A TALE OF TWO CITIES THAT SHARE SOME BIG CHALLENGES

By WILLIAM TELFORD, Business Editor, Plymouth Herald

William Telford
WHEN The Herald received an invitation to visit Leipzig and learn how a regional centre, once beset by economic decline, had become one of Europe’s leading growth cities, it was simply too good to turn down. The city, in the east of Germany, came out of the Soviet Bloc in the early 1990s in something of a sorry state. With its inefficient industries unable to compete with those in the west, it soon saw unemployment soar to 20 per cent and its population whittled away as youngsters headed west in search of jobs. As a regional city in an area away from the main wealth-generating and industrial centres of the nation, with a declining industry and brain-drain of young talent, Leipzig’s story may appear familiar to businesses in Plymouth and the South West.

But, while the city still has its challenges, its 21st-century story has been one of impressive growth.

Leipzig has transformed itself into one of the few growing cities in Germany and Europe.

From a low of about 430,000 in the post-Communist era, it has boomed to 550,000 people today, with a target to reach 600,000 by 2020.

Investment from the federal and regional governments, and the EU, have been key, with co-operation paramount.

But this isn’t solely responsible for Leipzig’s expansion.

The city has focused on exploiting its location as a historic trade centre, opening the enormous Leipziger Messe (Trade Fair) events and conference centre in the mid-1990s.

It has also seen investment into its airport and railway station, the largest terminus in Germany.

The decision of German motor giant Porsche to open its new factory, and continually expand it, in 2001, was responsible for 4,500 direct and indirect jobs coming to the city.

Leipzig beat 16 other German cities in enticing the firm, and Porsche was soon followed by the arrival of BMW, DHL, Amazon and other companies, attracted by available, and affordable, land and relatively lower salaries.

And the push for growth is continuing as the city aims to chip away at its 10 per cent unemployment rate, upgrade its Cold War legacy buildings and re-balance its economy with more start-ups and high-tech businesses, plus highlight its burgeoning tourist and cultural draw, centred on its architecture, musical and literary heritage, and sport.

It has set up a development agency, Invest Region Leipzig, to attract employers and skilled employees.

And while it faces the challenge of a skills gap, remoteness from the traditional wealth centres in west and south Germany, and a need to make more people aware of its assets – all of which may be familiar to Plymouth and South West businesses – it is confident of overcoming them.

During the next few weeks, The Herald Business section will be revealing some of the methods Leipzig is using to grow its economy.

Some, such as developing creative and high-tech industries and spinning-off businesses from its successful university, will be familiar in Plymouth.

Others – the concept of a regional bank and private equity subsidiary, and a preponderance of business “clusters” – less so.

But, of course, both cities, and the regions they are in, are united in wanting to promote themselves as lifestyle destinations, “cool” places to live, work and raise a family.

 

Read more: http://www.plymouthherald.co.uk/Tale-cities-share-big-challenges/story-21183575-detail/story.html#ixzz33frJhH00

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