Places To Do Business In Europe - Where To Invest In EuropeAfter living for loads of years in New Zealand and South Africa, there is no doubt for me that I am now more fluent in English than in German. When I do not deliberately speak English, German or Spanish, words come out of my mouths automatically in English. Every now and then I am aware that I know the word for something in British, American, South African and New Zealand English but need a few seconds to recall the German word. Who cares? I cannot help it.
Thus it may not surprise you to learn that I almost always do my reading in English, not in German. First, because doing my reading in English comes across a bunch more naturally than doing it in the language that we may call my mother tongue. Second, at least the books and newspapers as well as magazines that I am usually inclined to read do offer a little more fresh air intellectually than the German alternatives. “The Economist” and “The Spectator” are more fun to read than “Manager Magazin” and “Wirtschaftswoche”.
However, every now and then my humble self cannot resist scanning German newspapers and magazines. Even though I cannot claim to have difficulties containing myself when reading them, at least sometimes they offer some useful information. A while ago, “Manager Magazin” published a ranking about the most attractive regions in Europe for investing and doing business. “Wirtschaftswoche” did a smiliar ranking about German cities and doing business there. As I have not graced that part of the world with my presence for about twelve years, in the course of time I have developed some distance to it. That distance may turn out to be some healthy distance when chatting a little about the findings of these two rankings. At least yours truly hopes so.
According to the findings of the ranking done by “Manager Magazin”, even the top regions in Germany for doing business do not deserve to be called competitive when compared to more attractive regions in Europe for investment. There are two sorts of regions in Europe that offer – at least by European standards – top notch conditions for doing business. First, countries that have recently joined the European Union and are relatively advanced with their economic transformation – e.g. Estonia, Poland, Hungary. Second, countries of the “Old Europe” like Ireland and Austria. In particular in the sector of simple services no region in Europe can compete with Estonia. In the sector of high technology Ireland turns out to be head and shoulders above the crowd.
The ranking draws the conclusion that the corporate taxation in Estonia helps the country outperform its competitors. The corporate tax rate in Estonia is zero when profits are reinvested there. That sort of corporate taxation appears to be beneficial in particular when you are in the process of setting up a business. Businesses being set up and operating in Estonia also benefit from comparatively low labour costs there. In terms of offering a competitive business environment Estonia and Ireland have done in Europe what New Zealand did a little earlier.
On the other hand, even the top notch regions in Germany for doing business cannot compete with countries like Estonia because of a specifically German combination of high labour costs and high taxation as well as short working hours. German politicians in all shapes and sizes were already rambling about revamping the German economy when I was a student at university. That was about twenty years ago. Nothing worth mentioning has happened then since.
Look at the calibre of folks in Germany that gets involved in politics and you understand why. It is primarily the sort of folks with the flair of a post office clerk. One of the things in the United States I am still favourably inclined to is the regular exchange of people and experience among government, business and academia. There is no doubt for me that Germany would benefit from that sort of exchange.
Doing Business In German Cities
Even though there is virtually no US – style exchange among government, business and academia in Germany, there are a few German business hubs worth chatting about. The German business magazine “Wirtschaftswoche” recently did a ranking about these business hubs.
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According to the findings of that ranking, no business hub in Germany prospers as much as Munich. I cannot claim to be surprised. After the second world war Bavaria and its capital Munich suffered from a lack of heavy industry. In the course of time, that lack was balanced out by the gradual development of services and biotechnology as well as high tech industries. As a result, Munich and its surrounding region can face economic challenges a bunch more confidently than other regions in my valued country of birth. By the way, Munich enjoys a reputation for having some sort of high society glamour and the social hanky panky that this sort of thing entails.
Second placed in the ranking done by “Wirtschaftswoche” is Frankfurt. Frankfurt´s nickname is Mainhattan because the city at the river Main displays a few similarities to its counterpart Manhattan. Frankfurt radiates a cool, reserved, modern flair with its skyline dominated by high rise buildings with offices for national and international banks. It lacks the upper class ease of Hamburg and the elegance of Dusseldorf. But it has managed to turn into Germany´s most dynamic business centre. Nowhere else in Germany has prosperity increased as fast and as much as in Frankfurt.
Third placed in that ranking is Stuttgart in southwest Germany. There are a few similarities between Stuttgart and Munich. Like Munich, Stuttgart and its surrounding region suffered from a lack of traditional industries. Similar to Munich, it started from scratch by attracting services and modern industries.
In my humble opinion, it is no coincidence that the three most dynamic business centres in Germany – Munich, Frankfurt and Stuttgart – are all located in the southern half of the country. Even though the state governments of Bavaria and Baden Wurttemberg in particular – Stuttgart is the capital of Baden Wurttemberg – in no way deserve to be characterised as market radicals, at least they have practiced a bunch more economic common sense than the rest of my valued country of birth. The ranking reflects that the movers and shakers in Munich, Frankfurt and Stuttgart are less brain damaged than in other parts of the country.
Does all this mean that I fancy the idea of returning to Europe or Germany? No, not really. You should never say never. But at the moment, it does not sound like an appealing option. To my liking, most of Europe and in particular Germany are a bunch too regulated in almost every respect. There may be exceptions that offer niches. But the old world as a whole does not have plenty on offer for individuals who value personal freedom.
Moreover, claiming that the economic fundamentals in Europe look brighter than in the United States appears a little far fetched. Debt – at government , corporate and consumer levels – may look bad in Gringolandia. But at least debt at government level in Europe is about twice as bad.
Do you have confidence in a single currency for a whole load of countries even though each country does its own economic policy? In the course of time – during my so far twelve years in the United States, South Africa, New Zealand and Mexico – I have turned into something like a Eurosceptic – similar to the British Tories, just without their nationalistic mambo jumbo. However, depending on where you come from things may look a little different from your angle.
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By contrast, Kenya got rid of Daniel arap Moi in a peaceful and democractic election after arap Moi had turned the country into a kleptocracy. His successor is trying to rid the country of sleaze. Kenya has always been ashamedly capitalist, which does not tend to be politically correct. Kenya realises that an entrepreneurial culture and private investment will improve its lot, not loads of handouts from self – proclaimed do gooders like the United Nations and its agencies.
The UN Conference on Trade and Developement (UNCTAD) published a couple of months ago a report on the world´s poorest countries. The report implies that global integration and free trade impoverish. Of course the report does not provide anything that comes more or less close to prove. As “The Economist” remarks: “....no one is suggesting that once a country has lowered trade barriers, it can relax and play golf”.
That remark pretty much reflects my attitude. Free lunches given by politically correct aid agencies neither help countries nor people to stand on their own feet. In case you are fond of reading an alternative blue print for solutions, just turn to “The Economist” and the “Financial Times”.
Markets Mobs And Mayhem
Robert Menschel is a mover and shaker who exercises a little clout in the world of high finance. More precisely, he is senior director of Goldman Sachs. He founded the institutional investment department there. Like most folks with a purpose in life, his life does not solely revolve around work. Robert Menschel also sits on the Board of Trustees of The Museum of Modern Art and a few other outfits. Moreover, Robert penned a book with the title “Markets Mobs and Mayhem”.
In his book Robert explores the psychology of crowds and its consequences for business and culture. The author resorts to illustrations that range from the rise of the Nazis to the impact of brands on ordinary folks. Robert examines traits and characteristics of followers as well. Throughout the book Robert does not really applaud individualism in business. He rather gives individualism subtly a standing ovation, if this way of putting it is not a contradiction in terms (like military intelligence). More important to the reader who is capable of thinking independently, conclusions may be drawn about sheep mentality in other areas of life. The lessons are not only applicable to business.
All over the book there are heaps of relevant quotations scattered that make the book even more fun. Just two examples – “I do not believe in the collective wisdom of individual ignorance” (Thomas Carlyle) and “crowds are by nature unstable, with TV we now have the artificial crowd”.
Is it worth reading the book? In case you are fond of marching to the same drum, no. In case you are fond of individualism and thinking independently as well as walking the talk, yes.
The following is a list of articles written by Jurgen for the magazine:
* Working Around The Globe ~ Tips On How To Find Work Around The Globe
* Living And Teaching In Colima, Mexico ~ A Place To Rest
* Thoughts On South Africa And New Zealand ~ Hitchhiking And Economics
* Some Thoughts On Literature And An International Lifestyle ~ Reading And Living
* A Journey To Various Places In Mexico - Places To See
* Memories Of Africa ~ Namibia, Botswana and Zimbabwe
* A Long Way From Munster To Colima - Travel And The Self
* Some Thoughts On Capitalism And Investing - In 2004
* Canada From Various Perspectives ~ Montreal, Vancover And More
* A Critical Look At South Africa - Politics And Economics
* Emerging Markets and Economic Geography - Economic Growth Around The World
* A Meaningful Life Or A Turkey On The Ground - Favorite Places To Live
* Some Thoughts On Living In The Less Developed World ~ Emerging Markets
