Ernst & Young survey: Germany top investment location

Germany is especially valued as business location for its transportation and telecommunications infrastructure, the high quality of research and development and its well-trained workforce, according to the annual European Attractiveness Survey released June 30.

Western Europe is still the world’s most attractive economic area – standing up to the challenge of both the United States and China – for 63% of executives surveyed.

“What makes Europe remain the most attractive destination for investment is the flexibility and the diversity of markets present in the region,” said Ernst & Young Chairman and CEO James Turley. “Knowledge is a key factor drawing investors to Western Europe, but in the last five years, economies in Central and Eastern Europe have been transformed from low-cost workshops into markets with huge potential.”

Individually, Germany ranks fifth as a location worldwide, down from third place in 2004. In a key survey finding, Poland and Hungary are challenging the traditional supremacy of the traditional Western Europe power players Germany, the UK and France, particularly in terms of labor costs. In individual country rankings, Poland placed fourth, behind China, the US, and India and ahead of Germany in overall attractiveness as a business location.

Specifically, Germany ranks tops in:

• Transport and logistics infrastructure, as a result of Germany’s central location in Europe
• Domestic market
• Local labor skills level
• Quality and capacity of research and development

Germany comes in second, behind the UK, in terms of access to financial investors, transparency and stability of the regulatory climate, social climate and language and culture. In terms of aid and support measures from public authorities, Germany ranks second behind France.

Germany especially lagged behind other countries in terms of labor costs.

In the future, high-tech products and services will have a significant impact on the German economy, ahead of sectors like telecommunications, the chemical industry and automotive, according to survey findings.

The survey makes clear what Germany’s strengths are, said Ernst & Young partner Peter Englisch. “ German engineers continue to enjoy a good reputation,” he said in a press release. “Foreign investors know that they will find an outstandingly educated and motivated workforce. Germany’s future lies in research and development, in the high-tech arena. So to make Germany fit for the future, we have to do more education and training of workers. We can’t be cheaper than Poland or China, but we can be better.”

Source: Germany Info - German Embassy Washington, D.C.
http://www.germany-info.org