Healthcare industry helps Germany reach record levels of FDI in 2018

Foreign direct investment (FDI) in Germany hit a record high last year, with more companies from abroad investing and locating in the country than ever before. The Federal Republic's inward investment agency, Germany Trade & Invest (GTAI) reports that healthcare played a role in attracting 2062 companies, or eight percent more than invested in Germany in 2017.

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The German healthcare sector contributed significantly to this growth, along with business services; IT, communications, and software; consumer goods; and industrial machinery and equipment, says GTAI. The projects include building new facilities and businesses as well as expanding existing ones. Statistics show most of the investors came from the US, followed by Switzerland, China, and the United Kingdom (UK).

FDI originating from the US broke records in 2018 as well, with 345 projects. Meanwhile, FDI from the UK was ten percent greater than in 2017. Analysts say this record-breaking growth in investment from the UK is attributable to Brexit, the country's plan to leave the European Union (EU) this year. Many note that the number of British companies opting to either base or expand businesses in Germany in 2018 – 168 – is more than a third greater than before Britain voted to approve Brexit in 2016.

GTAI CEO Dr. Robert Hermann told the weekly newspaper, Die Zeit, that 45 percent of British companies investing in Germany said Brexit had driven them to invest more or only exclusively in Germany. Hermann said, "Many value the good environment for locating here. The size of the market and Germany's location within the EU are convincing arguments."

These statements are consistent with why Germany's economy is so alluring to businesses from abroad in general, notes GTAI. Within the healthcare industry in particular, the country's performance in research and development (R&D), its highly-educated work force, quality infrastructure, and high productivity, are characteristics that have long made Germany a very competitive location.

While Germany is home to major pharmaceutical companies and manufacturers of medical technology, for example, healthcare – particularly medical technology, medical biotechnology, and telemedicine – is dominated by small and middle sized enterprises (SME). In response to an article on the record levels of FDI in the German news magazine Der Spiegel, a small business made the point that two of Germany's main advantages are that it is a "safe location for investment and we are located in the heart of Europe."

Germany's government, its industries, and institutions of higher education and research cooperate intensely to promote innovation and development in the life sciences. Among a broad range of programs are clusters of excellence and innovation and policies such as Industrie 4.0. The Export Initiative for the German Healthcare Industry, HEALTH MADE IN GERMANY, is best able to guide individuals and businesses from abroad in finding the right partners within Germany's thriving healthcare sector.

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