Bavarian Titan

Germany’s Own Bay Area

Oktoberfest
Munich's Oktoberfest celebration is famous. But it's top of the list in Germany for many other reasons, too. Source: Sven Hoppe/dpa

When in 2016 the research institute Prognos first attempted to measure how well German regions and cities were prepared for digitization, scientists had a problem. Regardless of how they approached the data, one city and region stuck out and messed with their metric. That’s because the study’s winner was so far ahead of the rest of the field that it received its own category: 5 Stars Plus. That would be Munich and the surrounding southern Bavarian region.

Regardless of category, Munich almost always comes out on top in studies on German cities. Take criminality: the number of crimes committed per resident in Munich is half that of Berlin. Among the 10 largest German cities, only Stuttgart in the west can even half-way compete.

In cooperation with Handelsblatt, Prognos measures not only the digital preparedness of German regions, but also has created a “Future Atlas”, which predicts the potential of 402 regions and metropolitan areas. Munich was beaten in only a single category – that is, by the commuter belt surrounding the city.

Among the 10 strongest counties in terms of purchasing power, the city of Munich is joined by four of its surrounding regions: Ebersberg, Fürstenfeldbruck, Dachau and Starnberg. The latter tops the list nationwide.

“The Munich metropolitan area has long established itself as exceptional within Germany,” said Prognos head Christian Böllhoff. “The dynamics of the economy found in the region are comparable with global growth centers such as the Bay Area around San Francisco,” he explains. Mr. Böllhoff is especially impressed by the fact that Munich has consistently held the top position and expanded its growth since the creation of the Future Atlas: “We’re seeing how a number of growth factors interact and mutually influence one another.”

The Benefactor: Susanne Klatten

The 55-year-old is Germany’s richest woman, heir to the Quandt fortune. A successful businessperson in her own right who has helped to increase the family fortune, Ms. Klatten is a staunch advocate for, and funder of, start-ups and creative technologies. Her latest project is a Munich space, the Kreativquartier on Leonrod Place, that will act as an incubator and workspace for suitable projects.

The Insider: Sabine Bendiek

Ms. Bendiek is the first female to head the German office of software giant Microsoft. She hopes to elevate the status of the Munich office in the eyes of US bosses, and her focus is on further software development, particularly when it comes to code related to the so-called Internet of things – that is, the interconnection of domestic appliances.

The Advertising Guru: Florian Haller

In 2016, Florian Haller, the head of the Serviceplan agency, opened the annual Innovation Day conference in Munich by flying in from the Salzburg mountains, then parachuting down to land among the delegates, who were there to discuss media trends. Rather appropriately, the whole thing was captured using a 360 degree camera. Mr. Haller started off as a paper boy and under his leadership, Serviceplan has become one of the largest owner-operated advertising agency groups in Europe and the biggest in Germany.

The TV Titan: Thomas Ebeling

The CEO of Germany’s largest private television company, Pro Sieben Sat 1 Media SE, has not only overseen the successful 2016 stockmarket launch for his firm, he also has his experienced fingers in a variety of digital pies. Besides working out how best to compete with new kids on the block like Netflix, Mr. Ebeling also came up with the idea of trading advertising time for shares in tech start-ups. This means that Pro Sieben now boasts an impressive portfolio of these, primed for the future.

The Angel Investor: Felix Haas

For digital creatives who also like beer and sausages, Mr. Haas really is an angel. He is a co-founder of the annual Bits & Pretzels “founder’s festival”, which brings together up to 5,000 would-be start-up founders with sector leaders and digital visionaries. And once that conference finishes, Munich’s infamous Oktoberfest begins. That’s not all Mr. Haas does though. After starting his career in California, where he has a number of important digital patents to his name, he started and led several, profitable online companies, including IDNow, which instantly verifies individuals’ identities via a web browser or smart phone. He is also involved in senior roles in more than 50 German internet companies.

The Bio-Tech Twins: Thomas and Andreas Strüngmann

Pharmaceuticals were always a family affair for the Strüngmann twins. Their father ran a family-owned drug company, which they sold to start a new firm, Hexal, which they then also sold to pharma-giant Novartis, for the princely sum of over $7 billion. Using this money, the twins, who have a reputation as nice guys and tough negotiators, have invested further, mostly in bio-tech and pharmaceuticals. In 2008, they founded a neuroscience research center in Frankfurt that they named after their father.

The Online Fashionista: Delia Fischer

After working as an editor at the German version of Elle and Elle Decoration for over six years, Delia Fischer quit and took a rather large risk: During her time as a journalist she had noticed a gap in the online market – exclusive, luxury home and lifestyle products, but at a reduced price. In 2011, she founded the online shopping club, Westwing Home & Living, to fill that gap. The club, which has gone from five staff to a business with around 1,600 employees, now has millions of members worldwide, in 14 countries; almost all are female.

The Researcher: Axel Ullrich

He has led ground-breaking research into cancer prevention and has been the director of the Max Planck Institute of Biochemistry’s molecular biology department since 1988. Despite his long career, the 73-year-old is still an adventurous investor. He has founded five different bio-tech firms, as well as one specializing in gene technology.

Among the key growth factors are well-balanced industries, which are relatively resistant to crisis. These are augmented by a high density of public and private research and development institutions that enable new scientific discoveries to be quickly converted into marketable products. In comparison to Berlin, Hamburg, Cologne, Frankfurt or Düsseldorf, Munich also boasts well-balanced social conditions.

Nevertheless, Munich’s exceptional stature also extends to some negative categories, such as the extremely expensive housing market. Compared to San Francisco, Munich is still pretty tame. But by German standards, apartment prices are astronomical.

28 p63 German Cities in Comparison-01

Also, unlike in other large German cities, real estate prices aren’t lower further outside the city center – thanks to the economic strength of the surrounding region.

“This prevents those with normal or lower salaries from moving to the suburbs,” said Mr. Böllhoff. The alternative for many has been to settle down in neighboring cities such as Augsburg, Rosenheim or Ingolstadt. Mr. Böllhoff argues that real estate prices are an example of how the region’s strengths can also turn into risks. Currently, Munich is becoming increasingly unaffordable for technical specialists, trainees and workers with mid-level qualifications.

“The city is now experiencing shortages of workers, as our Future Atlas shows. That is alarming,” said Mr. Böllhoff.  San Francisco is not so different.

Handelsblatt staff including Christian Rickens contributed to this piece. To contact the authors: rickens@handelsblatt.com

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