Germany: Miraculously Growing Economy

Development cooperation between Pakistan and Germany goes back to 1961, with the funding volume to date totaling some EUR 2.5 billion. Pakistan was thus one of Germany's first partner countries. Funding was initially provided to the energy, industrial, transport and telecommunications sectors. Today, the priority areas of Pakistan-German development cooperation are 

1. Good governance
2. Energy
3. Health 
4. Education (basic education as well as technical and vocational training)

Good Governance 

As a result of its outdated administrative structures and alternation between elected civilian governments and military rule in Pakistan in the past, resilience is an important issue. The level of gender equality is also unsatisfactory, with women in Pakistan continually facing social, economic and legal discrimination.

In recent years the Pakistani Government has introduced reforms to strengthen democratic structures, the focus being on administrative and tax reforms. The reform process also encompasses the empowerment of women in Pakistani society and the reduction of discrimination and violence against women. Germany is committed to supporting Pakistan in the implementation of these reforms. A wide-ranging program of tax reforms at national level, to establish administrative structures in Khyber Pakhtunkhwa (KPK) and to combat violence against women in Khyber Pakhtunkhwa (KPK) was launched in 2010.

Energy  

Development cooperation between Pakistan and Germany in the priority area of energy began back in the 1960s. In view of the great potential of natural energy sources in Pakistan, no other sector has received more German development funds. The energy sector in Pakistan still faces serious challenges. Energy supply, especially in rural areas, is inadequate; power shortages are one of the biggest obstacles to economic development. Germany supports Pakistan in achieving its goal of improving the supply of environmentally friendly energy and more efficient energy use.

Health  

The health situation in Pakistan is one of the worst in Asia. A high maternal and child mortality rate goes hand in hand with insufficient health care for the population. One of the main causes of the inadequate health care situation is a shortage of personnel in public health services. The majority of the population does not have access to health insurance. Infectious diseases such as tuberculosis are very prevalent and ‘lifestyle diseases’ such as high blood pressure, cardiovascular disease and diabetes are also increasing dramatically in all population groups. Germany has been supporting Pakistan since the 1980s in building capacities in the health system in order to be able to deliver efficient and fair health care services to the population.

Education

Despite progress in certain areas, the public education sector in Pakistan is one of the least developed in the world. Only just over half of all five- to nine-year-old boys and girls go to school. Those who do can expect to find inadequately trained teachers and outdated schoolbooks. There are not enough training vacancies for the youth of Pakistan. Few in Pakistan have undergone formal vocational training and many are not sufficiently qualified to meet the needs of business. Pakistan-German cooperation in the field of education aims to improve the institutional environment in the education sector and to increase the quality of education in the long term.

Automotive Industry in Germany

Germany occupies a unique position in international automotive industry. The patent issued to Karl Benz’s vehicle powered by a gas engine on January 29, 1886, is generally considered to be the birth certificate of the automobile. German OEMs account for 17 percent of global passenger car production also the home of the world’s first four-stroke internal combustion engine, 

Around ten new patents are registered each day that makes Germany the most innovative auto nation in the world. The automotive industry remains the country’s most important economic sector – and Europe’s single largest auto market. Germany also hosts the largest concentration of OEM plants in Europe. Annual EUR 19.6 billion commitment to automotive research and development (R&D) is reflected in the creation of new environmentally friendly technologies. Conventional drive technologies are being optimized and new modes of driving have been developed. 

A recent study from Ernst & Young among European automotive companies shows that Germany is the No.1 automotive production location, especially in terms of innovation, product quality, and productivity.

Industry Strength 

• Largest automotive market in Europe with 5.44 million passenger vehicles manufactured and 2.95 million new registrations, including 826,203 imported vehicles.
• Industry revenues added up to over EUR 357 billion in 2012.
• In 2013, 4.2 million automobiles were exported (increase of 2% to 2012). The export quota for passenger vehicles totaled more than 77%.
• Imports of motor vehicles and components totaled more than EUR 81.5 billion in 2012.
• The industry has a workforce of about 756,000, an increase of 2% to 2012.

Germans-The World Leader in Auto R&D 

No other industry invests as much in R&D – around EUR 19.6 billion in 2011 alone. As such, the auto industry in Germany accounts for more than one third of the country’s total R&D expenditure. 

Moreover, auto manufacturers and suppliers located in Germany are among the world’s leading patent applicants. Around 3,650 patents per year make the German auto industry the world patent champion – no other country registers as many auto industry patents.

The Industry in Numbers

• The automotive industry is the largest industry sector in Germany. In 2011, the auto sector recorded turnover of EUR 351billion – around 20 percent of total German industry revenue.
• J German passenger car and light commercial vehicle manufacturers recorded foreign market generated revenue of EUR 194 billion for the year 2011. For the same period, domestic market generated revenue of EUR 80 billion was created. 
• The automobile industry is one of the largest employers in Germany, with a workforce of around 712,500 in 2011.
• Germany is Europe’s number one automotive market in terms of production and sales; accounting for over 30 percent of all passenger cars manufactured and over 20 percent of all new registrations.
• Germany also hosts the largest concentration of OEM plants in Europe. There are currently 47 OEM sites which are producing for major auto brands. 
• German automobile manufacturers produced more than 12.9 million vehicles in 2011 – equivalent to 17 percent of worldwide production. 
• Germany is the European car production leader: some 5.9 million passenger cars (and more than 439,000 trucks and buses) were manufactured in German plants in 2011.
• Around 77 percent of cars produced in Germany in 2011 were ultimately destined for foreign shores.
• Germany’s automotive sector is the country’s most innovative industry sector, accounting for 33 percent of total German industry R&D expenditure of EUR 59.2 billion. 
• R&D expenditure for 2011 was EUR 19.6 billion – helping Germany consolidate its globally leading position in the world economy. 
• R&D personnel within the German automobile industry reached a level of just over 89,000 in 2011. 
• In marked contrast to other European countries, Germany’s unit labor costs continue to fall – decreasing by a yearly average of 1.2 and 1.5 percent respectively for the year 2010. In 2011, unit labor costs rose a modest 1.2 percent.

Energy and Environmental Technology of Germany

In Germany, the energy and environmental technology industry has been influenced by the political goal of ensuring that by 2050, 80 percent of the electricity produced in the German market will be generated from renewable energy. Ever since the federal government decided to turn off all nuclear power stations by 2022, the industry has been focusing on alternative sources of energy. Closely bound up with this is the goal of stepping up digitization in the energy sector. 

The smart use of modern information and communications technology (ICT) is helping society to save energy in many ways. For example, the government is developing the energy infrastructure by creating intelligent networks and energy-efficient technologies. To do so, it has set up a dedicated research program to support businesses and research facilities as they develop innovative technologies for tomorrow’s energy.

Wind Power – Export Success

The wind power industry is a relatively young industry. During the last few years, the use of wind power was established and expanded, creating more than 101,000 new jobs. Today, about 8 percent of all electricity used in Germany is generated by wind power. The export rate in this sector is 75 percent. Germany currently has about 23,000 wind power stations, and there’s more to come. During the next 20 years, wind parks are set to be erected in the North Sea and the Baltic Sea.

Bio-energy – It’s the mass that does it

Bio-energy is becoming increasingly important in Germany. It is generated from organic material such as wood, but also from energy plants such as corn, which are called biomass. In 2011, the rate of energy generated from biomass increased by 9 percent compared to the previous year. In the same year, 91 percent of the heat produced by renewable energy sources came from biomass. According to Germany Trade & Invest, an association which promotes export and markets German as an investment location, the industry wants to make sure that by 2030, 18 percent of electricity and 15 percent of heat used in Germany will be generated from bio-energy.

Combined Heat and Power Technologies (CHP)

Germany is European leader of combined heat and power (CHP) technologies. In CHP, fuel generates mechanical energy and heat at the same time. This means that the heat generated as a by-product of energy generation, does not go unused. This industry has immense growth potential. This is because technically, it is possible to use CHP energy to cover up to 50 percent of the electricity demand. The federal government intends to promote the use of CHP, so that it will account for 25 percent in 2020, compared to 12.5 percent today. The overall aim is to improve climate protection.

Solar Energy – A thriving industry

Solar thermal energy: Solar thermal energy is a system which harnesses solar energy for heat generation. With 1.66 million solar installations in 2011, Germany is the largest solar thermal energy market in Europe. In 2011, the industry spent around €1 billion on investments in new installations which convert solar energy into thermal energy. The solar thermal energy industry currently employs 14,100 people (2011).

Photovoltaic: In photovoltaic, electrical power is generated from solar radiation. With a market share of over 50 percent, Germany is the world’s largest exporter of photovoltaic products. 

In 2012, German photovoltaic companies employed 100,000 people, generated revenues of €13.0 billion and invested around €11.2 billion into new installations.

Environmental technologies

Both fossil raw materials and the options for disposing of waste and residue of chemical production are becoming increasingly scarce. As a result, life-cycle management and sustainable water management are becoming more and more important for supplying the German economy with the raw materials it requires. These sectors apply intelligent environmental technologies and use resources in a sustainable manner: They thus contribute to ensuring that the raw materials used in the business cycle are used for as long as possible and in a manner that is kind to the environment. 

Germany is a worldwide leader in almost all sectors of environmental technology. In 2011 the companies in this industry employed about 370,000 workers. In 2030, Germany is projected to generate revenues of €1 billion in the environmental technologies industry.

Chemicals and Pharmaceuticals in Germany

In terms of revenue chemical and pharmaceutical industry is Germany’s 3rd largest industrial sector. Product range includes fine chemicals, specialty chemicals, petrochemicals, inorganic chemicals, synthetic materials, agrochemicals and fertilizers, laundry and cleaning agents, cosmetics, pharmaceuticals, paints and adhesives.

A top-notch industry

According to the data provided by the German chemical industry association VCI the German chemical and pharmaceutical industry is by far the largest European chemical and pharmaceutical industry. This sector generated the revenue of €186.8 billion in 2012. The revenue from the chemical and pharmaceutical industry adds up to nearly 11 percent of the total revenue in Germany’s processing industries. In addition, with a market share of over 11 percent, Germany was the world’s largest exporter of chemical products in 2011. The country exported chemical products with a total value of €160 billion.

According to VCI, over 90 percent of Germany’s chemical companies are small and medium-sized enterprises (more than 1,900). These companies are often based in one of the country’s numerous chemical parks. Excellent infrastructure, combined with an unified system of raw materials and energy, enables companies based in these parks to remain competitive in their production.

Some 434,000 workers are employed in this industry. Many of them are science, technology and engineering graduates. According to figures from the Cologne Institute for Economic Research (IW), 126 out of every 1,000 employees in the industry are graduates in these key fields, which are in particular demand in Germany.

3rd Most inventive Industry in the world

Research is basic element of success of the chemical and pharmaceutical industry in Germany. According to VCI the estimated expenditures for research and development was around €9.6 billion in the year 2012.In result of research high number of innovations and wide range of products make the industry a major supplier for other industries. 

In the year 2010, 77 percent of the companies in Germany’s chemical and pharmaceutical industry brought new products to the market. Some €13 billion altogether was invested in innovation. According to figures shared by Germany Trade & Invest, Germany holds third place worldwide in the number of patent applications filed for chemical products. 

Germany is also among the top-ranking countries in its number of patent applications for pharmaceutical products. Innovations in the chemical and pharmaceutical industry are actively supported by the federal government’s High-Tech Strategy

Germany – The Logistic Leader of Europe

Germany is Europe's Logistics leader with annual revenues over EUR 220 billion in 2011.This sector comprises numerous specialized logistics companies which offer time-critical, demand-responsive and just-in-time / just-in-sequence services covering all types of freight services. Germany is also a global leader in logistics innovation, technology and services with over 2.8 million industry employees. The companies are equipped with tools and experience to provide seamless logistics solutions for every kind of good applies highly efficient processes which ensure low costs.

Logistics sector is capable of fulfilling the demands of every industry like textile, automotive, high and heavy transport due to its niche and technologically advanced capability. Let’s have a detailed overview of the potential.

Textile logistics is equipped with

• Supply solutions from field to shop
• Globally integrated production systems
• Demand-oriented supply
• Testing of outer fabrics
• Doubling, rolling, cutting, removal of shade differences
• Washing, drying, ironing, special effects 
• Warehousing, picking and packing, quality management, printing of labels, customs clearance
• Repair and sewing of B-grade goods
• Handling of returns

Automotive logistics facilitation meets the benchmark by providing following state of the art solutions

• KANBAN inventory replenishment schemes and JIT deliveries to line side
• Subassembly of components  
• The delivery of vehicle sets as SKD, MKD or CKD
• Pre-delivery inspection – storage, repair, testing, fitting, de-/waxing, protective covers, homologation
• Inspections of the vehicles before final delivery 
• Automotive aftermarket supply 
• Spare parts supply
• Procurement logistics activities 

High and heavy transport requires

• An appropriate structure clearance
• A capable road infrastructure
• Special handling equipment and transport vehicles
• A combination of different transport modes
• extensive preparation (long lead time)
• Complex procedure

German Scholarship Programs: Opportunities for the Best Minds

Deutscher Akademischer Austausch Dienst (DAAD)

The Federal Foreign Office funds a variety of scholarship programs, which are important for the implementation of its research and academic relations policy. The programs enable the top international specialists of tomorrow to undertake periods of study or research in Germany. At the same time, they lay the foundation for research partnerships with the world’s best minds. Jun Zhu, a lawyer from China and doctoral student in Göttingen, is one of them. Like many highly qualified young graduates from abroad, he receives financial support from the.

Quality is the only thing that counts when German Academic Exchange Service (DAAD) considers applicants for its scholarships. Chinese law student Jun Zhu (born in 1982) was an ideal candidate: he had excellent grades, a Bachelor’s degree in German studies, a double Master’s degree from the Sino-German Institute for Legal Studies in Nanjing and a passionate interest in law. Since the autumn of 2008 he has been studying for a doctorate under the supervision of Professor Rüdiger Krause at the Institute of Labor Law at Georg-August-Universität Göttingen. Jun Zhu finds labor law particularly fascinating because it is still relatively new territory in China.

In 2009 the DAAD awarded one year scholarships to some 4,000 foreign students like Jun Zhu to continue their studies or complete a doctorate in Germany. Additionally, the DAAD, the world’s largest scholarship-awarding organization, offers numerous other programs. The lion’s share of scholarship holders comes from Central and Eastern Europe, Latin America and Asia, and most of them are doctoral students of mathematics or natural sciences as well as philology or cultural studies. However, the proportion of Master’s degree scholarships is increasing rapidly. These scholarship programs are funded by the Federal Foreign Office: education and research are regarded as a strong bridge between Germany and its partners worldwide. In 2010, Germany’s Federal Foreign Office will provide a total of 230 million Euros in funding for education, research and development within the framework of its international cultural and education policy. The existing range of scholarships has been significantly expanded since the Research and Academic Relations Initiative was launched in 2009. Overall, Germany’s Federal Foreign Office is providing some 140 million Euros of financial support for visiting students and researchers from abroad. Most of these scholarships are being awarded through the DAAD. The Initiative is also deliberately supporting highly qualified individuals from conflict regions. Other important partners are the Alexander von Humboldt Foundation, political foundations and the German Archaeological Institute (DAI).

The DAAD scholarship amounts to 650 Euros a month for undergraduates, 750 Euros for graduates and 1,000 Euros for scholarship holders engaged in two years of research activity. A total of 540 university teachers in some 80 selection committees worldwide select the recipients based on quality-related criteria. The DAAD supported a total of 33,000 foreign undergraduate and graduate students in 2009. The 2009 DAAD budget included 83 million Euros in funding for foreign scholarship holders. A total of 710,000 foreigners have come to Germany with DAAD support since 1950.

Agricultural Machinery and Equipment Industry in Germany

Where next generation technologies and industry expertise meet

The German agricultural machinery and equipment industry ranks among the country‘s top ten M&E sectors. In 2013, the industry generated a turnover of EUR 8.3 billion — an increase of 9 percent compared to 2012. Especially the production of tractors saw an impressive upsurge of almost 16 percent. Over the last decade the industry‘s turnover more than doubled, growing at an average annual pace of 7.8 percent. The industry‘s 30,000 employees produce more than 27 percent of agricultural machinery and equipment components manufactured in Europe. Thus, Germany became by far the Production Leader of the Continent. 

With an export quota of 73 percent this sector also contributes to the country‘s worldwide leading machinery export position. Moreover, Germany represents with 20 percent also the largest domestic market for agricultural machinery and equipment in Europe. One of the main drivers for the successful development of the German agricultural machinery and equipment industry is seen in the country’s extraordinary coverage of the value chain. Numerous research institutions, the proximity to key supplying industries like electronics, robotics, materials or software and a strong industry base pool the resources of all actors within the value chain to promote innovation and R&D excellence. The innovative business environment also explains why Germany is among Europe‘s top FDI destinations for Agricultural, Construction and Mining machineries.

Here is a brief overview of leading features of agricultural machinery and equipment industry of Germany.

Proximity to the customer

• Largest domestic market for agricultural machinery and equipment in Europe (2013: EUR 5.5 billion)
• Direct link to customer & easier customization (batch size 1)
• Made in Germany“premium brand

R&D Infrastructure

• Europe‘s largest agricultural machinery and equipment research location (R&D 2013: ~EUR 500 million)
• Advanced  development of automation technologies

Shorter time to market

• Short reaction time, just-in-time delivery, optimized supply chain - especially in volatile market
• Close proximity to European markets (no trade barriers)
• Huge variety of suppliers from all sub segments

Optimized costs

• Excellent transportation infrastructure
• Reduced long-term transport inventories

Excellent trained labor

• Highly qualified and flexible labor pool (more than 80 percent of the German workforce either has trained at vocational training institutes or possesses an academic degree)