Baden-Baden is a small German city with a rich history nestled on the north-western border of the Black Forest, named after the hot springs and baths that have attracted visitors for generations.
“In the 19th century Baden-Baden was the capital of the summer, and people from all over Europe came to the city to enjoy the thermal water and to gamble in the casino. Important leaders and notable composers and poets frequented the city, such as Johannes Brahms, Hector Berlioz, Fyodor Dostoyevsky and Ivan Turgenev,” says Margret Mergen, the mayor of the Baden-Baden.
The small city’s long history of tourist attraction comes partly as a result of its Festspielhaus (or festival hall), which is both the largest opera house in Germany and the second biggest in Europe. Even today Baden-Baden punches above its weight in terms of tourism, boasting more than 1 million overnight stays in 2018, an impressive number considering its population of just 55,000 inhabitants.
Despite its strong tourism industry, Baden-Baden has had less success in recent years with foreign investment: greenfield investment monitor fDi Markets has recorded only 16 greenfield FDI projects into the city since 2003, the last of which was made by India-based TVS Supply Chain Solutions in April 2016.
While Baden-Baden has underperformed on this score, the larger city of Karlsruhe – just 10 kilometres from Baden-Baden – has attracted 70 greenfield FDI projects since 2003, amounting to $656.7m of inbound greenfield investment, according to fDi Markets. Ms Mergen claims that Karlsruhe (a city she has also served as mayor) and the wider Karlsruhe Technology Region (TRK) are attractive to foreign investors because of their “IT competence, which in part originates from the university, the Karlsruhe Institute of Technology [KIT]".
KIT was officially established in 2009 following the merger of the University of Karlsruhe and Karlsruhe Research Centre, and the 12 greenfield FDI projects attracted in the software and IT services sector in Karlsruhe since 2008, and the presence of R&D operations of Germany-based software giant SAP in the city, indicate a strong level of IT competence.
Within the TRK, which spans an area of 5900 square kilometres, there is a strong collaborative atmosphere. Indeed, Ms Mergen found mayors in cities across the region willing to work together to improve digital infrastructure. Following her proposal to set up Wi-Fi in the centre of Baden-Baden, “the mayors of all the cities around us joined, and now we have a huge network with the same Wi-Fi system”, she saysn.
Established in 2013, the TRK is a group of businesses, chambers of commerce and industry, scientific and public authorities spanning across the Germany-France border that works towards promoting innovation around the themes of mobility, energy and IT.
“Mobility is a hot topic in our region as many people take weekend trips to destinations such as the Black Forest, Switzerland and Lake Konstanz. We started almost 15 years ago to improve public mobility towards an ecological, intelligent and trained system,” says Mrs Mergen.
Such a collaborative approach to tackling important challenges stands out in a world where nationalist rhetoric is on the rise. Time will tell if Baden-Baden and Karlsruhe's joint enterprise attracts the attention of foreign investors.