Why has the automotive company Tesla decided to open a factory in the municipality of Grünheide in the Oder-Spree district, of all places? What impact has this international investment had on Berlin/Brandenburg as an industrial location? And, very importantly: what strategies can be derived from this and other decisions by international investors which might be used to enhance the capital region’s location policy? These are interesting questions that Prof. Dr. Florian Becker-Ritterspach (Faculty 3) and his research assistant Michael Ehring are addressing within the framework of the “RAIBB” project. In this interview, they explain how they are approaching the project and why providing answers isn’t always so easy. The two HTW Berlin academics are cooperating with the Berlin School of Economics and Law (HWR Berlin) on the project, which is being funded by the Institute for Applied Research Berlin (IFAF Berlin).

Prof. Dr. Florian Becker-Ritterspach: In fact, little research related to Berlin and Brandenburg in this regard exists. We know that the capital region has been benefiting from a growing influx of international direct investments for some time now, but is exhibiting below-average performance in terms of economic power when compared with other federal states.  It is important that the levers are known at political level. Is the current funding structure adequate or does it perhaps require modification? Do location factors and regional funding instruments from different federal states interact intelligently? A great deal is being done for start-ups, but no dedicated support for foreign investments or a corresponding strategy currently exists. Although Berlin does have funding offices in Beijing and New York, these are more focussed on start-ups. 

As academics, we naturally also have an interest in research. Our project builds on the trend in the field of international business to move beyond the national level and focus on macro- and micro-regions as a unit of analysis. Global cities are also a popular source of interest and research. This is because these cities often boast an investment climate that differs from the overall national picture. Although Berlin is not yet a global city in the true sense, it already has some relevant characteristics.

We began with a quantitative survey of our colleagues at the  Berlin School of Economics and Law. This included researching which large, international companies have come to Berlin and work or manufacture here, and which have “only” set up their headquarters here because Berlin, as the federal capital, is a good location for lobbying. Results are available, but they still need to be adjusted, i.e. consolidated. In the project, we are interested in those companies whose Berlin location actually generates business activity. We want to analyse some of these qualitatively at HTW Berlin in the form of case studies.

Michael Ehring: We are concentrating our efforts on 15-20 case studies in order to acquaint ourselves with the strategic interests of the companies in more detail. Some have already been confirmed, such as Tesla and Rolls-Royce in Brandenburg and ASLM in Britz/Neukölln, where key components for lithography systems are developed and manufactured. Otis and Alstom are also possible candidates. Others will be added, depending on sales and employee numbers. We always need consolidated figures here, especially for the capital region. We might also add a start-up, a financial technology company or one from the creative sector, which is now quite strong.

Prof. Dr. Becker-Ritterspach: We have already conducted several interviews: with representatives of chambers and associations and various institutions and funding organisations, such as the Economic Development Agency Brandenburg. Establishing contact with companies is somewhat trickier for various reasons. Industry managers naturally have full schedules, and not everyone takes the time to answer academic-style questions. Some people may also be sceptical because internal information could leak out. However, this fear is unjustified; we always guarantee confidentiality.

Michael Ehring: Independently of the findings from bilateral discussions, our study draws on the companies’ annual reports, global rankings, various statistics, press reports, etc..

It is quite easy for international companies to attract highly qualified employees to Berlin. The city is perceived as cosmopolitan and English is widely accepted as a lingua franca. Berlin also scores points as an excellent science location. Although connections to international air traffic are poor, the central location in Europe is favourable, and the proximity to Poland is also a plus point. Bureaucracy is perceived negatively, not only in Berlin, but in Germany in general. There are also many complaints about the slowness in issuing visas.

We are seeking to gain insights into who benefits from international investments, i.e. whether and what exactly they bring to Berlin and Brandenburg economically and socially. We are also focussing on small and medium-sized companies, which ideally benefit from cooperation with foreign investors. And we intend to issue policy recommendations on how to improve the conditions for foreign investment in the capital region. Only a few studies currently shed light on this. We would like to close this gap.