Focusing on automotives and biotech might sound like an all-too-common approach to economic development, as hundreds of locations around the world chase investments into these two sectors. Yet, by supporting small and medium-sized enterprises (SMEs) and establishing itself as the logistics hub, Leipzig, a city located in the eastern German state of Saxony, seems to have discovered a winning formula in the race for bio and auto dollars.
"We are looking to attract SMEs that want to take part in the development of new materials and processes for electric cars, and we can help them find industrial space and make connections with the original equipment manufacturers," says Dr Michael Schimansky, the head of Leipzig's economic development office.
"And in the healthcare and biotech sector, we have established a cluster at [our] BioCity, on the grounds of the old trade fair site, and we are attracting small companies in areas such as stem cell applications and biodiversity research," he adds.
BioCity is located near faculty buildings of the University of Leipzig, one of the oldest universities in Germany, and offers SMEs specialised lab space. It is clustered with the Fraunhofer Institute for Cell Therapy and Immunology (Fraunhofer IZI) and the Max Planck Institute.
Leading US biotech company ApoCell recently signed a deal to set up its core European business, which involves the detection and analysis of biomarkers, at BioCity. It will also implement extensive R&D projects.
BioCity has recently expanded through the opening of a new building called the BioCube. One of the tenants is publicly listed company Vita 34, which specialises in freezing and storing the blood samples of a baby's umbilical cord at birth – potentially to be used later in life in areas such as cancer therapy.
Dr Andre Gerth, CEO of Vita 34, says that moving into BioCity back in 2001 presented his company with a valuable opportunity to develop. "We were given access to space with specialised floors and installations, and the city of Leipzig helped us to make connections to make use of growth opportunities," he says. "Being close to the university and research institutes has also been helpful."
The development of BioCity is handled by BioNet Leipzig. "Fraunhofer IZI has a strong set of patents, and looks for partners in processes such as cancer therapy," says Dr Gerald Boehm, managing director at BioNet Leipzig. "A small company with perhaps only three or four staff can partner with Fraunhofer, and use BioCity facilities to develop processes to the clinical trial stage and prototype production," he adds.
One for the road
Leipzig’s strong SME supply chain is backed by a well-developed infrastructure, which proves particularly beneficial for its automotive industry. The city’s strong road, rail and air transport links – which helped persuade both Porsche and BMW to site factories on its outskirts – have already attracted logistics companies such as DHL Express and the Lufthansa/DHL joint venture Aerologic, which operates a fleet of Boeing 777 freighters out of Leipzig/Halle Airport.
Porsche builds the Cayenne and other models at its plant close to the airport, and not far to the east BMW makes not only models such as the X1, but also the newly launched i3 electric car.
Building on this successes, the city wants to expand as a major logistics centre, encouraging small companies to cluster in the Schkeuditz area around the airport. But even before this project materialises, thanks to the city’s bet on getting fundamentals right, it seems that when it comes to biotech and automotives, increasingly, all roads lead to Leipzig.