Leading Sectors for U.S. Exports & Investments

Agricultural Sector

Overview

Germany is the second largest importer and third largest exporter of consumer oriented agricultural products worldwide, and by far the most important European market for foreign producers. The retail market’s key characteristics are consolidation, market saturation, strong competition and low prices. Germany is an attractive and cost-efficient location in the center of the EU. While many consumers are very price sensitive, the market also provides many wealthy consumers who follow value-for-money concepts. These consumers are looking for premium quality products and are willing to pay a higher price. Germany still has the lowest food prices in Europe, and German citizens spend less than 11 % of their income on food and beverages. Low food prices are a result of high competition between discounters and the grocery retail sale segment.

Key market drivers and consumption trends

Leading Sub Sectors

Tree Nuts

The category of tree nuts includes almonds, pistachios, pecans, hazelnuts and walnuts. Germany does not produce significant quantities of these products, and supply therefore comes primarily from imports. The United States is the largest supplier of tree nuts to Germany. The leading competitor for the United States in the German tree nut market is Turkey. Many U.S. agricultural associations actively promote their products in Germany, including the Almond Board of California, California Pistachio Commission and the California Walnut Commission. Most tree nuts are used as ingredients by the food processing sector. Almonds are the most important commodity within this category. Further products with good sales potential include walnuts, pistachios, and pecans.

in million USD	2016	2017	2018	2019 (Estimated)
Total Local Production	0	0	0	0
Total Exports	1,171	1,194	1,282	1,100
Total Imports	3,137	3,261	3,229	3,100
Imports from the US	605	660	730	720
Total Market Size	1,966	2,067	1,947	2,000

Source: Global Trade Atlas query dated April 24, 2019

Fishery Products
Fish and fishery products enjoy growing popularity in Germany. The German market offers lucrative opportunities for fish and seafood products. Fish consumption is growing as consumers associate fishery products with a healthy diet. The best prospects for U.S. seafood exports are salmon, shrimps, crabs, caviar substitutes, cuttlefish and squid, sea urchin, catfish, lobster and scallops. The two most important U.S. fishery export products to Germany are Alaska Pollock and salmon by value. 

in million USD	2016	2017	2018	2019 (Estimated)
Total Local Production	2,315	2,400	2,534	2,600
Total Exports	2,448	2,534	2,566	2,600
Total Imports	5,302	5,570	5,662	5,750
Imports from the US	198	211	185	200
Total Market Size	5,169	5,427	5,630	5,750

Source: Global Trade Atlas query dated April 26, 2019

Web resources:

Fish International – is the leading fish and seafood show in Germany. It is held on an annual basis in Bremen. Next show: February 25-27, 2018

Wine
Germany is the world's largest importer of wine by volume and third largest by value. In 2018, German wine imports were valued at more than USD 3.1 billion. Italy, France and Spain are the leading suppliers of wine to Germany with a combined import market share of 78%. U.S. wines, together with other “new-world” wines, have developed an increasingly good reputation for quality in the German market. In 2018, the value of Germany's imports of U.S. wines totaled USD 45 million.

in million liters	2016	2017	2018	2019 (Estimated)
Total Local Production	901	746	1027	900
Total Exports	362	384	372	380
Total Imports	1,485	1,529	1,465	1,400
Imports from the US	40	36	25	27
Total Market Size	2,024	1,891	2,120	1,920

German production data is only available on a volume basis; therefore, this table is in liters

Sources: German Office of Statistics (German production)

Global Trade Atlas (trade) query dated April 24, 2019

Pet Food

Germany is one of the leading countries for pet ownership in the world. Germans are willing to pay a premium to properly feed their pets, and interest in specialty health pet food products is growing rapidly. Most pet foods are produced domestically and the EU requires pet foods to be derived from meat that can be used for human consumption. Despite the bureaucratic obstacles, opportunities for exporting pet food products to Germany are available given the considerable size of the market.

in million USD	2016	2017	2018	2019 (Estimated)
Total Local Production	3,509	3,588	3,900	3,900
Total Exports	1,408	1,599	1,850	1,850
Total Imports	982	1,187	1,200	1,200
Imports from the U.S.	3	3	4	4
Total Market Size	3,083	3,176	3,250	3,250

Global Trade Atlas (trade) query dated April 26, 2019

Web resources

Agricultural Attaché Reports

Attaché reports provide information on market opportunities, crop conditions, new policy developments and information on the German food industry. Some standard reports include: Retail Market Report, Exporter Guide, Food Service Report, and market briefs on wine, seafood and other select products. Attaché reports can be found at https://gain.fas.usda.gov/Pages/Default.aspx. In recent years, many of the German reports have been consolidated and are submitted as EU reports. We recommend that companies interested in the German market also review the EU reports.

U.S. Agricultural Commodity Associations Active in Germany

A number of U.S. agricultural commodity and other trade associations conduct market development programs in Germany. In some cases, these associations maintain field offices in Germany, while others may have a trade representative or public relations company representing their interests. Others may cover Germany from elsewhere in Europe or from offices in the U.S. The USDA-operated Market Access Program (MAP) and Foreign Market Development program (FMD) provide a portion of the funding for these association’s market development programs. For further information about the MAP and FMD programs or to know more about which associations are active in Germany, please contact the Office of Agricultural Affairs at the U.S. Embassy in Berlin (http://fas-europe.org/countries/germany/).

Trade Shows

In Germany, trade fairs play a key role in presenting new products to the trade or in finding additional buyers and importers. The major international trade fairs are:

ANUGA – the world´s leading food fair for the retail trade and the food service and catering market. It is held every two years in Cologne. Next show: October 5-9, 2019

FRUIT LOGISTICA – the leading show for fruit and vegetables, dried fruits, and nuts. It is held on an annual basis in Berlin. Next show: February 5-7, 2020

Fish International – the leading fish and seafood show in Germany. It is held every two years in Bremen. Next show: February 9-11, 2020

Biofach – the leading European trade show for organic food and non-food products. It is held on an annual basis in Nuremberg. Next show: February 12-15, 2020

Prowein – the leading wine show in Germany. It is held on an annual basis in Dusseldorf. Next show: March 15-17, 2020

Interzoo – the world leading pet industry exhibition. It is held every two years in Nuremberg. Next show: May 19-22, 2020

Aerospace/ Defense/ Security

Overview

Total market size = (total local production + imports) – exports

Aerospace & Defense Market in USD millions (The security market is not reflected in the table but in the written paragraph below.)

	2016	2017	2018	2019 estimate
Local Production	41,509	45,188	47,240	46,740
Total Exports	29,886	33,439	35,902	35,522
Total Imports	19,810	18,824	18,621	18,462
Total Market Size	31,433	30,573	29,959	29,680
US Imports = US Market Share	5,801	6,860	8,917	9,000
EUR-USD Exchange Rate	1.1069	1.1297	1.1810	1.14 projected

U.S. aerospace & defense manufacturers produce the highest trade surplus of all manufacturing sectors, year after year. According to TradeStats Express - a U.S. Department of Commerce database showing the latest global patterns of U.S. merchandise trade - the 2018 U.S. aerospace exports to Germany amounted to $8.92 billion. The trade surplus was USD 6.36 billion, representing a 67 percent increase over 2016 (USD 3.8 billion). These figures are in stark contrast to the European statistics stating exports of USD 1.49 billion. This is due to a different approach in assessing the sale of sub-systems and components. Aerospace & defense is complemented by homeland security & public safety, an industry spanning across 16 vertical markets with a projected global turnover of more than USD 400 billion in 2019. U.S. manufacturers are well-positioned to benefit from a robust market growth in Western Europe, especially Germany.

Germany hosts the world’s third-largest trade show for aerospace & defense (ILA Berlin Air Show), the world’s largest trade show for aircraft cabin interiors (Aircraft Interiors Expo / AIX) and Europe’s largest trade show for general aviation (AERO), making it an ideal platform for U.S. companies to meet with their global partners and buyers. The major safety & security shows that are relevant for the German market are held in Essen (Security Essen), but also in London (DSEI) and Paris (Milipol).

Leading Sub-Sectors

Germany has the third-largest aerospace & defense market in Europe, with 2018 revenues at USD 47.2 billion, following the UK at GBP 78 or USD 104.2 billion (including land defense systems) and France at USD 77.2 billion. Some three-fourths or USD 35.5 billion of the German production are exported. France received a third of the exports with USD 12.3 billion. Airbus intra-company trade makes up the largest portion of these exports, as part of their geographically dispersed production model with several major sites in Germany and France. The German homeland security & public safety market amounted to USD 20.3 billion in 2017. This figure was published at the “Security Essen” trade show in August 2018. It is slightly higher than the USD 19.2 billion quoted in the previous version of this report. The industry will see steady growth rates until 2020, mostly due to ongoing upgrades of the German internal security and migration enforcement infrastructure and an increased need for security services. The security services market makes up 50 percent of the overall market and grew by 2.5 percent to USD 10.34 billion in 2018.

Aerospace is a German Government priority. The Federal Ministry of Economic Affairs and Energy (BMWi) lists aerospace as a key industry with high growth rates and a strong industrial core in Germany. The revised and updated “2018 Technology Strategy of the German Aerospace Industry” builds on BMWi’s earlier “Aerospace Strategy”, underlining the particular importance of the aerospace sector for Germany as an industrial country both technologically and economically. Besides aiming at increased competitiveness, the aerospace sector promises to make significant contributions to overarching societal goals, especially with regards to climate, noise and environmental protection. Moreover, BMWi has initiated the 6th iteration of the Aerospace Research Program (LuFo)—a grant program for aerospace research and technology projects—in the fall of 2018. Best prospects for U.S. exporters exist in the following segments: commercial aircraft, business jets, turboprops, helicopters, UAVs, structures, propulsion systems, subsystems for aerospace vehicles; military aircraft, air defense systems; spacecraft, launch systems, communications systems; access control, identity management, integrated systems, security services.

The main vertical markets for homeland security & public safety in Germany are airport security, smart borders, telecommunications and critical infrastructure and police modernization.

Policy Objectives and Challenges

U.S. suppliers should be aware of the effects of the U.S. Export Control Reform (ECR) regarding changes to the EAR and ITAR for U.S. aerospace & defense companies. The Commercial Service will continue to support U.S. companies by conducting frequent and active outreach to the Bundeswehr’s Federal Office of Equipment, Information Technology and In-Service Support (BAAINBw) in Koblenz, and following the latest aerospace, defense and security policy developments and discussions in Germany. On an international level, we will gain insight from organizations, such as the Aerospace and Defense Industries Association of Europe (ASD), the U.S. Aerospace Industries Association (AIA) and Homeland Security Research (HSR) in Washington, D.C. to understand their positions on transatlantic trade issues and communicate U.S. objectives.

In a number of recent tenders, the German military and some state police forces have imposed non-ITAR/EAR/PESCO clauses on prospective bidders, asking them to attest that their products do not fall under the respective regimes. This excludes many U.S.-designed and U.S.-made defense-sector goods.

Opportunities

Opportunities include a 4.5 gen fighter jet program for the German Air Force; anti-submarine warfare (ASW) / anti-surface warfare (ASuW) helicopters for the German Navy; exo-atmospheric engagement systems for German F124 frigates; Search and Rescue (SAR) helicopters for the German Federal Armed Forces (Bundeswehr); heavy lift helicopters for the German Army; gas turbines for 4 multi-role combat ships (MKS 180) for the German Navy; Scalable Space Inertial Reference Units (SSIRU-L) for SARah, Germany's radar reconnaissance satellite constellation; integrated air and missile defense system (TLVS) for the Bundeswehr; large twin-engine transport helicopters for the German Federal Police; lightning detection services to help support the aviation industry clients of the German Meteorological Office (DWD).

Web Resources

Trade Events

Other Web Resources

German Aerospace Industries Association (BDLI)

German Airport Technology & Equipment (GATE Alliance)

HANSE-AEROSPACE e.V. (Largest independent association of aerospace suppliers and service providers in Germany)

ALROUND (Association of aerospace-oriented SMEs in Germany)

German Helicopter Association (DHU)

Advanced Manufacturing

Overview

Advanced Manufacturing (AM) is the convergence of information and communications technologies with manufacturing processes to drive real-time control of energy, productivity and costs across factories and companies. It was identified as one of the highest-priority manufacturing technology areas in need of federal German investment.

The OPC Foundation (Object Linking and Embedding for Process Control) is cooperating with the key German Association, the VDMA (German Mechanical Engineering Industry Association). In June 2016, these two parties signed an MOU to build an international standards structure utilizing the OPC UA Machine Vision Companion Specification. This will prepare the machine vision and robotics industry for Industry 4.0 and for the factory of the future, and will help SMEs to implement robotics and machine vision software language with their products.

Policy Objectives and Challenges

A major challenge for industry and government is the definition of reference architecture and frameworks necessary for interoperability. They are also challenged with how to build confidence around new and innovative approaches to security. In April 2016, the two major international players, the International Internet Consortium (IIC) and the German-led Industrie 4.0, agreed to collaborate for the benefit of interoperability of systems from the different domains. In Germany, the relevant association, such as the ZVEI (The German Association for Electrical & Electronic Industry), VDMA (German Engineering Association), BitCOM (Federal Association for Information Technology, Telecommunications and New Media) are driving the discussions.

Leading Sub-Sectors

Advanced Manufacturing is believed to provide the best export potential for industries such as Machine Tools/General Industrial Equipment, Robotics, Information and Communication Technology, Process Control Instrumentation and Electronics Industry Production Equipment, Additive Manufacturing and Advanced Materials for the next five to ten years. Through 2025, 84 percent of German manufacturers plan to invest EUR 100 billion or more per year into smart manufacturing technologies, but only 20 percent are already spending money on investments.

Robotics and Automation:

Germany is the fifth largest robot market in the world with about 20,000 industrial robots utilized in various industries each year. The main industries are automotive, electrical and electronics, metal working, chemical rubber and plastics and the food industry. Please note that the data includes the industrial/commercial use of robotics only. The Robotics + Automation Association in Germany represents three industry segments: Robotics, Machine Vision and Integrated Assembly Solutions with combined annual sales of EUR 14 billion in 2017. Sales are expected to grow by 9 percent in 2018 to EUR 15.4 billion. Future topics are the utilization of artificial intelligence, human-robot collaboration, digital transformation in production, and service robotics in the commercial industry.

Additive Manufacturing and Advanced Materials:

Germany is home to Europe’s largest advanced materials market. The strong growth of its high-tech industries requires appropriate materials. Depending on the material, growth rates can amount to 10 -15 percent annually. Among the materials sectors with the strongest market potential are composites and particularly additive manufacturing. Formnext, the major European additive manufacturing trade fair, reached a new space record for their show in November 2018. Traditional materials such as chemicals and plastics are expected to reach more moderate but still good growth rates of 3-4 percent in 2018. In 2017, this market segment achieved annual sales of EUR 61 billion. In 2019, the triennial ‘K’ Show will take place in Dusseldorf, October 16-23. The German chemicals industry is expected to grow an estimated 5.9 percent in 2018, or to approximately EUR 204 billion.

German Machine Tool and Precision Tool Market

The ongoing boom in almost all user industries worldwide had already driven production output to more than EUR 16 billion in 2017. Imports from the USA have been about EUR 120 million for machines and equipment. The capacity utilization was running at about 93 percent, according the German machine tool association. The German market consumption is about EUR 8 billion. The figures for German precision tools industry - whose most important partner is the USA with more than EUR 500 million imports - are similar with a generated increase of 7 percent in 2017 up to EUR 10 billion, and expected production of EUR 11.1 billion in 2018.

Sensors and Instruments:

Sensors and instruments are another growth subsector. In 2015, sales were EUR 125 million, making it the fourth largest purchaser of U.S.-made products in the category. Between 2009 and 2015, sales of these products grew by 8.6 percent annually (CAGR). Major competitors include SICK AG, Siemens Sensor Systems, Bosch Sensortec and Beckhoff Automation. The German industry expects further growth opportunity in 2019, particularly through the industrial automation/internet of things.

Opportunities

Germany maintains a highly open and transparent business environment, and there are few formal market access barriers. Probably the greatest challenge to entering the German market is conforming with German electro-technical standards and conformity assessment procedures, which differ markedly from those in the United States. For most electrical components such as plugs and cables, U.S. and European standards are nonaligned. In practice, this means that for most U.S. machinery makers, the additional labor required to assemble machinery for the German market will affect pricing by inflating the price paid by the customer while decreasing the cost competitiveness compared with domestic and other European-made machines. As part of the European Commission’s “Machinery Directive,” machinery sold throughout the EU is required to obtain a CE marking whenever the product is covered by specific product legislation. CE stands for “Conformité Européenne,” and is intended to demonstrate compliance with European safety and environmental standards.

Challenges & Barriers

Germany maintains a highly open and transparent business environment, and there are few formal market access barriers. Probably the greatest challenge to entering the German market is conforming with German electro-technical standards and conformity assessment procedures, which differ markedly from those in the United States. For most electrical components such as plugs and cables, U.S. and European standards are nonaligned. In practice, this means that for most U.S. machinery makers, the additional labor required to assemble machinery for the German market will affect pricing by inflating the price paid by the customer while decreasing the cost competitiveness compared with domestic and other European-made machines. As part of the European Commission’s “Machinery Directive,” machinery sold throughout the EU is required to obtain a CE marking whenever the product is covered by specific product legislation. CE stands for “Conformité Européenne,” and is intended to demonstrate compliance with European safety and environmental standards.

Web Resources

Trade Events

German Organizations:

U.S. Associations:

Healthcare

Overview

Germany has a long history of producing high quality medical equipment, with an emphasis on diagnostic imaging, precision medical and dental instruments and optical technologies. Not only is Germany the third-largest market in the world after the United States and Japan, but it is also by far the largest European market, twice the size of the French market and three times as large as those of Italy, the United Kingdom and Spain. The German medical device market ranks no. 1 in Commerce’s Top Market Reports.

The Healthcare/Life Sciences (HCT) industry is a priority for both the EU and Germany as reflected in the European Regional Development Fund (ERDF – or EFRE in German) program 2014-2020, as well as the German Länder implementation and tendering of this program. “Horizon Europe”, a European Incentive Program for Research and Innovation agreed upon by the EU Council and Parliament and scheduled to begin on Jan. 1, 2021, also has a focus on health and health sector related R&D and innovation. Projects will focus on smart health and aging, rollout of digital models of care and value-based care. All of this aims to increase opportunities for U.S. suppliers to participate in healthcare infrastructure, hospital development projects and partner with German and EU firms. The German healthcare system falls behind in digitalization and digital solutions compared to other EU countries, and the German government is taking steps to mandate progress. This will offer excellent export and partnering opportunities for innovative U.S. health solution providers.

Medical Technologies (MED) is the key sector of the HCT industry. The U.S. is home to the world’s leading medical device manufacturers. One in eight Americans is employed by the U.S. healthcare industry; there are 16 million medical-related jobs, with about $2.7 trillion in profits annually, according to U.S. Bureau of Labor Statistics. Roughly 90 percent of the over 7,000 medical device manufacturers are often export-ready SMEs, and many of the world’s largest medical device manufacturers such as GE Healthcare, Medtronic, 3M are U.S.-based. Germany is Europe’s largest market for medical devices, accounting for roughly $41 billion annually. Key industry drivers include the power of innovation, a solid financial basis of the industry (80 percent of which are SMEs) and a vibrant startup scene. Within the EU, Germany is the largest importer as well as exporter of medical devices (source: BMI, German MDR report 2018). All major U.S. suppliers, such as GE Healthcare, Johnson & Johnson; Becton Dickinson; Abbvie; Stryker, Zimmer; 3M, McKesson, Cardinal Health, Henry Schein and Medline, to name a few, have subsidiaries in Germany. U.S. medical device exporters continue to hold a 28-30 percent share of the German import market.

Germany has a strong healthcare system, especially with regards to infrastructure, hospital beds and trained staff. In 2017, there were 497,182 beds in 1,942 hospitals (around 560 public hospitals, 662 non-profit and 720 private hospitals) (source: vdek), 1,142 rehabilitation centers (source: destatis.de), and 19,748 pharmacies. Well-established infrastructure makes the healthcare industry the largest employer in Germany with currently 7.3 million employees, 16.6% of the labor market total. One out of six (Source: BMWi) jobs in Germany is linked to the healthcare sector, which generates $413 billion, or roughly 12% of Germany’s gross natural product; and with $149 million, contributes 8.4 percent to Germany’s export total (source: BMWi). The German medical device market grew by 4.2% in 2018 and is expected to continue with 4-6% growth rates through 2021 (BVMed estimate), as the health economy is digitalized and the 2-digit investment backlog in the hospital market is attacked. Business Monitor even estimates the German medical devices market to grow a CAGR of 7.1% between 2018-2023.

Market Entry and Best Practices

The German market for medical devices is regulated by German and European Union (EU) directives, standards, and safety regulations. The EU Medical Device Regulation (MDR) will take effect on May 26, 2020, with increased testing, certification and compliance requirements. The complementary IVD Regulation will come into effect in May 2022. U.S. exporters are well-advised to become informed about MDR and obtain public or private sector counseling and assistance of the possible impact of their market entry plans into Germany. Companies seeking market entry should also carefully map their distribution strategy depending on their target group(s). CE marking is mandatory for selling into Europe. Entry strategies to be considered are top-down or bottom-up marketing, picking the right partners and ensuring patient- and customer-centric system solutions and support. Most medical equipment imported into Germany is either sold directly through a local subsidiary with a field sales force, through medical distributors with an established distribution network (often on a regional/territorial basis) or through appointed agents or manufacturer representatives. Local representation or market presence is essential when considering differing standards and certifications, warehousing costs, maintenance, accessibility and local marketing/sales preferences/discussions. An agency agreement is often a cost-effective mechanism to enter the market, but under German law - even if the agent’s performance is not satisfactory - it can be difficult and costly to terminate an exclusive arrangement. A representation or distributorship agreement may be more difficult to arrange, but the German associate will, in fact, purchase the product to be sold, thus sharing the market risk. Licensing, partnering with large corporate partners or buying a local firm provide alternatives in times where traditional distributors are bought up by corporates and the market increasingly consolidates. Further information is available in Commerce’s Global Markets Healthcare Team’s annual Healthcare Resource Guide.

Germany hosts the world’s largest annual HCT trade show, MEDICA, making Germany a premier marketplace for U.S. companies to reach their global partners and buyers. The U.S. HCT industry, represented by 500+ U.S. exhibitors, converge every year for the 4-day long MEDICA trade show to sell to Europe and the rest of the world.

The German Medical Equipment Market 2017-2020 (USD billion)

	2017	2018	2019 (proj.)	2020 (proj.)
Market Size	33.8	35.1	37.5	38.2
Local Production	33.8	35.1	37.9	38.7
Imports	23.3	24.2	26.7	28.9
Exports	23.3	24.2	27.1	29.6
Imports from the U.S.	6.8	7.3	8.0	8.6

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: Spectaris Trade Association; BVMED Trade Association; Eucomed; Statista (German Federal Statistics Office)

General statistics on Germany is available https://www.destatis.de/EN/Homepage.html . This information is published by the German Federal Statistics Office.

Leading Sub-Sectors

Leading HCT sectors include: Health IT, pharmaceuticals, dental products, and biotechnology.

Health IT: The period 2019-2021 will be decisive for Germany to catch up to its EU neighbors on digitalization and electronic patient records and medication management. This should present excellent opportunities for U.S. healthIT providers. HealthIT applications currently represent more than $320 million, with numerous projects throughout Germany and a University Hospital excellency network which drives innovation in key diseases such as stroke, Alzheimer’s, cancer and diabetes. An ageing society (with significant share of chronic disease), rollout of e-health patient portals by public health plan providers and high Internet and mobile phone penetration, make Germany a strong healthIT market and offers valuable potential to specialty solution providers. From 2014 to 2017, revenue in German m-health increased by CAGR 22% (Source: GTAI) and the 2-digit growth is expected to continue.

Germany has an excellent base for healthIT, with over 80 percent of its workforce holding a degree and being a startup-friendly environment. This makes it a very strong market for m-health and e-health products and services. The strong German medical technology clusters develop telehealth and telemedicine solutions and form excellency clusters for oncology, neurological disorders, and chronic disease management in cooperation with hospitals and industry. The German government’s medical informatics initiative aims at improving medical R&D and patient care through innovative IT solutions for specific applications and integrated health data centers. The multi-million-dollar funding resource should pose excellent opportunities for U.S. solutions providers. E-procurement and e-commerce, Machine-to Machine communication (M2M), mHealth/apps and big data applications are areas of digitalization, in addition to telehealth and telemedicine, with windows of opportunity for U.S. suppliers.

Pharmaceuticals: The German pharmaceutical market was valued at USD 60.5 billion in 2017 and remains one of the most attractive worldwide over the coming years. According to a report by GlobalData, the German pharmaceutical market is expected to grow to 67.3 billion EUR by 2021. Major growth drivers are the aging population and chronic diseases. It is regarded as a test market for other EU countries for pricing and distribution. In 2017, the German pharmaceutical industry manufactured products worth EUR 30.6 billion, an increase of 4.7% over the previous year. Exports of pharmaceuticals increased by 6.8%, generating sales of $88.9 billion, while imports were up by 8% to $62.2 billion in the same period.

Medical Biotechnology: Germany is Europe’s largest biotechnology market. In 2017, 646 dedicated biotechnology companies generated a turnover of $4.6 billion, and initial estimates for 2018 put the turnover at USD 4.8 billion. R&D spending in the same timeframe registered $1.2 billion. Growth sectors in Germany’s biotech industry remain unchanged and continue to focus on new drug development and diagnostics, such as early disease detection.  More than half of Germany’s red biotech companies are in the preclinical stage. Sales of biopharmaceuticals in Germany increased to $11.5 billion in 2017, a growth of 10.3% compared to 2016. Growth was seen in nearly all fields of application, particularly in drugs treating immunological (e.g. rheumatic) diseases and cancer. In-vitro diagnostics are an important growth driver in the market, with more than two-third of all clinical diagnoses being made through IVDs.  With more than $2.3 billion in annual revenue, Germany represents the largest IVD market in Europe and second worldwide, behind the USA. Germany’s biotech clusters (aka “BioRegions”) are Europe’s leading research and development hubs, and important partners for industry/academic R&D and technology transfer. Biotech is strong in Bavaria, North Rhine-Westphalia, Baden-Wuerttemberg and the Berlin Brandenburg region.  Some of the largest and most reputed clusters are in the Rhine-Neckar Triangle (Heidelberg), Cologne/Dusseldorf, Berlin/Brandenburg and Munich. Biotech is a priority for EU and German Governments and is central to Germany’s economic and innovation policy. Biotech action plans focus on diagnostics, therapy and preventive medicine in (bio) medical research and care, and research-based medical technologies in specialized clusters. Germany’s participation at BioEurope, and in the world’s leading annual biotech event BIO in the U.S., is of great importance to both sides.

Dental products: U.S. exports to Germany amounted to $112 million for dental equipment and supplies, and $49 million for dental laboratory products in 2017. Germany has the biggest dental market in Europe valued at $13.1 billion. Over 200 companies are actively exporting, with heavyweights Henry Schein, Danaher Corp. and Dentsply holding major market share. Germany is Europe’s largest market for dental equipment. Total sales of dental products from 200 VDDI member companies, which employ more than 20,700 people, amounted to $6 billion (+5%) in 2017. The major U.S. dental technology supplier Henry Schein has a subsidiary in Germany and is one of the largest distributors in in the German dental market, with annual sales of more than $123 million and an estimated 10% market share. Many U.S. dental technology exporters consider the German market the “test lab” for Europe and make it the first stop for European rollout. Germany hosts the world’s largest biennial dental trade show, IDS, making Germany a premier marketplace for U.S. companies to reach their global partners and buyers. The U.S. dental industry, represented by 200+ U.S. exhibitors, converge every second year for the 4-day long IDS trade show to sell to Europe and the rest of the world. The 2018-2023 CAGR market growth is estimated at 5.8% by BMI research.

Policy Objectives and Challenges

The Commercial Service will work with the local MED cluster and their members to evaluate the broad impact of EU and German trade policies such as the MDR or the SPC-Supplementary Protection Certificate for manufacturing pharma on companies in the HCT and Life Sciences sector, with a particular focus on SMEs. We will report major procurement deals and opportunities to U.S. businesses and encourage a positive outlook on transatlantic trade among industry contacts we meet at events and in the context of partner search outreach. We plan to organize an International Patient Day event in the Spring of 2020 to raise awareness for innovation-based U.S. patient care solutions. We will closely monitor the impact of the EU’s new medical devices directive and its challenges for U.S. exporters to Germany.

We will follow the latest healthcare policy developments and discussions in Germany, and work with U.S. associations, such as the Advanced Medical Technology Association and PhRMA-Pharmaceutical Research-based Manufacturers Association based in Washington to ensure fair access, standards interoperability and IP protection for U.S. firms to and in the German and European markets.

Opportunities

Germany’s healthcare market offers more than just agents and distributors; it has various opportunities along the value supply chain route: design and research and development collaboration; strategic partnerships; equity partner and investor engagements; mergers and acquisitions; project collaboration, and other types of opportunities for SMEs to grow business and expand in the market. For example, one of Germany’s lead biotech cluster and the U.S. National Cancer Institute recently partnered on a webinar to promote the NIH’s Cancer Institute’s clinical study capabilities and resources for innovative German life science startups. Combining the resources of NIH and the networks of the German life science clusters, we will see a unique and powerful partnership that will bring the most innovative and brightest solutions to the U.S. market, and help both economies to grow and create jobs.

The German government’s health informatics funding initiative and the German states’ initiatives on healthcare digitization offer prime opportunities for U.S. firms to engage in Germany. An example would be a procurement for NRW Public Hospitals to re-organize their system and reconstruct and upgrade existing facilities. In a four-year span, U.S. companies will have the opportunity to participate in consortia or as sub-contractors.

The German Government is jump-starting a “Medical Informatics” funding scheme as part of the Health Research Framework Program. In an aging society where diseases like cancer, dementia and various cardiovascular, metabolic and muscular ailments will become more prevalent, it is important to improve the exchange of data across different institutions and locations. The aim is that faster diagnoses and treatments will help to cut costs and help individuals receive faster and more precise care.

For more information on procurements you can get involved in, please contact us via www.export.gov/germany/contact to be added to a regular email of tender opportunities, or visit http://ted.europa.eu/TED/main/HomePage.do

Web Resources

Trade Events

Local Associations

BVMED

ZVEI Health Pages

Spectaris

DKGEV

BVITG

BiM

Government Links

Private provider for tender information

Government Health Plans:

International Federation of Health Plans

Association of Public Health Plan Providers

ICT

Overview

	2015	2016	2017	2018	2019 (Estimated)
Total Local Production	174.8	174.6	182.2	196.0	191.5
Total Exports	37.7	39.4	43.0	43.0	n/a
Total Imports	64.0	64.5	71.8	68.8	n/a
Imports from the U.S.	1.9	2.2	2.4	2.4	n/a
Total Market Size	201.1	199.7	211.0	221.8	n/a
Exchange Rates	1.1095	1.1069	1.1297	1.1810	1.14

(in Billion USD | total market size = (total local production + imports) – exports)

Germany has one of the largest ICT markets in the world and the single largest software market in Europe with 89,762 IT companies, 945,500 employees and a total market size of USD 221.8 Billion in 2018. There is strong demand for U.S. products and services across all segments. Key players such as Microsoft, Apple, Dell, Adobe, IBM, Oracle and SAP have large market shares. There are also many highly specialized active SME’s in the market. According to the German Association for Information Technology, BITKOM, the subsector market sizes in 2018 (in USD billion) were: IT-hardware 30.2, software 28.8, IT-services 47.1, consumer electronics 11.2, telecommunication devices 12.6 and telecommunication infrastructure 8.3.

Germany hosts several key ICT trade shows, making it a premier marketplace for U.S. companies to reach global partners and buyers. U.S. exhibitors have frequently found buyers from Europe, Middle East, Africa, Asia and Latin America at IFA Berlin, IT-SA, Gamescom or Embedded World.

Policy Objectives and challenges

ICT is a priority sector for the German government. Germany’s economic and innovation policy is outlined in the Digital Agenda of the BMWi (German Federal Economics Ministry). It focuses on digital infrastructure, digital economy, digital workplaces, innovative public administration, digital environments in society, education, research, science, culture and media, security, protection and confidence for society and business.

Policy objectives include cybersecurity, the digitization of the German economy and the expansion of the German broadband network. Challenges include the impact of the EU Digital Single Market, the General Data Protection Regulation (GDPR), the E-privacy Regulation on ICT companies, and the latest cybersecurity policy developments.

The U.S. Commercial Service follows these developments and continues to work with associations and multipliers such as BMWi (German Federal Economics Ministry), BITKOM (Association for Information Technology), BDI (Federation of German Industries), GTAI (Germany Trade and Investment) and AmCham (American Chamber of Commerce) to unearth opportunities and flag policy concerns.

Leading Sub-Sectors

Key segments and topics of interest include Cybersecurity, Internet of Things, Big Data, Health IT, Cloud Computing, Business IT: ERP, Data Centers, Smart Social Business Platforms, Integrated Systems, Virtual & Augmented Reality and Digital Factory.

Opportunities

Web Resources

Trade events

Gamescom

Interactive games and entertainment

Cologne, August 21-24, 2019

IFA Berlin

Consumer electronics and home appliances

Berlin, September 6 – 11, 2019

it-sa

IT security: cloud, mobile & cyber security, data & network security

Nuremberg, October 7-10, 2019

ISE-Europe

AV and integrated system

Amsterdam, February 5-8, 2019

InfoSecurity Europe

Information security

London, June 4-6, 2019

Embedded Word

Embedded Systems

Nuremberg, February 25-27, 2020

AngaCom

Telecommunications

Cologne, June 4-6, 2020

Trade Associations

Bitkom, Federal Association for Information Technology, Telecommunication and New Media

Bitmi, Federal Association for Medium-Sized IT Businesses

Teletrust, IT Security Association Germany

ECO, Association of the Internet Industry

NIFIS, National Initiative for Information- and Internet-Security

German Games Industry Association, Organization that represents the German computer and video games industry

VATM, Association of Telecommunication and Value-Added Service Providers

Government Entities

Federal Office for Information Security, National cyber security authority in Germany

German Regulatory Authority, Ensures compliance with the Telecommunications Act (TKG), Postal Act (PostG) and Energy Act (EnWG) and their respective ordinances

Trade Publications

Computer Woche, Weekly newspaper for CIOs and IT-Managers about computers and information technology

CRN, Computer Reseller News magazine, Channel Partner, Portal for Technology trends, Channel-News and strategic advice for computer retailers, ICT dealers and distributors

EITO, The European IT Observatory, offering reports on the ICT and Consumer Electronics markets in Europe and Internationally

Smart Cities

Overview

Smart cities are committed to sustainable and integrated urban development. Today, cities consume two-thirds of the world’s major resources.

The smart city approach uses information and communication technologies in order to link municipal infrastructures such as energy, buildings, traffic, water and sewage on the basis of integrated development concepts. Digital transformation offers opportunities for moving towards sustainability and promotes resource-friendly, needs-based solutions for meeting the key challenges of urban development.

Digital technologies have already become reality in many areas of life and will continue to change many areas of the economy, administration and urban society.

Germany is actively positioning itself as a lead provider of complete smart technology solutions. In the current 2014-2019 financial framework alone, USD 23.6 billion is available for German cities and municipalities. In addition, there is the multi-billion Horizon 2020 funding to support regional innovation.

Best Prospects for U.S. exports

Building and construction: energy-efficient buildings and modernization, smart homes

Energy: expansion of renewable energy generation, smart grids and distribution, and storage systems

Environmental technology: new solutions for waste recycling and waste-water treatment

Management: digital solutions/IoT for the municipal economy, security for critical infrastructure

Ports: fully automated port where all devices are connected via IoT

Transportation/Logistics: investment in public transport and smart traffic systems, e-mobility

Policy Objectives and Challenges

The major concern is cyber attacks. Unfortunately, most Smart Cities vendors are either unaware of cybersecurity or lack the personnel with the technical know-how to address these issues. Smart Cities need to establish operational centers that are specific not only for purposes of sharing information but also for the counter-checking of vulnerabilities across functions and to establish a contingency response.

Selected Opportunities in the Energy and Transportation sector

Energy: Infrastructure projects grid development

Transportation:

Selected Trade Events

o Chillventa, Nuremberg, October 13-15, 2020

o ISH, Frankfurt, March 22-26, 2021

o E-world of energy and water, Essen, February 11-13, 2020

o Hannover Messe, Hannover, April 20-24, 2020

o IFAT Munich, Munich, May 4-8, 2020

o Smart City Solutions, Stuttgart, Sep 17-19, 2019

o Smart City Expo World Congress Barcelona, November 19-21, 2019

o IAA Frankfurt, Frankfurt, September 12-22, 2019

o Innotrans, Berlin, September 22-25, 2020

o SMM Hamburg, Hamburg, September 8-11, 2020 (smart ports, fully automated ports)

Web Resources

Smart City Charta - Making digital transformation at the local level sustainable

Federal Institute for Research on Building, Urban Affairs and Spatial Development

German Partnership for Sustainable Mobility

GTAI Germany Trade&Invest

German Renewable Energy Federation

Smart Cities Council

dena German Energy Agency

Travel and Tourism

Overview

Travel and tourism is the second-largest export industry in the United States and the largest service sector export. Every 63 visitors to the U.S. will create one new U.S job. For 2019, the National Tourism and Travel Organization (NNTO) forecasts a total of 81 million international visitors to the United States and 2.1 million visitors from Germany, accounting for 2.6 percent of international arrivals. Germany is currently ranked 7th worldwide in terms of visitors per year, making it a profoundly important market for the United States.
 
The majority of German visitors to the United States book their travel through German tour operators and/or travel agencies, thus lending to the protection of German consumer travel protection laws safeguarding their holiday investment. German visitors plan ahead and book early. Typically, they stay longer and spend more money than domestic visitors.

The U.S. Travel Association estimates that spending by international travelers to the United States in 2018 reached USD 256 billion and supported 1.2 million of the 8.9 million American jobs in the tourism industry either directly or indirectly. (This includes passenger fares on U.S. carriers by international travelers to the United States.) In 2017, German visitors to the United States spent a total of USD 8.25 billion (ranked 10th worldwide and 2nd after the UK in Europe).

Leading Sub-Sectors

Leisure travel, business travel, fly-drive and individual packages are the leading sub-sectors for the Travel and Tourism industry. Germany also has an active MICE (meetings, incentives, conferences, and events) industry, however visas can be a limiting factor for U.S. travel.

Opportunities

Promotion

Germany hosts the world’s largest travel show, ITB, making Germany a premier marketplace for U.S. tourism companies to reach their global partners and buyers. VUSA Germany (Visit USA Committee Germany e.V.), together with Brand USA, will promote the Visit the USA brand at 2 major consumer travel shows, 3 trade events, 2 media events, approximately 12 webinars, several networking events and online and in print. In addition, Brand USA will conduct familiarization trips to the U.S. for travel agents, promote their giant screen films on the U.S. National Park Service (as part of its great outdoors theme) and America’s Musical Journeys (as part of its music cultural theme), support culinary tourism events and continue its cooperative advertising campaign with major tour operators. The goal is to attract 2.1 million German visitors to the United States in 2019.

Policy Objectives and Challenges

Policies in the German and European markets for travel to the United States such as flight access, visa waiver, ESTA, immigration issues, and drivers’ license issues could potentially cause challenges.

The Commerial Service will continue to follow the latest policy developments and discussions in Germany, led by trade organizations such as DRV (German Travel Agents and Tour Operator Association) and VUSA (Visit USA Committee Germany e.V.), and monitor travel related media coverage and report these back to NTTO so that U.S. clients are better positioned to maintain the 2.21 million visitor goal from Germany.

Trade Events

Reisen Hamburg

CMT Stuttgart

f.re.e Munich

ITB Berlin

IMEX Frankfurt

Travel Expo & FVW Congress Cologne (B2B fair)

Web Resources

Entry and visa regulations information:

U.S. Embassy and Consulates in Germany

DHS

Other:

Official site of the Visit USA Committee Germany

Brand USA’s consumer website in German

Consumer travel website on United States in German

German landing page for Recreation.Gov