International Sep 02, 2020

Bavaria is a top industrial location: 2nd place in a worldwide comparison

According to the latest study by the economic research institute IW Cologne, Bavaria is the second best industrial location internationally. This means that Bavaria continues to be one of the top industrial locations in the world, with attractive location conditions and an excellent infrastructure, providing a powerful ecosystem for industrial companies. First place goes to the USA, third place goes to Switzerland and fifth place goes to Germany as a whole.

The analysis is based on data from the year 2018. The effects of the current crisis, caused by the corona pandemic, therefore cannot be reflected in this ranking yet. The IW compared 45 industrial locations and examined them using a total of 61 indicators in six subject areas. In five out of these six sub-rankings, Bavaria achieved a place among the ten best countries as an industrial location:


  • State
  • Infrastructure
  • Knowledge
  • Resources
  • Market

The strength of industry in Bavaria is particularly evident from the fact that the industry’s share in the state’s economic output has actually increased since 2005. This is a significant contrast to most of the traditional industrialised countries, where the importance of industry has declined rather than increased in recent decades.

The result shows that Bavaria is in a good starting position in the global competition for business locations. This competition will increase. The experience gained from the corona pandemic means that companies will rethink and reorganise their value chains. The question of location is being asked again.
-  Bertram Brossardt, CEO of the Bavarian Industry Association (vbw)

Furthermore, Bavaria is characterised by its good state framework with an efficient government and economic freedom. The very good environment for Bavarian industry in terms of innovation is another of the state’s strengths. The cooperation between research and industry to develop innovative products works very well for industrial companies in Munich and Bavaria. The Bavarian infrastructure already mentioned also makes a positive contribution to the result. Bavaria has efficient logistics systems and an above-average IT infrastructure. Bavaria, like many other industrialised countries, is only towards the bottom of the ranking in terms of costs. According to the study, this is because these countries have relatively high labour, energy and tax costs.

Bavaria: a strong partner to industry

Bavaria is one of the countries with the highest industrial shares worldwide. More than a quarter of Bavaria’s total gross value added is generated in industry, making this the fourth highest industrial density in the comparison of countries. The study once again confirms Bavaria’s excellent quality as an industrial location. The study can be downloaded in German here.