- Bavarian businesses view Switzerland as a more favorable relocation destination.
According to the Association of Bavarian Business (vbw), Bavaria stands as the world's second top industrial powerhouse, trailing only Switzerland, with Germany as a whole ranked fifth. vbw went on to evaluate the industrial competitiveness of 45 nations.
"Bavaria's success factors lie in its innovative ecosystem and the synergy between industry and services," states vbw CEO Bertram Brossardt. "In a global perspective, Bavaria excels due to its business freedom and market openness. When it comes to infrastructure, Bavaria places ninth. However, it lags behind in terms of expenses, primarily due to high labor and energy costs, as well as high taxes. There's also a lack of skilled and labor forces."
Industry contributes to a quarter of Bavaria's total economic output, exceeding the figure in most other economies. Yet, Brossardt notes a gradual trend of deindustrialization. "New investments are predominantly happening overseas, parts of the value chain are being shifted, and less foreign capital is flowing into Germany." It's high time for the federal government to implement countermeasures.
Competing Nations: Asia and North America
Nations exhibiting both high competitive intensity, as indicated by share in common markets, and excellent location quality include Canada, the USA, Japan, South Korea, Netherlands, Denmark, Sweden, Finland, and Australia. Bavaria shares the highest competitive intensity with China. However, despite leading in competition, China has "slightly below-average" location quality and ranks 25th overall.
The industrialized nations still maintain advantages in terms of government policies, infrastructure, and knowledge. The developing nations, however, have the upper hand in costs. Some developing nations even hold an edge in specific areas, despite the Czech Republic (rank 20) and Malaysia (rank 21) topping the list as the best-performing emerging economies in the industrial location comparison.
"Despite Bavaria's strong industrial stance, attracting investments within Germany, particularly in Bavaria, seems to be a challenge due to high labor and energy costs, as well as taxes, as mentioned by Bertram Brossardt."
"In the international arena, Bavaria's position as the world's second top industrial powerhouse puts it in fierce competition with other industrial powerhouses like China, which while trailing in terms of location quality, leads Bavaria in shares of common markets."
