Germany’s modern logistics and industrial hub is resilient platform for success

06 Mar Germany’s modern logistics and industrial hub is resilient platform for success

Hendrik Wüst, Prime Minister for North Rhine-Westphalia, details the main factors that have made the ambitious and innovative German state of almost 18 million people an industrial titan with a powerhouse economy comparable to Switzerland.

How would you categorize the region in terms of economic strengths and current economic trends, particularly in terms of innovation and cutting-edge developments?

North Rhine-Westphalia has a long tradition as an industrial location and is today the strongest industrial region in Europe – this is also expressed in our new location campaign “Europe’s Heartbeat”. The state is characterized by a unique mix of large, world-class industrial groups and many smaller companies that are leaders in their respective fields of business. North Rhine-Westphalia is the state of hidden champions, many of them in forward-looking high-tech industries.

In our view, industry means modernity, high-tech, innovation and digitalization. Industry is a problem solver for society and an innovation driver for a sustainable economy. To this end, North Rhine-Westphalia is equipped with an outstanding higher education and research landscape that is unparalleled in Europe. Sixty-seven universities – more than in Île-de-France, Greater London or the Netherlands, for example – and more than 110 technology centers and non-university research institutions create ideal conditions for innovation and technology transfer in Europe’s densest research network.

With this combination of research excellence and broad industrial base, North Rhine-Westphalia offers a unique ecosystem for technology-driven start-ups. In contrast to many other locations, most start-ups here are focused on B2B and industrial applications.

What is the North Rhine-Westphalia state doing to promote regrowth and FDI and what government and private sector initiatives have led to an economic rebound?

The pandemic hit our economy very hard in March 2020. We had to act quickly and decisively to support the economy during this critical first phase. This was the only way we were able to maintain supply chains and save companies from insolvency. Together with the Federal Government, we launched the first emergency aid programs and helped 430,000 applicants with more than 4.5 billion euros in the space of just a few days – unbureaucratically and fully digitalized. As the pandemic progressed, the programs were refined and adapted. To date, almost 15 billion euros have been approved across all aid programs.

Our economic structures and supply chains have remained intact, and we kept all our borders with neighboring countries open, factors that will facilitate the recovery. Since taking office in 2017, the State Government has focused on reducing bureaucracy and removing obstacles to growth. Overall, the state is well positioned to further accelerate this course after the pandemic has subsided.

North Rhine-Westphalia is Germany’s number one investment location, with more than 20,000 foreign companies based here. This position is confirmed by various rankings, including those of fDi Intelligence magazine. The pandemic had a significant impact on the promotion of foreign trade, which normally involves high levels of travel and face-to-face networking events. Here, our business development company NRW.Global Business was able to quickly adapt its services to the requirements of a more digital world. North Rhine-Westphalia has proven to be crisis-proof despite these challenges. For 2020, we registered a total of 408 new settlements and expansion projects. While the flows of foreign direct investment (FDI) in Germany and Western Europe as a whole fell by more than nine percent, in some cases by as much as 28 percent, North Rhine-Westphalia recorded only a slight decline of 4.5 percent. This means that the share of FDI projects in North Rhine-Westphalia rose from 23.1 percent in 2019 to 24.2 percent.

As State Transport Minister, you were active in pushing initiatives aimed at cutting carbon emissions. What major decarbonization initiatives are you currently working on to usher in a more circular economy?

The North Rhine-Westphalian State Government is committed to a resilient and climate-neutral industry with good jobs and an innovative approach.

To this end, we have developed various pioneering strategies. Our “H2 Roadmap” shows how climate protection and industry can be reconciled. We want to make North Rhine-Westphalia the focal point of a successful hydrogen economy. With the “Carbon Management Strategy”, we were the first federal state in Germany to present a framework for carbon intensity reduction, sustainable carbon use and CO₂ management. In addition, our “Synthetic Fuels Action Concept” provides answers regarding how to expand capacities for the complex production process of synthetic fuels.

Across our state, we are funding and promoting the development of carbon-free processes and technologies. For example, ThyssenKrupp Steel Europe is planning to decarbonize its steel production in Duisburg based on hydrogen. Another project is the Circular Valley based in Wuppertal. Just as Silicon Valley has become a center of the digital economy, we want to build the Rhine-Ruhr region into a center of the circular economy. Our “Circular Economy Accelerator” promotes technological innovation by encouraging young and dynamic start-ups to collaborate with established companies and scientific institutes.

Finally, we will continue to drive forward the expansion of renewable energies; we have committed ourselves to this in our updated energy supply strategy. Our goal is to achieve a 55 percent share of renewable energies by 2030. To this end, we will at least triple our capacities in solar energy and double them in wind energy.

You only took up office in October 2021, what are your top priorities as State Premier and what is your vision for the region in the mid-to-long-term?

My vision for North Rhine-Westphalia is a vision of a state of opportunity. The state has a strong industrial economy, excellent science, and research institutions and, above all, diverse, cosmopolitan, and committed people.

My vision is for a state that seizes the opportunity to show that climate protection, prosperity and social security are compatible; a state that seizes the opportunity to enable advancement through education. This is what I stand for as State Premier of Germany’s most populous federal state and industrial heartland.

An important topic for the future that is particularly close to my heart is education. In North Rhine-Westphalia, we have every opportunity to be a state that enables advancement through education more than ever before. Our three million children and young people are our future and must be given special attention. This is truer than ever given the current situation, because children and young people had to forego a lot during the months of the pandemic. The task now is to open up new opportunities for them.

Digital skills are also of fundamental importance for the future opportunities of our children and young people. We have made great strides in the digitalization of our schools in recent years. We are investing massively in the digital equipment of our schools and the training of our teachers. We will continue to focus on this process in the coming years to make education fit for the future.

Our research focuses on facilitating digital transformation. For example, the AI Competence Centre Machine Learning Rhine-Ruhr (ML2R) is one of the leading centers for the development of artificial intelligence and machine learning in Germany. The Max Planck Institute for Security and Privacy was founded in May 2019 in Bochum; it researches and develops the technical foundations and interdisciplinary aspects of IT security and data protection. Europe’s first quantum computer with more than 5,000 qubits went into operation at Forschungszentrum Jülich at the beginning of 2022. The Center for Advanced Internet Studies (CAIS) in Bochum will also be expanded into a new institute for digitalization research in North Rhine-Westphalia, which will deal with questions of how to shape digitalization in society.

In addition to this: In North Rhine-Westphalia, our science and business communities are very closely networked. In many places in our state, innovations are being created and answers to the big questions of our time are being developed. Around 200 companies, research institutions and organizations are working together on solutions for the digital transformation of SMEs. Advancing future technologies in pilot projects and bringing them quickly into application – that is the goal of the “Leading-Edge Cluster Industrial Innovations” (SPIN) funded by the State Government. Under the motto “Thinking the Future Together”, it brings together corporations, SMEs, start-ups and research partners between the Rhine and Ruhr.

What are your top priorities as State Premier and what is your vision for the region in the medium-to-long-term? Share with us some initiatives that characterize the region’s strength and resourcefulness?

We are currently working with all our might to continue to guide North Rhine-Westphalia safely through the pandemic. Nevertheless, it is important – despite the dynamic situation – to keep an eye on the big issues of the future: the reconciliation of industry and climate protection as well as educational opportunities. North Rhine-Westphalia is already well positioned. We have every chance of ensuring that the state will remain a climate-friendly, innovative, and approachable industrial and educational state in the future.

One of the greatest tasks of our time is climate protection. Here, we are leading the way as a state, for example by passing the first climate adaptation law in the country. However, this path towards climate neutrality also entails necessary changes. The phase-out of coal production marks the end of an era in North Rhine-Westphalia – and especially in the Rhenish mining area. In this generational project, it is therefore particularly important that we consistently consider the economic, the ecological and the social together. For us, one thing is clear: the Ruhr region has the potential to become a Europe-wide showcase region for sustainable energy supply. To take advantage of this opportunity, we are pooling all the know-how from science, business, politics, and society, among other things within the framework of the Ruhr Conference and the Zukunftsagentur Rheinisches Revier.

As State Premier of North Rhine-Westphalia and for me on a personal level, what counts is that we always involve the people in all our measures, that we take care of the concerns and needs of the citizens and tackle the projects together. Because in North Rhine-Westphalia we know: It works best when everyone pulls together.

At the same time, it is clear: Politics must create the right framework conditions. For good jobs, prosperity, and social security. All in the spirit of the social market economy that has made our state strong. At the same time, good education is the key to the future of every individual and to the success of our state. To ensure that all children – regardless of their home life – get the best opportunities, we have launched 60 talent schools over the past four years. We are also strengthening our education and science location with the establishment of the “Research Departments” of the University Alliance Ruhr. What the University of California has achieved in the USA can also be achieved in North Rhine-Westphalia.

As a team in North Rhine-Westphalia, we will succeed in reconciling sustainable climate protection, a strong economy, and a good coexistence.