider presenting themselves to healthcare providers and potential distribution partners at the MEDICA exhibition which takes place every November in Düsseldorf and where Singapore is regularly present with a national pavilion co-organised by Enterprise Singapore.
Germany is a top e-commerce market in the European Union. Its e-commerce revenues of US$70.3 billion (S$94.9 billion) in 2018 are expected to grow by 6.9% to US$91.7 billion (S$123.8 billion) by 20222.
This is driven by its large population of 82 million, high Internet penetration rate and millions of consumers making online purchases regularly. In addition, the buyers are savvy online shoppers who have high levels of purchasing power. User penetration for the German e-commerce market is expected to hit nearly 80% by 20223.
We can help you identify e-commerce marketplaces to extend your reach into Germany, in verticals such as baby products, consumer electronics, fashion & accessories, and skin care & cosmetics.
Besides the attractive German e-commerce market, Singapore businesses can consider Germany as a springboard to ease your entry to other European markets. Germany is positioned in the centre of continental Europe with a web of interconnected transportation options for swift connections. In the e-commerce world, shipment time is crucial for customers.
On the other hand, if you are an e-commerce solution provider, or offer warehousing or logistics services, you can tap into opportunities to provide the capabilities, solutions and networks for German firms into Asia.
2 eCommerce Report 2018, Statista, 2018 3 eCommerce Report 2018, Statista, 2018
The German financial and insurance industry has a size of €8.4 trillion (S$12.9 trillion) in assets and is one of the biggest financial industry in Europe worth €44 trillion (S$67.58 trillion) in 2019. Frankfurt is home to the European central bank, the biggest banks in Germany (Deutsche Bank, Commerzbank), the German stock exchange, the German development bank KfW and important regulatory bodies like the German Central Bank and BaFin. The financial industry is undergoing major changes by new technologies like Blockchain and Artificial Intelligence (AI) and rise of new fintech companies entering the market. Some examples of notable fintech startups are the N26 (digital bank), Clark (insurance platform) and Solarisbank (Banking as a service solution). On the other hand, traditional banks and companies are developing innovative digital solutions by working with startups to implement their solutions. They often favour working through a corporate innovation arm, accelerator, or financial network to speed up their product development. Singapore fintech companies and startups that are interested to work with German banks or financial companies should consider getting into contact with these innovation arms and networks like TechQuarter and Plug and Play Fintech in Frankfurt.
Germany is a key connecting hub in Europe for both physical goods and virtual data, offering you opportunities in areas like data centres, infrastructure, and logistics. In the virtual data space, Germany is building the foundation for a digital future with plans to introduce the new 5G mobile communications standard by 2025.
In the meantime, the German government will expand the deployment of fibre optic infrastructure, as well as mobile communications capacities in central and rural regions. The goal is for 98% of households in Germany to have an internet connection with a minimum of 100 megabits per second by 2022.
Singapore businesses can take advantage of Enterprise Singapore’s efforts to cultivate key in-market multipliers for investment leads identification, and collaborate with strategic partners in global markets.
You can also consider partnering German firms to identify technology demand for Asia infrastructure projects across various infrastructure verticals like buildings, renewables, and transport, and utilities.
Connect with us to find out how you can tap on key in-market multipliers for investment leads and collaborate with strategic partners in global markets.
Germany has a vibrant startup ecosystem concentrated in Berlin and other tech hubs. There are an estimated 1,800 German technology companies in 2017, with more than half of the startups found in Berlin, Hamburg, Hannover, Rhine Ruhr, Munich, and Stuttgart.
The German government has thrown its support behind the technology sector with the Digital Agenda 2020 initiative, aimed at making Germany the “No. 1 digital growth country in Europe".
To stay updated on German market information and insights, subscribe to our newsletter.