Marriage of old and new industry gives Cologne economic diversity

The German city of Cologne has been an important trade and commerce destination since its founding by the Romans nearly 2000 years ago. Today, it sits at the heart of the Rhine-Ruhr metropolitan region, the largest in Germany and home to 11 million people within the state of North-Rhine Westphalia (NRW). A 100 mile-radius from the city’s centre reaches a consumer base of more than 100 million inhabitants, making it an access point to one of the biggest market areas in Europe. At a population of just over one million, Cologne is Germany’s fourth-biggest city after Berlin, Hamburg and Munich.

The city today is more known for events like its vibrant Carnival festival than for its Roman beginnings. Since its reconstruction after the Second World War, Cologne has moved from strength to strength, leveraging its traditional identity as an industrial and manufacturing hub to attract advanced industries and drive its media and finance sectors into the digital age. The University of Cologne, with a student body of 48,000, is one of the largest in the country, and the city’s population is projected to grow by 20% by the year 2040. Known as Germany’s media capital, its mission now is to broadcast to the world what it has to offer.

Making connections

Underpinning Cologne’s capacity as a business destination is its central location and numerous transport links for both passengers and freight. Three international airports sit within less than an hour of the city, with Cologne Bonn airport a mere 12 minute drive from the city centre. Rail infrastructure includes connections to Brussels in less than two hours and Paris in just over three hours. Cologne also hosts Germany’s second largest inland port, Kölner Häfen, which is directly connected to Rotterdam, one of the world’s largest sea ports, via the Rhine.

A large source of investment activity is Cologne Bonn Airport, winner of the Skytrax World Airport award for the last three consecutive years and employer of 13,500 people. It is the fastest-growing in Germany, with passenger numbers increasing 20% each month, expected to hit a record of more than 11.6 million in 2016. Ninety-seven percent of all cargo volume is handled by global logistics companies Fedex and UPS, whose expanded cargo areas in the airport have seen over €400m of investment in the last few years.

“The background is the growth of low-cost carriers like Ryanair and the arrival of the Lufthansa subsidiary, Eurowings, which now offers low-cost long-haul flights from Cologne to Asia, the Caribbean and the US,” says Michael Garvens, Cologne Bonn Airport’s CEO. “Cologne Bonn is the only airport in continental Europe that, with Eurowings, has a low-cost product on long-haul.”

An amalgamation of industries

“Our city has a very varied and dynamic economic structure; Cologne is not dependent on any one single branch of industry, and is so far better able to deal with any economic downturns or crises,” says Cologne’s mayor, Henriette Reker. Indeed, the city is known as both the media and insurance capital of Germany; it also hosts major German and international names in industry and engineering, from auto manufacturers to chemical and pharmaceutical plants.

One third of German TV content is produced in Cologne, home to RTL, Europe’s largest private station, and WDR, continental Europe’s biggest public radio and TV broadcast corporation. One in every 10 city residents is employed by the media sector. Advanced technology is provided by major digital players like Adobe, IBM, Wipro, and Microsoft, the latter of which moved its NRW operations to Cologne in 2008 and employs more than 420 people there. IT companies in the city number over 11,000 and employ 100,000 people, according to Cologne’s Chamber of Commerce and Industry (CCI).  

Cologne also tops German cities for volume of insurance companies, with about 300 companies in banking and insurance and another 5,500 insurance intermediaries. German giants Axa and HDI Gerling are based there, as are Japan’s Mitsui Sumitomo, Zurich Financial Services and Warren Buffet’s Gen Re European headquarters, to name a few.

These all serve to create a rich market for innovative digital start-ups, which the city works hard to support through initiatives like business accelerator Digital Hub Cologne, a platform connecting start-ups to industry. Still behind start-up and banking hubs Berlin and Frankfurt on the international radar, the city knows it must continuously intensify its efforts.     

“Digitalisation will have a key role to play in business and industry in the future and our city is in an excellent position to meet these challenges,” the mayor stresses. Indeed, consulting firm PricewaterhouseCoopers last year declared Cologne to be Germany’s digital capital after having compared all the country’s major urban centres.

Fuelling location development

Still driving its industrial core is Cologne’s auto industry: Ford, Citroen, Mazda, Renault, and Toyota among many others make the city and region a centre for international car manufacturers. In 1930 Ford made Cologne its German headquarters; in 1998 it became its European headquarters. The US automaker employs 20,000 workers, making it the single largest foreign investor in the city.

“One important aspect for a car manufacturer is logistics,” says Ford’s communications office. “The Ford plant in Cologne is located directly next to the river Rhine. About 40% of our daily production is transported by ship, and many Ford suppliers are located close to the plant. Not to forget that the region is a scientific hub with many important universities and research institutions. This guarantees a strong and vibrant network to innovation, research and young talents.”

“There is an enormous spread of economically diverse activities in Cologne,” says Werner Görg, president of the CCI. “The University of Cologne and University of Applied Sciences offer a large research and training potential, and Cologne brings in very good conditions to attract skilled employees.” Cologne also strives to integrate and train its influx of Syrian and other refugees through dedicated language and apprenticeship programs funded by the CCI; so far, 85% of programme entrants have successfully graduated.

Highly-qualified workers in sciences and links to the international pipeline system have also made Cologne attractive for world leaders in chemicals and pharmaceuticals – Bayer, Lanxess and ExxonMobil Chemical are some of the names whose massive buildings dot the city skyline. Experts at industry-specific networks like BioCampus Cologne and ChemCologne foster cutting-edge research to complement the business environment.    

“There is a direct proximity of competitors and numerous industry events in our city,” the president continues. He describes something Germans call the “kleben effect”, or the glue effect. “People come here to study or work, and end up staying,” he explains. “And that’s the big advantage for all the companies and big branches here – they get all the skilled people they need to do business.”

Astronomic aspirations

Germany’s most celebrated astronaut lives in Cologne, and it is not for nothing. Alexander Gerst, International Space Station (ISS) veteran, trained at the European Astronaut Training Centre in the German aeronautics and space research centre (DLR) in Cologne. In 2018, he will become ISS’s first German commander.

Since 1959 Cologne has been home to DLR and since 2003 to the European Aviation Safety Agency. The proximity to logistics links makes this connection obvious; they frequently use Cologne Bonn airport’s infrastructure. Boeing and Airbus run tests in the DLR; it also has research collaborations with DHL, Bayer, and engine maker Deutz AG. General Electric and Rolls Royce have invested €60m into DLR combustion chamber testing for power plants and aeroplane engines.

One of the city’s assets is Koelnmesse, the fifth-largest exhibition centre in the world, which covers 380,000 square metres of space and attracts hundreds of thousands of visitors per year. “Specialist trade fairs such as [food fair] Anuga, Photokina, and digital marketing fair Dmexco make Koelnmesse the number one trading venue globally for 25 branches of business,” Ms Reker says.

The venue is also the site of leading games fair Gamescon, hosted by global gaming giant Electronic Arts (EA), which attracts nearly 350,000 visitors annually. Martin Lorber, PR director at EA, says, “We chose Cologne as it is one of the most important media business hubs in Germany and Europe. You find here the most important broadcasters, media partners, digital agencies, creative people, universities and other parts of the gaming ecosystem.”

The concept of an ecosystem, for all aspects of work and life, is central to Cologne’s marketing pitch. Norbert Strochen, president of the British Chamber of Commerce in Germany, agrees. “I think industry is coming increasingly to Cologne because of the infrastructure,” he says. “You have universities, you have theatre, you have international schools; you need all this to attract people.”

Looking forward, Cologne aims to focus its message to continue raising its profile internationally, as well as develop commercial and living space to prepare for the growth the city will see in coming years. Harnessing this growth properly, and continuing to support young talent and innovative ideas, will prove key to driving that message home.