Request a live demo presentation

One of our sales representative will call you soon

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

We have generated thousand of leads for our happy customers

  • company
  • company
  • company
  • company
  • company
  • company
  • company
  • company

Major industries in Germany. Is German economics worth investing into?

With GDP currently sitting at over $4.2 trillion, Germany has the largest economy within Europe, and the fifth largest worldwide. The country is one of the top-performing exporters, alongside China and the USA, having previously been the single leader for over five years. Foreign investment in Germany has reached almost 470 billion euros, demonstrating the large amount of potential the country has to offer international businesses.

As well as its reputation for producing goods of the highest quality, Germany also enjoys one of the best productivity rates of any other country. It's highly skilled workforce, comparatively low labour costs and business-friendly tax rates also make it an attractive place to expand into. The country has a diverse economy, fuelled by various thriving industries. In this article we'll be exploring some of the top sectors for those seeking business opportunities in Germany, with an overview of the type of potential they currently offer.


Top 7 industries in Germany to invest in

Automotive sector

“The automotive sector is the backbone industry in Germany"

This quote from Hui Zhang, the Managing Director of NIO Germany GmbH, sums up the importance and prestige of the German automotive industry. There’s barely a person in the world who wouldn't have heard of BMW, Mercedes or VolksWagen; everyone knows at least one German car brand. Automotive is truly one of the largest industries in Germany.

Along with traditional car manufacturing, Germany OEMs are increasingly developing the e-vehicle production sector. The Government supports the ‘green’ vehicle market at the research funding level, as well as contributing to infrastructure development and providing subsidies for buyers, thus making this innovative automotive development direction very attractive to investors.

Here are just some of the statistics which demonstrate the excellent investment potential provided by the German automotive industry.

German Automotive Industry Facts and Figures

  • German Original Equipment Manufacturers (OEM) are producing every fifth car in the world.

  • German car manufacturers have produced more cars than the UK, France and Spain together in 2015. As the Germany Works infographic below demonstrates, the German share was 5.7 million cars vs the UK and France - 1.6 million each and 2.2 million cars from Spanish producers.

  • Over 400 billion euros revenue was generated by the German automotive industry in 2017, making it the biggest and most significant industry for the German economy.

  • The 2018 World Bank Logistics Index ranks Germany at the first place due to its high quality transport & logistics and information infrastructure.

  • Germany has been the leader in Foreign direct investment (FDI) projects in the automotive sector for the last 5 years. According to the Germany Works project, it can boast 680 projects as the origin country vs the 560 in Japan, 355 in USA, 176 in France and just 103 in China.

As the FDI projects destination country, Germany with its 131 project leads the Top 5 countries in the world, beating the UK (118), Poland (92), Turkey (85) and Hungary (73).

The German government is one of the most enthusiastic in terms of its support for ‘green’ vehicles, thus creating an attractive e-vehicles market in the country. Ultimately, the country’s goal is to become the worldwide leader in the production and consumption of electric transport and relevant technologies by 2020.

  • 70,000 - this is the number of AC charging stations planned to be opened by the end of 2020 by the German Government. Currently, there are 7,100 AC charging stations in Germany.

  • The plug-in electric vehicle (PEV) tax exemption is provided to owners of e-vehicles, amounting to 5 years for cars registered in 2016 - 2020 and 10 years for those registered in 2015 or before.

  • The Annual Tax Act experienced some improvements that will make the electric vehicles, that are usually more expensive, cheaper to maintain, to compensate the expenses difference between them and the conventionally powered ones.

  • Bonus for the employees: if your employees charge their e-car for free at their workplace, they can enjoy zero income taxes for the benefit

Germany is the world's leader in automotive innovations, allocating 33% of all the spendings on research and development in the sector.

  • An impressive total of 21 billion euros was invested in innovation by German car manufacturers during 2016.

  • There are 114,000 R&D professionals in the auto industry in Germany, making this country the worldwide leader.

  • Automotive is the main focus of 9 of the top 10 German patent filing companies.

As for the workforce, the country’s automotive industry attracts a steady stream of skilled and well-educated employees. German engineering students are aiming for a career in the automotive sector more than any other. Their educational background, including classroom as well as on-the-job training, creates a breeding ground for skilled workforce development.

Energy sector

The energy transition field is rapidly developing in Germany, being one of the country’s and world’s top priorities for the last few years. Now, having energy efficiency as an international priority, the German government provides solid investment and support of innovation in this sector.  

Check out some facts and figures about the Energy sector below; these are likely to make an investment very tempting, be it establishing a related business in Germany, or contributing with donations for specialized funds like the Global Energy Efficiency and Renewable Energy Fund (GEEREF).

German Energy Sector in Numbers

  • Germany is the leading market in terms of wind energy in Europe, with 65 GW of total capacity, 6.6 GW of them being newly installed in 2017, according to the Wind Europe 2018 Conference resume. The country drives the European offshore wind industry, exploiting turbines in the North sea and the Baltic sea.

  • Cumulated photovoltaic capacity per capita of 43 GWp puts the German market in the first position worldwide, as 1.75 GWp was installed in 2017 only.

  • The “Green Tech Atlas” of the German environmental ministry declares 9%+ yearly growth of the local environmentally friendly energy generation, distribution and storage market, the turnover totalling an impressive 317 billion euros in 2025 vs 162 billion euros in 2016.

  • The state is also planning to grow the amount of e-vehicles in the country to 5,880,000 in 12 years. 2030 is expected to see a total of 6 million of these vehicles being sold across Germany.

  • The turnover of the German bioenergy industry was over 12 billion euros in 2016 and has continued to grow during 2017 and 2018. Electricity use is getting fuelled by biomass more and more in the country.

  • Germany is the first country in Europe to build structures which produce more energy than they consume. The EU requirement of 0% energy use standards for new buildings is yet to come.

  • The government’s investment in the Kopernikus project, related to energy transition, is planned to reach as much as 400 million euros by 2025.

Check the infographic from Germany Works below to see more interesting facts regarding energy, energy saving, green energy and energy transition in Germany.

The investment-friendly climate attracts many international businessmen to the German Energy sector. The Energy Industry Act from 1998 gave a nice start for that, fully liberalising the local electricity market. As for 2017, there were 1000 organisations involved in smart energy infrastructure, producing innovations and new solutions to balance the unstable supply of renewable energy sources.


Environmental technologies

Scientists around the world have long said that human activity is gradually destroying our planet and leading to irreversible consequences for nature. The 21st century is the time when the awareness of how important it is to protect the environment is replaced by action.

Germany is at the forefront of these measures, with increasing innovation in environmental technologies development and their implementation. Water treatment, climate change, recycling and waste management are the fields getting the most attention and governmental support. 19% of German GDP is planned to be spent on environmentally friendly products by 2025.

Environmental technologies can certainly be named a German industry of the future, or even the industry on which the future depends. Let me get you acquainted with some details on this important sector of the German economy, that demonstrate why these kinds of technologies are worth investing in.

German Environmental Technologies Details

  • A remarkable 14% of the global trade share of environmental protection goods belonged to German manufacturers during 2016, and this number keeps growing.

  • According to Germany Works, the biggest share of the 15% of German GDP, allocated for the environmental protection products, belongs to climate protection.

  • 20 billion euros - this was the approximate share of the waste management and recycling markets of Germany in the world’s market volume in 2016. It is expected to grow to 32 billion euros by 2025.

  • The biggest sustainable water management market in Europe, worth 28 billion euros, is the German one. It’s predicted to reach 12% annual growth by 2025. One of the largest recipients of investment is the private sector. Why not make your business a part of it?

  • 977 million euros of German export volume in 2016 made it the biggest exporter of water and wastewater technologies in the world.

As for the legal framework, Germany has a very progressive environmental regulation, embodied in the German Waste Management Act (KrWG). Foreign companies are always welcome to offer innovative solutions for waste treatment technologies.

One more important agreement in this field is the German Packaging act, provoked by the seemingly unstoppable growth of packaging waste. It establishes higher packaging recycling quotas. They have to grow up to 63% for plastic packaging and up to 90% for metals, paper and glass by 2022.

Another field in the Environmental Technologies sector, fully open to foreign investment, is the sewage sludge use. It is currently used in agriculture for fertilization, but as long as this is going to be prohibited and nutrients recovered, specific recovery technologies are needed. This creates a lot of room for new market players, who will benefit from full government support.

  • The years 2015 - 2020 are planned to be the time of the 3rd renewal of the FONA programme (“Research for sustainability” of the Federal Ministry of Education and Research (BMBF) and will get funding of two billion euros.

  • BMBF is looking for SMEs to join the “Sustainable Water Management” funding programme and collaborate with industry partners. It also offers them its full support.

See here how the Environmental Technology research is carried out in Germany.

Germany occupies the leading position in the global green economy, due to its progressive environmental policy, complementary legal framework and strong environmental technologies. But environmental issues and challenges still persist, so there constantly appear opportunities for international organisations to join the market of one of the main industries in Germany and contribute to advanced environmental technologies.


Information and Communication Technologies (ICT)

The German ICT market is the largest in Europe, one of the largest in the world and the best prospect industry sector for Germany. The products and services are mostly of US origin, thus providing big market shares to leading brands such as IBM, Microsoft, SAP and Oracle. This is also the main reason for the hosting of key ICT trade shows like ITA Berlin, CEBIT,  and IT-SA, serving as the best marketplaces for US companies targeting customers and partners from foreign countries.

Besides the enormous companies mentioned above, the German ICT market also hosts plenty of highly specialized SMEs, benefiting from state support and financing. This opens various opportunities for international companies to enter the German ICT market (which, according to research from, is a steadily growing one) and become part of one of the most well-functioning innovations development and implementation systems.

The reliability and appealing investment opportunities of the German ICT market is reflected in the information below.

ICT Facts and Figures

  • According to Germany Trade & Invest (GTAI), Germany owns the biggest share of the European software market, which is 22.3% vs 21.6% of the UK share and just 12.1% of that in France.

  • 4.2 billion euros - this is the security technologies market share of Germany in Europe. It is second only to the UK (5.9 billion euros) and beats out France with its 3 billion euros market value.

  • The largest cloud market in Europe will be the German one, provided the rates of growth remain at 25% yearly according to the Germany Works forecast. Solution-oriented technologies are in high demand in the country, so the forecast looks quite realistic.

  • 10,073 million euros have already been spent on public cloud service by now. The difference with the UK is currently quite small (the UK share is 9,934 million euros) but, keeping in mind the piece of info above, it’s going to grow with time.

  • Cybercrime security is one of the most promising ICT sectors in Germany. The country currently sees losses of 55 billion euros annually from these types of crimes.

  • State support for security technologies in Germany is legally based on the “High-Tech Strategy”, providing incentives for different projects.

  • 21% per year - this is the expected e-energy revenues growth rate, according to Bitkom. Green tech is driven and managed by ICT. Therefore the demand for renewable energy technologies, and, respectively, international companies bringing the best solutions, will grow accordingly.


Healthcare and Life Sciences

Perhaps somewhat surprisingly, Germany is the European leader for healthcare market size; demographic change and technology being the factors that are pushing this industry forward. Its volume, high amount of patients, numerous healthcare providers and producers of medical technology grant a lot of possibilities for businesses to find their niche within this market.

The 2 main factors - the location and market size - make this country highly desirable for international companies looking to expand.

Want to learn more about exactly how the Life Sciences and Healthcare industry in Germany can make it easier to establish an international business? Check out the facts and figures below.

Life Sciences Sector Interesting Facts

  • The German Healthcare market growth rate is exceptionally stable - 3.8% per year for the last 11 years.

  • 36 billion euros - this is the amount of money spent on medical devices out of a total of  374 billion euros on healthcare spendings in Germany in 2017. Private spendings, not included in this figure,  were estimated to be around one billion euros per day.

  • Being one of the biggest sectors for the German economy, the healthcare industry provides jobs for more than 5.5 million employees, a proportion of them working across 1500+ hospitals with around half a million beds.

  • The constantly increasing share of privately owned hospitals, enjoying the state’s financial and legal support, creates a promising investment opportunity for businesses

  • 41.5 billion euros pharmaceuticals market value is driving Germany to another leading position in Europe and 4th place worldwide.

  • Enormous spendings of 6.2 billion euros on R&D in pharmaceuticals made Germany the European leader in this field in 2016.

  • One more impressive number regarding the market size: 376 million euros - this is the total amount of investment in biotech companies based in Germany. They make up 25% of the total number of such companies in Europe.

  • 27% - the expected growth rate for diabetes management smart solutions. According to GTAI research, the market is going to grow from 39.2 million euros in 2018 to 98.3 million euros in 2023. There’s an unfortunate reason for this - the increasing number of people suffering from diabetes - an additional 1.4 million people in the last 14 years.

  • The legal framework for digital health solutions implementation is provided by the E-health act, including regulation of telemedicine and mobile platforms and health-IT implementation.

  • Biopharma has shown a record-breaking 51% of all approvals of new drugs in 2017. 369 biopharma compounds were in clinical development in the same year - 3 more than in 2016.

  • The small (less than 100 employees) medical technology companies provide excellent investment opportunities, making up the absolute majority (11,800+ out of 12,000) of companies of this kind in Germany.

  • R&D numbers: provides jobs for 15% of all employees in Germany; 9% of revenue is spent on it.

  • The share of new (up to 3 years old) medical devices sold in Germany is 33%.

  • 30+ medical technology cluster networks are activating in Germany, 24 of them being certified to ECEI standards.

  • According to GTAI, the medtech sector innovative clusters currently boasts impressive numbers. See the infographic below.

Being strongly supported by the state in terms of research and development, the healthcare and life sciences sector benefits from a stable market, full of wealthy organisations, and ready to host and support even more. Due to this, the investment climate for innovation in health is one of the best among the German industries.


Logistics Industry

Logistics is one of the major industries in Germany and truly one that this country can be proud of. Being a part of the DACH market the country can benefit from the common road network, which is maintained to perfect conditions by DACH members. Simplified to absent border control, and a developed transport and warehouse network are just some of the factors allowing the German logistics industry to prosper.

Thanks to the fact that it’s located in the center of Europe and is the main player in the European economy, Germany employs a very high standard of logistics, linking the market of Western and Eastern Europe. The country is well known for providing and developing high-quality logistics services and technologies, allowing it to monopolise 25% of Europe’s total logistic market revenue.

German Logistics Industry Details

  • The German Logistics market is the largest in Europe, it’s market revenue (259 billion euros) being almost the same as the UK (127.9 billion euros) and France (137.9 billion euros) revenue combined.

  • It’s no wonder that the country was ranked as number one in the world in 2014, 2016 and 2018 by the World Bank's Logistics Performance Index 2018.

  • The title of the biggest intralogistics exporter also belongs to Germany. It sits ahead of China and the USA with its 13.5 billion euros vs 12.4 and 6.6 billion euros respectively.

  • The German logistics market size is also impressive in terms of number of people - 82 million Germans, 500 million EU residents and 250 million consumers located within overnight delivery distance.

  • Being Europe’s logistics hub, Germany hosts 60,000 logistics companies and a workforce of three million, as well as the required education.

  • According to the German Logistics Association (*BVL) and the Ifo Institute, the climate in the local logistics industry is “excellent” and provides wonderful investment opportunities.

International logistics companies can be connected with respective networks and service partners in Germany and the local politics and economy within the Logistics Alliance Germany. This is the joint creation of the German logistics industry and the Federal Ministry of Transport and Digital Infrastructure.

The state-level support, perfectly planned and comprehensive logistics infrastructure and developed transport and communication network make Germany one of the most desirable investment destinations.

Machinery and Equipment Industry

The high-tech orientation of the German economy needs strong technological motors, one of them being the M&A sector, which includes robotics, software, hi-tech materials and electronics - the main technologies of the future.

The strong German engineering tradition combined with the country’s leadership in modern technology development and application and the excellent industrial base, make the Machinery and Equipment (M&E) industry the most innovative in Germany, and place it among the top industries in this country.

Machinery and Equipment Industry Facts and Figures

  • SMEs make up the majority of companies working in the M&E industry, most of them being privately held.

  • Germany sits in 3rd place worldwide in terms of M&E turnover, giving in to only China and the USA.

  • The value chain in the M&E sector consists of nearly 6400 companies, making it the largest industry in Germany.

  • Germany’s M&E share in the world’s industrial machinery trade is 16% - making it the global leader as a result.

  • Following the efficiency and innovation principle, the German M&E is actively contributing to the country’s climate goals achievement. It constantly works on the energy efficiency optimization in production processes.

  • 26 billion euros - the German M&E’s record turnover which was reached in 2017; 20% of it belonging to automotive. The actual 18% annual increase looked impressive taking into consideration the expected figure was just 10% per year.

  • Machine Vision (MV) - the key technology for the automation industry, is among the largest and the fastest growing economic subsectors, with its turnover already twice as big as that from the previous 10 years.

  • The M&E sector gross value is expected to grow by 23 billion euros by 2025 due to the Industrie 4.0 global automation and data exchange trend, which allows companies to make their connected processes more client-oriented.

  • The Smart Industrie 4.0 solutions are in high demand in the German domestic market, and the infographic from Germany Works serves as a demonstration of this.

  • Industrial robots is one more field bringing the world’s leadership position to Germany in terms of intellectual property.

  • The most important asset of the M&E industry is a well-trained workforce, the majority consisting of skilled craftsmen and university graduates.

  • 741 foreign direct investment (FDI) projects - this number has positioned Germany in the 1st place in Europe.


To Sum Up…

As we've explored in this article, the German economy offers a diverse array of business opportunities across multiple strong and exciting industries. Whether you're looking to take advantage of the country's strategic location, high-quality manufacturing, or large and well-educated population, you're sure to find potential aplenty in any one of these sectors.