IIC Attracts Dollars, Creates Jobs for East

Dr. Christoph von Rohr, Chm. of Germany’s Industrial Investment Council.

Dr. Christoph von Rohr, chairman of Germany’s Industrial Investment Council (IIC) is a man with a mission. Under the umbrella of promoting foreign investment within eastern Germany, he heads a team of 33 professionals from his offices in the heart of Berlin’s historic Mitte district that seeks to help foreign companies successfully integrate themselves into the German economy.

In the last two years, Dr. von Rohr says the ICC has completed 52 projects with a total investment volume of €2.1 billion. It has been responsible for the creation of over 12,500 new jobs in the Eastern States of Germany.

"Naturally investments [in Eastern Germany] have been affected by the economic downturn – we have had fewer inquiries but those companies who we do deal with are ernestly interested and we recently have secured a number of large investors," said Amy Windorski, Marketing Manager at the IndustrialInvestment Council. "Eastern Germany is ideal for companies that are serious about their expansion plans, but need operations to be cost effective."

In fact, a survey conducted by the American Chamber of Commerce in Franfurt showed that U.S. companies will continue investing in Germany, despite the ingternational economic slump. Of the 1,200 companies surveyed, 90% considered eastern Germany a feasible investment location and over 33% acknowlledged that eastern Germany has special advantages for foreign investors. Two major Japanese chemical companies , Mitsui & Co. and Honshu Chemical Industry Company, recently announced plans to build two new projects in Bitterfeld and Leuna, Saxony-Anhalt, acccording to the IIC.

Despite such substantial progress to attract foreign companies to eastern Grmany, Dr. von Rohr notes, "Unemployment remains high in the Eastern States, averaging 17% in comparison with the 9% average in western Germany. Even 10 years after reunification, incomes in the former German Democratic Republic (GDR) are, on average, lower than in the former west. This serious situation works to the advantage of investors in the region, however, who can count on a large pool of highly qualified job-seekers with technical backgrounds.

Dr. von Rohr says that 94 per cent of East Germans have third-level education. After reunification, 25 per cent took additional training in various skills such as marketing. The labor market, he says, is far more flexible than in West Germany. There are15,000 industries that have been privatized in the past 10 years, while 4,000 companies have closed and four million jobs have been lost.

At the same time, however, 520,000 new businesses have been started. "In Eastern Germany they changed the rules because they had to. Mostly they got rid of labor market regulations."

Dr. von Rohr says the Eastern German states have a young, highly educated and flexible workforce. He concedes that 20-25 per cent of the workforce, mainly older and still pro-Communist, is not as flexible as the younter generation.. But, he adds: "Midnight on July 1st, 1990, we freed East Germany. There was no protection, like in other Eastern European countries. In the Arctic climate of global competition from one day to the other, there was no transition period."

For American companies interested in Europe’s more than 500 million consumers, the IIC is a valuable resource for those looking at investment opportunities in Eastern Germany. For further information, see www.iic.de.