Handelsblatt Explains

Why Germany dominates the global trade-show business

Internationale Automobil-Ausstellung (IAA) 1963
No tire kickers. Source: Picture Alliance

Come April, some 200,000 visitors will descend on the Hanover Trade Fair again to take part in the world’s largest industrial trade fair, held on the world’s largest trade-fair grounds. The event is a so-called “Fachmesse,” geared at professionals who want to invest millions in industrial machines, from the latest and smartest robots to 3D printers that make bionic structures almost as Mother Nature would.

The Hanover fair is one of many huge events of its sort in Germany. Two months later, Hanover will also host the CeBit computer expo, which last year attracted 200,000 visitors after reaching a peak of 850,000 during the dotcom boom. Frankfurt has an auto show and a book fair, Düsseldorf has its boat show, Berlin its tourism fair. All told, Germany hosts some 150 international trade fairs each year for 180,000 exhibitors and 10 million visitors. According to the Association of the German Trade Fair Industry (AUMA), two-thirds of the world’s leading trade fairs take place in Germany. In this particular form of matching sellers to buyers, the country is the undisputed world leader. Why?

Other countries have trade fairs, too, of course. Paris still has the biggest air show, vying with Farnborough in Britain. Detroit has its auto show, and Las Vegas its CES consumer electronics show. But history, geography and economics have conspired to make Germany the land of fairs.

In the Middle Ages, all the major European trade routes crisscrossed Germany.

Its traditions of commercial exchange date back centuries. In the Middle Ages, all the major European trade routes crisscrossed Germany, with hubs forming in Frankfurt, Leipzig and other commercial entrepots. The first rail lines followed those same routes, as did the autobahns later.

The Leipzig Trade Fair, for example, traces its origins back to the 12th century and is the oldest trade show still in existence. Leipzig lies at the intersection of two medieval trade routes, the east-west Via Regia and the north-south Via Imperii. Located in what was later East Germany, Leipzig even maintained its role as a commercial center under communism, hosting a trade show for the Comecon economic bloc.

Starting with the Northern Renaissance, technological breakthroughs in Germany joined geography as a driver of the fairs. The first Frankfurt Book Fair followed on the heels of Johannes Gutenberg’s invention of the printing press in nearby Mainz. To this day it is the largest book fair in the world and the venue for the biggest deals in publishing.

Leipziger Messe – Buchmesse 2017 am 25.03.2017
All booked up. Source: Leipziger Buchmesse

The politics of early-modern Germany also helped. Unlike centralized Britain or France, the German-speaking lands were a quilt of principalities and bishoprics loosely tied together under the banner of the Holy Roman Empire. Frankfurt was a “free city” and could set itself up to prosper as a commercial and financial center. Cities like Nuremberg or the Hanseatic ports of Hamburg, Bremen and Lübeck were in a similar position, becoming the “special economic zones” or “offshore havens” of their time.

Once the Industrial Revolution of the 19th century made Germany the continent’s manufacturing powerhouse, the trade shows grew in size with this new economy. In the 20th century this growth was disrupted by two world wars and the Great Depression. But the tradition was revived immediately after defeat in 1945. Hanoverians were still clearing the rubble of the Allied bombings, when local politicians founded a new trade fair organization to fill in for Leipzig, which had landed in the Soviet zone. Hanover’s first fair, in 1947, was explicitly labeled an “export fair.” It soon became a great marketing tool for Germany’s booming machine exporters.

As West Germany enjoyed its “economic miracle” in the 1950s, the country’s trade shows rose again. They have piggy-backed on the country’s economic prowess ever since. Machinery occupies center stage. But Germans are also the most avid travelers, making ITB Berlin the world’s leading travel fair. Daimler invented the automobile and Volkswagen is the world’s biggest carmaker, so the International Motor Show in Frankfurt is the world’s premier industry event. German construction-machinery firms aren’t the biggest, but Bauma, a fair held every three years in Munich, rules as the world’s biggest trade gathering even in that sector.

Nowadays, the accumulated expertise in hosting trade fairs creates its own competitive advantage. Along with the prosaic machinery fairs, Germany hosts the world’s oldest art fair each year in Cologne (since 1967). The Photokina fair, also in Cologne, is the most important show for photography and imaging. Other fairs specialize in sanitary installations (“the bathroom experience” according to the website) or toys (in Nuremberg).

Germany’s fairs are a huge business, with combined revenues of more than €3 billion a year. The economic boost from knock-on spending is even bigger, equivalent to an estimated €23.5 billion. And the fairs naturally help drive other German exports. But above all they are proof of the power of tradition. What began as quirks of geography centuries ago grew into clusters of expertise and a niche in the modern and global economy. Germany appears destined to defend this niche for centuries more.

Darrell Delamaide is a writer and editor for Handelsblatt Global in Washington, DC. To contact the author: ddelamaide@gmail.com

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