Ask the average person what image Cologne conjures up for them, and they’ll usually mention the cathedral, the river, perfume, the city's carnival or its Christmas market. This conjures up a varied image, and it is this variety that makes the city so attractive to visitors. When it comes to business and investment, it also offers a surprisingly diverse range of opportunities, from media and software to services, trade, manufacturing, science, aviation and logistics.

The city’s location places it at the heart of the EU. “We’re situated in North Rhine-Westphalia [NRW], the largest federal state in Germany with the highest population density,” says Karl-Heinz Merfeld, director of the City of Cologne's office of economic development. “We’re the fourth largest city in the country and the largest in NRW. About 1 million people live in our 405 square kilometres, and the Cologne economic region is the third largest industrial region nationwide. Within a 100-kilometre radius of the city live about 17 million people. And current forecasts predict this population will continue to rise to 2025.”

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Sectors and investors

“Cologne is a base for many sectors, which is both an advantage and a disadvantage,” says Mr Merfeld. “It’s a disadvantage because we’re not famous for just one area of business – such as Frankfurt with finance. But it’s an advantage because if one sector suffers, there are plenty of others that still provide opportunities, so we fared OK during the financial crisis.”

About 10,000 foreign companies operating in industries as diverse as IT and hi-tech, logistics, chemicals, pharmaceuticals and biotechnology, radio and TV, trade fairs and science and research have set up base in the city.

Major international names present in Cologne include Ford-Werke, AXA Konzern, AMB Generali Gruppe, UPS, Ineos Köln, Oerlikon Leybold Vacuum, Strabag, Ford Bank, Shell & DEA Oil and RTL Television.

This puts Cologne in an enviable position. “Compared with other German cities and regions, Cologne is growing rapidly,” says Jürgen Roters, the city's mayor. Hand in hand with this rapid expansion, though, comes a host of challenges. “We are increasingly facing the challenges of balancing metropolitan growth and meeting people’s expectations for services, while ensuring the liveability and economic competitiveness of the city. Further complexity is added by the challenges of growth-related issues such as stress on the infrastructure and the shortage of resources as well as sustainability in the context of climate change and urban inequity and segregation,” says Mr Roters.

But the city is working hard to find and implement solutions. “We are developing strategies that are built around an inclusive and holistic vision,” says Mr Roters. “We are focusing on integrated planning, transparent governance and rigorous monitoring of the implementation of our strategies and measures. Our holistic view of a well-functioning whole as well as the smart use of finance and other resources combined with a locally rooted, democratised culture of sustainability and the participation of all stakeholders will help us build a solid foundation for a successful urban development.”

Building connections

While Cologne has much going for it, one common grumble among its citizens is that there is too much traffic. As one worker in the city says: “Public transport works. But if you want to take your car you notice that the whole city is blocked.” That said, visitors from many other cities are often pleasantly surprised by the ease of movement throughout Cologne and the wider area.

“We’re well served by road, rail, air and water, which helps connect us to the rest of Europe,” says Ulf C Reichardt, general executive manager of the Cologne Chamber of Commerce and Industry. “Local public transport is good. Rail services to other cities are great: it takes less than two hours by train to travel to Brussels and just over three hours to Paris. Also, the road network puts other major cities within easy reach. Access to the rest of the world via the Cologne Bonn, Düsseldorf and Frankfurt airports, which are all less than an hour away, make this a very well connected city.”

With its favourable location in mind, the city’s authorities have been behind a number of initiatives to encourage foreign investment. “Investors from outside the EU can often have problems with the length of time it takes to get a visa, so we started our 'Cologne China Offensive' programme in 2004 to address this,” says Michael Josipovic, deputy director and head of the international development department at Cologne’s office of economic development. “We’ve held roundtables with the immigration office, labour office and chamber of commerce and have shortened the time it takes to carry out all the local procedures to obtain a visa.”

Cologne is also working to improve its hard and soft location factors, as Ute Berg, the deputy mayor of Cologne for economic development and real property, explains. “Supply-side policy is responsible for our city’s biggest assets, which itself leads to foreign direct investment [coming to] Cologne. Our infrastructure, for example, has not only to be maintained but also strengthened and expanded. We also have to consider sustainability and implement and monitor strategies that enable us to use our assets more effectively and wisely. So we have developed and we are applying coherent and comprehensive action plans," she says.

“In addition, we have a number of schemes aimed at attracting investment from certain sectors and countries which we have identified as being a perfect match for Cologne’s economy and which can play a vital role in the future economic development of our city. The growth sectors that we have identified and are targeting using a range of measures include the media and ICT sectors. We do thorough analysis of target countries and regions, and focus on attracting investment from them. We have already attracted about 200 companies from China.”

The fun factor

According to Cologne’s business leaders, it is not difficult to attract the people to the city. “It’s a cool city,” says Mr Reichardt. “I’ve been here for two years, and I love it. It has a good economy and it’s vibrant with plenty of things going on. Students come here from all over the world and stay here because they love the city.”

Cologne has many cultural, sporting and historical attractions, including the Philharmonic Hall, the Lanxess arena, the Unesco World Heritage-listed cathedral and many museums and art galleries. Its world-famous carnival attracts hundreds of thousands of visitors to the city every year. “The carnival is part of the social life of the city,” says Marcel de Rycker, chief executive officer at car manufacturer Peugeot Deutschland. “I met people at the carnival when I first arrived in Cologne who are still very good friends, so it’s a perfect networking opportunity.”

“It’s a lot of fun,” agrees Mr Reichardt. “But it’s important economically as well. According to 2010 research from Boston Consulting, the carnival brings €450m to the city from spend on taxis, restaurants and hotels.”

He adds: "In short, what Cologne stands for can be reduced to a double ‘e’: a strong economy and strong emotions.”