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Frankfurt big ambition

Located on the Germany-Poland border, Frankfurt (Oder) stands within close proximity to Berlin and offers excellent connections to much of Europe. However, it is its innovative thinking – coming from its tech-savvy workforce or, on a grander scale, through its 'twin city' arrangement with nearby Słubice – that is attracting the interest of investors. 

The small, riverside city of Frankfurt (Oder), situated on the border between Germany and Poland, is on a mission to raise its profile as a 'gateway to the East'. Not to be confused with major German city Frankfurt am Main seven hours westward, Frankfurt (Oder) is so named thanks to its geographic position on the Oder River, which serves as a natural border between Germany and Poland to the east. A main city of Brandenburg, one of Germany’s 16 federated states, its seat next to Polish city Słubice and proximity to the capital Berlin – one hour away by train - makes it well positioned to attract business. 

Frankfurt (Oder) is located directly on the east-west transport route of the North Sea-Baltic Corridor, a pivotal part of the Trans-European Transport Networks. It is at the interface of two major national markets, with easy access to the emerging markets of eastern Europe. The city also benefits from the human capital in Berlin, 90 kilometres away, from which more than 1000 workers commute into Frankfurt (Oder) every day. In total, more than 13,000 people commute into the city to work each day. Berlin Schoenefeld airport is located a 45-minute drive away. 

Despite these advantages, Frankfurt (Oder) has struggled to grow, particularly since German reunification. With a peak population of about 87,000 in 1989, resident numbers have steadily fallen to nearly 57,000 today as a result of the massive demographic shift that came with the opening of what was East Germany to the rest of the world. For East Germany as a whole, mass migration to Berlin and the old West Germany – as well as unemployment, which stands at 10.2% in Frankfurt (Oder) today – has thinned out regional human capital, according to research from the Free University of Berlin.  

Bouncing back 

Undeterred, Frankfurt (Oder)’s pitch as a logistics and research destination at the centre of Europe is strengthened by its highly specialised technology facilities, a new university, and crossborder co-operation efforts. It was recognised in fDi Magazine’s 2016/17 German Cities of the Future ranking for cost effectiveness, largely due to its significantly lower worker and rent costs than Berlin, as well as the highest subsidy levels in Germany – up to 40% grants for investments. In the manufacturing sector, eastern German labour costs are on average 33.4% cheaper than in western Germany.

Its twin-cities initiative with next-door Słubice is one of many steps it has taken to present an attractive investment destination to foreign businesses. This means a broader and more affordable workforce equipped with multiple languages. The Frankfurt (Oder)-Słubice Co-operation Centre, located in Frankfurt (Oder), calls the crossborder city “a trailblazer of the European ideal.” 

In addition to the logistical and linguistic advantages of being a border city, the position offers both Frankfurt (Oder) and Słubice mutually beneficial infrastructure. The cities share a joint district heating system and waste water treatment plant in Słubice that serves both towns, saving money on both sides. Słubice residents gain from their relative proximity to Berlin – trains to Berlin depart Frankfurt (Oder) every 30 minutes, and the Polish town is a mere 15-minute drive from Frankfurt (Oder)’s city centre. More than 1000 people use the crossborder bus service, which links the two cities’ town centres as well as their universities, on a daily basis.  

About 200 Polish companies operate in Frankfurt (Oder), the largest being cargo terminal operator PCC Intermodal, which has engaged in a public-private investment of more than €10m into the terminal in the city’s Freight Village. With four tracks, the terminal helps transport 60,000 containers of cargo yearly from the region to Europe’s main ports.

Bernd Meewes, managing director of PCC Intermodal, says: “We’ve been in Frankfurt (Oder) for more than 10 years. The city is at the centre of all our operations and the administration supports us very well in marketing. We are quite satisfied to be here; it’s really a great place for our network, so we took over this terminal and we’ll be here for the next 25 years.” 

Tech development 

During the Cold War era, the former East German republic had a thriving semiconductor industry which largely dissipated after the Berlin Wall came down and investors headed westward. Recent efforts, however, have seen the formation of a small cluster of highly specialised enterprises and business incubators throughout the former East Germany, which are fuelling start-ups and gaining attention from investors. 

Central to the life of Frankfurt (Oder)’s scientific community is the Leibniz Institute for Innovations for High Performance Microelectronics, or IHP, a leader in high-frequency electronics. With more than 300 employees from 23 countries, it is a buzzing centre of R&D for systems design, circuit design, technology and materials. “The focus of research at the institute lies in economically relevant issues, resulting in applications for telecommunications, medical engineering, security, aerospace, and automation technologies,” says IHP scientific director Bernd Tillack. 

IHP has numerous partnerships with international science and technology firms, including Cisco, Alcatel, Philips and IBM Research. The institute was recently won an award for its apprenticeships for young people, and runs collaborations with local kindergartens in Frankfurt (Oder) to foster youth enthusiasm for science.   

One budding company with a vested connection to IHP is Silicon Radar, a Frankfurt (Oder) start-up developing radar sensors for applications in industry, robotics, drones and more. The company’s founder was a researcher at IHP, and now uses the knowledge base to fuel its work. Anja Bolicke, CEO at Silicon Radar, says: “We have co-operation contracts in place to use IHP’s equipment. We need the know-how of the staff there, and it is one of our most important customers and our most important supplier.” 

Frankfurt (Oder)’s largest foreign investor is Chinese energy giant Chint Group, which purchased the assets of a former German photovoltaics company for €6m after it went into insolvency in 2013. The company now trades under the name of Chint Group’s subsidiary, Astronergy Solarmodule, and produces solar modules for the European market, boasting an annual turnover of €130m. Astronergy has 3000 employees in seven solar module production facilities worldwide, and its European base in Frankfurt (Oder) employs 250 people. 

“The lord mayor, the city administration and the state of Brandenburg have been very supportive, especially during the M&A process,” says Dietmar Gutzmer, director of business administration at Astronergy Solarmodule. “Financially there are many opportunities for subsidies, and [regional investment promotion agency] Investor Centre Ostbrandenburg has been very helpful as well.” 

Home for everyone 

A particularly interesting spot for growing companies is the publicly owned TeGeCe technology park, which houses more than 50 national and international companies and more than 3000 employees. TeGeCe enables SMEs to start local production by leasing facilities at affordable costs, from 20-square-metre rental offices to multi-level factory buildings. The park has 80,000 square metres of space for commercial and industrial use, and offers facility refurbishing specific to companies’ needs.   

TeGeCe’s tenants cover numerous sectors, including electrical component manufacturing from the likes of Japanese company Yamaichi and Germany’s ChipCard Solutions. Its companies also work in civil engineering, building services, health services, BPO, online trade start-ups, warehouses (such as local start-up AsGoodAsNew Electronics) and Belgian plastic production company New Product Packlab (NPP). 

NPP began operations in 2014 and by 2015 had achieved a turnover of  €5m, with sales facilities in Belgium and production in Frankfurt (Oder). “The investment climate in this region is very positive – a lot of effort has been made to attract FDI,” says NPP’s finance director, Dirk van Donink. “The investor centre has helped us tremendously. We try to be a world player and we feel that Frankfurt (Oder) is at the centre of Europe.” NPP exports 90% of its production internationally. 

Academic promise 

One of Frankfurt (Oder)’s gems is the European University of Viadrina, opened in 1991. It stands on the site of the former Brandenburg University Frankfurt, which was originally founded in 1506 but has been closed for centuries. Focused on business, law and humanities, the university embodies Frankfurt (Oder)’s international ideals with a student body of 6500 representing 95 countries. It has a robust research and foreign exchange programme through partnerships with 263 universities worldwide and offers courses in multiple languages. It also works in collaboration with neighbouring Słubice’s Collegium Polonicum, which specialises in German-Polish studies and international law. Viadrina was recently ranked among Germany’s top six universities for business administration. The university’s Centre for Entrepreneurship and Research provides support for start-up development and aspiring entrepreneurs, helping would-be entrepreneurs stay in the city beyond graduation.    

A scenic riverside dotted by the architectural gems that survived the Second World War’s bombings, Frankfurt (Oder) provides a quiet and idyllic setting for families and students. “You have a small town welcome and a very active cultural scene,” says Frankfurt (Oder) mayor Martin Wilke. “You have the state orchestra, singing academies and natural surroundings. And on the other side, you have Berlin for shopping, nightlife and more.” Indeed, the city is home to the Brandenburg State Symphony Orchestra Frankfurt (Oder), which has performed all over the world since its founding in the mid-19th century. A point of pride for the city’s residents, the orchestra sponsors educational projects and youth arts initiatives. 

“Here you have a smaller city; it’s less crowded and more relaxed,” adds Mr Wilke. Capitalising on crossborder co-operation and attractive incentives for companies and entrepreneurs, Frankfurt (Oder) is bolstering its reputation as an open, international city with room to grow. 

This article is sourced from fDi Magazine
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