Germany commands a large amount of attention in Europe, with its chancellor, Angela Merkel, hugely influential on most matters that concern the EU. The country is also a big player in the European FDI arena. In 2014, Germany accounted for 22.64% of all FDI in western Europe, second only to UK’s 27.37% share. fDi Magazine has taken a closer look at the country and investigated which cities and regions come out top in the FDI charts.
Frankfurt ranked first for larger German cities with populations of more than 500,000 people, combining capital expenditure and project numbers per 100,000 people between 2010 and 2014. Across the three sectors highlighted for this study – namely software and IT, business services and industrial machinery – Frankfurt ranks in the top five of all German cities, in third, fourth and fifth places, respectively. Software and IT FDI accounts for 25.5% of all Frankfurt's inward investments between 2010 and 2014, and the city serves as the financial powerhouse of the country, with 18.2% of its inward FDI in the financial services sector.
Hamburg state ranked first of all regions in Germany, both in terms of projects and capital expenditure. In total, 27% of Hamburg state’s inward FDI was in the business services sector, followed closely by 25% in the software and IT sector. Major investors in the software and IT sector included US-based social media giant Facebook, which opened an office in the state in 2010, and followed this with an expansion in 2014, choosing the site as its German headquarters.
The state of Bavaria also ranked highly in the sectors highlighted in the study, ranking first in software and IT, third in business services and third in industrial machinery, while Baden-Wurttemberg also performed well, ranking second in software and IT, first in business services and first in industrial machinery.