12. May 2016

Bavaria as industry location: An international comparison - Market

The presence of Bavaria’s strong industries makes the state a top industry location. About one quarter of the total gross value added is generated by the manufacturing sector, giving Bavaria the fourth-highest share of industry worldwide. This success is thanks to the performance and efficiency of Bavarian companies as well as to the quality of Bavaria as an industry location.

A study conducted by IW Consult GmbH on behalf of The Bavarian Industry Association (vbw) compared what 46 locations have to offer to industrial businesses. Bavaria came in second place overall. The USA reached seventh place. The study identified six categories that inform the investment decisions of industrial businesses: state, infrastructure, knowledge, resources, costs and market.

Market: Bavaria in second place, USA also in top ten

The “market” category takes into account the following factors: customer focus, market size, range of the value chain, function as an industry hub and economic openness. Switzerland takes first place in this category by a good margin.

Bavaria comes in an excellent second place in this subcategory thanks to the high integration of its value chain and its well-developed functionality as an industry hub. It is followed closely in third and fourth place by Germany and Malaysia, the only emerging economy in the top ten owing to its high customer focus and the openness of its economy. Japan rounds off the top five.

The rest of the top ten comprises Germany’s neighbours Belgium, Netherlands and Austria as well as Sweden who all excel in their economic openness. The United States is ranked in ninth place due to the size of its large domestic market and its excellent customer orientation – ahead of competitors such as Canada (14th), China (22nd) and South Korea (23rd).

This article concludes our series about Bavaria as an industry location.

To read the complete study, please follow the link (German only)


Volker Leinweber

Volkswirtschaftliche Grundsatzfragen

Volker Leinweber