The transition away from fossil fuels presents challenges, as well as opportunities, worldwide. As Saxony-Anhalt phases out coal-generated electricity by 2038, the central German state is aiming to build on its industrial heritage and become a hub for environmental technologies. 

Thomas Einsfelder, managing director of Invest and Marketing Corporation Saxony-Anhalt, the state’s economic development agency, talks to fDi about efforts being made to align the state with the needs of business and a greener future.

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Q: For investors not familiar with Saxony-Anhalt, what are the main advantages of doing business and investing into the state?

A: For more than 150 years, Saxony-Anhalt has been a good location for engineering. Many strong sectors have been established, including mechanical and automotive engineering, and chemicals. Our highly motivated, skilled workers help to guarantee this success. 

The future is made at 29 business-oriented research institutes: engineers and scientists join forces in clusters to tackle varying challenges and work together on problems that will underpin the livelihoods of the next generations. This is also a fertile ground for young entrepreneurs to start their own businesses. 

Their ideas lead to new patents and products that are met with huge demand on the world market. A state-of-the-art transport and logistics infrastructure enables the fast turnaround of goods and the state’s central location in Europe provides optimum access to eastern Europe.

Q: The pandemic led global foreign investment to decline by 35% in 2020. Has this caused a pivot in Saxony-Anhalt’s economic development strategy?

A: Coronavirus is not the cause, but the trigger of a change of strategy. There are several challenges that the state and companies need new answers for, including climate change and the energy transition, new forms of mobility and work life, digitalisation, globalisation, and its new countermovement of reshoring. 

In order to provide answers to these, business development must realign itself with focus, continuity and innovation. Our strategy has changed to one in which the services of business development are continuously developed together with companies to face the challenges. Systematic, partnership-based cooperation is key to a successful, sustainable increase in the quality of business development as a public service.

Q: Saxony-Anhalt markets itself as a location for innovation, particularly relating to the energy transition, but what differentiates it from other European states in this regard?

A: The phase-out of coal for energy generation will impact Saxony-Anhalt, particularly in the south of the state. But good availability of large industrial areas and workers, and opportunities for co-operation with research institutions, paired with extensive funding, come together to form an attractive package for investors.

Saxony-Anhalt’s unique offering is its long-term experience as a location for companies in the chemical, hydrogen, renewable energy and bioeconomy sectors. The region has great potential for sustainable value creation and resource-saving products, many years of experience with renewable energies, and the close interlinking of business and science.

Q: What makes Saxony-Anhalt a prime location for hydrogen production and storage?

A: Central Germany and Saxony-Anhalt in particular have the best prerequisites to play a central role in the transition to the hydrogen economy. Thanks to its long industrial history, the region is home to a great wealth of knowledge in this area. Many companies — especially in the central German chemical triangle — have a long history of handling hydrogen, and in a nationwide comparison there is no other region in which the hydrogen infrastructure is already so well developed. 

In association with the Investment and Marketing Corporation Saxony-Anhalt. Writing and editing were carried out independently by fDi Intelligence.

This article first appeared in the October/November print edition of fDi Intelligence. View a digital edition of the magazine here.