Leipzig: Why This German Region Might Be The Perfect Business Location For You

Obviously, Berlin is a startup-magnet as the German capital offers many advantages and opportunities. However, startups & scaleups might be better off choosing the highly industry-driven ecosystem in the Leipzig region as their point of entry to the German market.

“Leipzig benefits from being so closely-connected to Berlin. The entrepreneurial ecosystem here is very much tech-driven and mainly designed by engineers, computer scientists, and creatives with a very curious and inviting mind. People here are committed to innovation – and owing to the city’s size, its network is strongly interconnected. Developing business here is often easier than in bigger cities with an overloaded run of requests,” explains Helen Stöhr, Manager of International Markets at Invest Region Leipzig.

Funding, Recruiting, Scaling

Leipzig offers a lively business environment with an estimated 200 to 250 startups currently operating in the city. Opportunities range from

• Various public and private funding options,
• About 20 coworking spaces and incubators to innovation spaces of around 50,000m²,
• Accelerators such as the “SpinLab” or initiatives such as the “Smart Infrastructure Hub” one of 10 German digital hubs nominated by the Federal Ministry for Economic Affairs and Energy
• Dense industry networks such as the Mechanical Engineering Association Eastern Germany (VDMA Ost), the Automotive Cluster Eastern Germany (ACOD), and the Network for Energy & Environmental Tech (NEU e.V.)

Funding

Whether you are in the early stages of business founding or more mature already – you’ll find the right funding in Leipzig. There are public investment options through the State Development of Saxony including public investment grants of up to 30% for small companies. Leipzig also offers private funding options of the TGFS (Technologiegründerfonds Sachsen) and Eastern Germany’s first VC fund, the “Smart Infrastructure Venture”. Apart from this, Leipzig’s City Council offers several cash incentives for medium-sized companies as well.

Recruiting

Leipzig is Germany’s fastest-growing city with a predominantly young and educated population – nearly a third of all residents hold university degrees. Currently, a potential of 155,000 students are enrolled in eight institutions of higher education including the oldest German management school HHL Leipzig Graduate School of Management that spawned 80% of all German unicorns. According to the Economist, it’s a top-ranked MBA school worldwide. Moreover, the UK’s Lancaster University has recently established a campus in the city. This all leads to a constant supply of readily-available and affordable IT talent.

Scaling Business

Germany’s economic growth rate is 1.75% – in Leipzig however, it’s a whopping 3.40%! The thriving economy and the less costly job market make it a perfect location to scale-up: living costs are moderate, land and offices are still available at affordable prices – offices cost between 5 and 9,40EUR/m² in the private sector, on average – this makes rent levels much lower than in Hamburg or Berlin.

Emerging Growth Engines: Tech, Mobility & Logistics

The city has developed an impressive reputation for all things tech, mobility & logistics. Industry giants such as Siemens, BMW, Porsche, DHL, DB Schenker, and many more prove that this region is a stepping stone to go global. Overall, the Leipzig region is a top location for companies and the main appeal are transport links, logistics, and infrastructure.

Tech & Manufacturing

Since the first industrial revolution, Leipzig has been world-famous for its mechanical engineering and manufacturing. Today, the tech & manufacturing sector in the region is thriving. Siemens, for example, produces its turbocompressors in Leipzig for use in the energy industry. In the supplier sector, Georg Fischer and others have been able to significantly expand their production in the last few years.

Mobility

Leipzig stands for new technologies such as lightweight construction, innovative drives as well as networked and state-of-the-art production. For example, Leipzig currently is the largest production center for electric and hybrid vehicles in Eastern Germany. Companies are heavily investing in the location. Porsche, for example, opened an assembly line that produces two-thirds of its output and BMW invested roughly 1EUR billion to set up a new plant containing its game-changing headquarters.

Logistics

As one of the main logistics players, DHL invested 510EUR million in its European hub in Leipzig. Other logistics & warehousing players in the region include Kühne & Nagel as well as DB Schenker, making the Leipzig/Halle region one of the three best logistics areas in Germany. Pilot projects are a very popular tool to test emerging technologies in this sector. For example, the eJIT project pursues the goal of developing a pioneering role in the electrification of just-in-time logistics traffic. The project brings to the road the latest innovations, technologies, and systems for trucks and further develops them for practical use.

Soft Landing: Effective Market Expansion & Scalable Growth

Invest Region Leipzig supports startups, scaleups & companies with setting-up business in this German region. Helen Stöhr, Manager of International Markets, is sure that “both established and young, technology and growth-driven companies will find that there are extraordinary conditions in Leipzig”.

Invest Region Leipzig developed the Soft Landing package – designed to find out if the Leipzig region is the right place to expand without any risk or costly investments. The package offers custom support on all topics, including:

• Funding
• Recruitment
• Scaling
• Building a business network

“Our strong relationships with associations, industry members, administrators, and investors will connect companies with all the interesting players,” concludes Stöhr.

Leipzig is a growing city with a broad economic base that welcomes innovation. Its lively corporate and startup scene as well as the vibrant higher education system foster highly-skilled talent while the city also offers optimal infrastructure, an outstanding R&D landscape, available funding, international networks, and high quality of life.

Considering Leipzig when expanding to Germany is a great opportunity for startups & scale-ups and with the right partners such as Invest Region Leipzig, settling-in to this fast-growing region will become even easier.

 

__________

Sharing is caring!