Four Reasons why Europe’s Leading Cross-industry Innovation Ecosystem is the Location of Choice for Tech Businesses

As an industrial powerhouse, Bavaria offers the burgeoning tech scene optimum conditions for growth. Let’s find out why so many global companies have decided to set up a business here in 2022 and why the opportunity to cross innovate is the real draw of the region.

February 2022

Opportunities abound for B2B tech companies to grow in a diverse business landscape

Manufacturing alone accounted for 24 per cent of the Bavarian state’s GDP in 2021. Unrivalled clustering of major national and global industrial players was a key reason many companies decided to set up a base here in 2022. In fact, hardly any other location in Europe offers such a comparably large and strong potential B2B customer base in the respective industry sectors at your doorstep.

ADTechnology Europe GmbH, specialising in the design of chips, opened its first international branch in Unterschleissheim near Munich in autumn 2022.

Its customers include two of the world’s largest chip manufacturers. Back in its home country of South Korea, the company is best known as Samsung Foundry’s largest design solution partner. As ADTechnology is present in the AI, High Performance Compute, IoT, Automotive and 5G segments, access to an attractive client base and to Europe’s semiconductor ecosystem was a key reason for settling here.

Hong-Young Lee, General Manager ADTechnology Europe GmbH, says: “Bavaria has excellent technical universities and a talent pool for the semiconductor industry. It is the European headquarters of Samsung Semiconductor and much of the semiconductor industry eco-system in Europe is located here.”

Dassault Systèmes’ Managing Director Central Europe, Dominic Kurtaz, also notes that: “Bavaria is a real innovation driver in Europe, not only in Germany. This is demonstrated by the constantly growing innovative power of start-ups in combination with the largest industrial companies, many of which are also located here in Munich.”

The collaborative spirit that leads established companies and start-ups to work together is a reason why Dassault Systèmes opened a new 3D Experience Lab in Munich in September 2022.

Founded in 1981, Dassault Systèmes is Europe’s second-largest software specialist, developing and selling digital solutions for manufacturing industries, infrastructure and cities as well as health care and life sciences.

A world class R&D location and access to talent helps companies accelerate growth

The Bavarian state’s industrial prowess is one major draw for international players. Another is Bavaria’s long-standing reputation as a world-class R&D location that draws top talent from all over the world. All regions in the state have 90 to 120 per cent more European Patent Office applications than the European average.

In fact, in 2022, many companies settled here primarily to expand their R&D capabilities.

CGI, a Canadian software company  (also a top investor in 2021), expanded its strong presence in Bavaria by establishing an Innovation Lab focused on artificial intelligence and cybersecurity for the public sector in Ansbach. Around 100 highly qualified new jobs are to be created there. The ceremonial opening with and by State Secretary Roland Weigert took place in June 2022.

Simultaneously, an additional new location was established in Erlangen, with the prospect of 200 new jobs. With well-known companies such as Siemens, Schaeffler or Adidas as well as an excellent educational infrastructure with universities and colleges, the Nuremberg metropolitan region offers an exciting environment for attracting new customers and employees for CGI. 

Other players have settled in Bavaria primarily because of the opportunity to access international talent:

AutoFlight is a global tech start-up from Shanghai that develops and manufactures electric flying machines for passenger transportation.

The start-up focuses on new technologies such as artificial intelligence, highly automated flying, 5G technology and innovative materials to further develop the eVTOL (electric vertical take-off and landing) industry. The company operates a plant for the production of composite materials in Jining, China.

Mark R. Henning, Managing Director AutoFlight Europe GmbH explains why the company opened its European headquarter in Augsburg Bavaria in 2022: “There is an airport here for flight testing and certification. Augsburg is also located in a centre of competence for everything related to aviation – such as universities and colleges in Augsburg, Munich and Stuttgart, but also many supplier companies and other manufacturers. As a result, there are also more skilled workers and talents here than elsewhere.”

Hyperbowl virtual production studios, Penzing © Invest in Bavaria

Effective networks create opportunities for expansion into new fields of business.

Bavaria is excellent at connecting people quickly. Not only does it bring entrepreneurs and established companies together. It also links scientists and young talents across different industries. It’s another reason why businesses choose Bavaria as a location for growth.

Hyperbowl, developer and operator of one of Europe’s most advanced virtual production studios established its base at Penzing in 2022 primarily because of the location’s proximity to the film production and media scene in the Greater Munich area and the ease of access for major international productions.

The state-of-the art LED production stage employs advanced media technology combined with interactive game engines, motion capture, camera tracking and high-end media servers, helping to unleash unlimited creative possibilities.

Alongside and in partnership with Hyperbowl, newly formed Penzing Studios has created some 4,000 m2 of sound stage and studio facilities with full-service production services for studio productions including line producing, stage and set design, transport & logistics, post-production.

Penzing Studios and Hyperbowl are actively exploring opportunities to cross-innovate with other partners in the Bavarian region in the areas of extended reality, gaming and mobility.

A culture of open-mindedness and “glocal” perspectives provide the ideal launching pad for global players 

The strong presence of non-native global players in Bavaria helps companies connect with international markets. In general, Bavarian companies have a strong history of acting with a “glocal” mindset or, in other words, working with a global perspective but staying true to their local identity.

Lucid Motors, a luxury e-mobility brand, opened its first European studio in Munich in autumn 2022. The move was part of the company’s ambition to become a truly global brand. Zak Edson, VP of Sales and Service at Lucid says: “The expansion into Europe and the decision to offer the Lucid Air Dream Edition in this market strengthens Lucid’s position as a global brand and supports our mission to redefine standards in the electric vehicle industry”.

The Lucid brand will expand with additional studios and service centres across Europe, and the company also plans to build an engineering team in Bavaria. 

Bavaria’s cross-industry innovation ecosystem is a formula for success for high-tech businesses

A diverse business landscape, effective networks, access to talent and “glocal” perspectives: these are four key reasons why global companies choose to settle in Bavaria. Taking a closer look at the top investments of 2022, it was typically a combination of all four factors that led companies to settle here.

However, there is more to this story. If you discuss their motivation to build a business in Bavaria, decision-makers typically cite “the unique innovation ecosystem” as a key reason. What makes it so unique? The culture of cross-industry innovation that allows companies to break out of old patterns of doing business.

Emrod is a particularly good example of success in cross-industry innovation in Bavaria.

The start-up from New Zealand uses power beaming technology to enable long range wireless energy transfer that is safe, reliable and cost effective.

Emrod is now collaborating with the European Space Agency (ESA) and Airbus to unlock space-based solar power. The joint vision is to cost-effectively deliver energy generated in space for use on earth: satellites capture solar energy in space (where it is plentiful 24/7) and beam it wirelessly to the ground.

The emerging technology could make a significant contribution to decarbonising the plant. To accelerate project development and because of the proximity of their partners ESA and Airbus in Munich, Emrod founded a GmbH in Munich in September 2022.

Bavaria’s rich cross-industry innovation landscape is a catalyst for growth all over the state and in almost all sectors – from manufacturing to services. It brings together industries, disciplines and skills in new ways: radical out-of-the box thinking is shaping new and exciting collaborations by leaving silo thinking behind.

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