Electronics&electrical engineering Feb 19, 2018

Economic driving force par excellence – industry in Bavaria

The Bavarian economy is booming. This is not least thanks to its strong industry that makes up for the majority of the Bavarian economic output. The industry drivers are the many successful companies from all the application industries that are the heart of the economy.

The Bavarian industry plays a key role for the state’s whole economy thanks to its business ties with other sectors across the entire valued added chain. This can be seen clearly in the figures: Almost 21 percent of all Bavarian workers are employed in the manufacturing industry, which makes the sector the third largest in Bavaria after the service and trade/transport/hospitality sectors. When compared to the figures for Germany as a whole, it becomes obvious how important the industry is for the state. Approximately 17 percent of all German workers are employed in industry, making Bavaria far more industrial than other German locations.

The difference becomes just as clear when you look at industry’s share of the value added. More than 27 percent of the Bavarian value added is achieved in industry, the average for Germany as a whole is approximately 23 percent. The result: Bavaria is one of the most important German industrial centres and in a global comparison of the industrial location quality, carried out by the Bavarian Industry Association, Bavaria is also in second place internationally out of 45 countries.

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Excellent basic conditions for cross-industry innovation

It is of course the companies who Bavaria has to thank for this power. Global corporations, SME world market leaders, a broad section of SMEs and last but not least a lively start-up scene all do their bit.

The different branches within industry can also be differentiated and clearly show where Bavaria’s strengths lie. The large, dominating sectors are quite clearly the automotive industry, mechanical engineering and the electrical industry. But many other established sectors are also strengthening its reputation as an industrial location, for example aerospace, chemicals and metal production. The mixture of high-tech and classic industry in particular produces a combination that gives the state a leading edge. And not just in terms of classic business fields but especially due to innovative, cross-industry cooperation: the potential for cross-industry innovation is particularly huge thanks to a variety of collaborations between different branches and stakeholders

According to a study by vbw, this is not a coincidence as the basic conditions that the state offers are excellent. The economic freedom, efficient government, innovation environment, talented employees and many associations and clusters contribute to a strong industry.

The trend is continuing

The current figures give us every reason to be confident. There is no evidence of the general trend towards de-industrialisation in Bavaria – quite the opposite: Digitalisation in particular and the associated topic of Industry 4.0 are drivers of innovation carrying the Bavarian industry. These are bright prospects for the Bavarian economy as the manufacturing sector’s share of the total gross value added will continue to increase.