According to insights revealed in a new Gain.pro market report, on average European companies grew by 7% per year, including growth from mergers and acquisitions (M&A), over the last 5 years. Analysing revenue growth by ownership type, VC and PE-backed companies outperformed privately-owned companies by a factor of 2-4x.
Hessen is gearing up for an economic upturn in 2024, with expectations to surpass the national growth average significantly. A recent forecast from Landesbank Hessen-Thüringen projects a robust 1.5% increase in the state’s gross domestic product (GDP), signaling a year of prosperity and expansion for the region. This anticipated growth underpins the resilience and dynamism of Hessen’s economy, even in the face of global economic uncertainties.
In the preceding months, Hessen has already demonstrated economic prowess, eclipsing national performance metrics. The financial sector, invigorated by a favorable interest rate environment, stands as a cornerstone of this economic upswing. Moreover, the region is abuzz with anticipation for the European Football Championship, poised to bring a surge in tourism and hospitality activities, further stimulating the local economy.
Hessen’s distinct industrial composition sets it apart on the national stage. The state is uniquely home to a bustling financial center, a global aviation hub, and a leading trade fair venue—all contributing to its economic vitality. The logistical prowess of the Frankfurt Junction, along with the strategic waterways of the Rhine and Main rivers, establishes Hessen as a critical trade and transport fulcrum in Europe, enhancing its export efficiency and connectivity.
Employment figures are equally promising, with Hessen nearing full employment, indicating a healthy and productive workforce.
The state’s industrial sectors, notably manufacturing, chemicals, pharmaceuticals, metals, and automotive, are significant economic contributors. A high export quotient, particularly pronounced in the chemical and pharmaceutical sectors, underscores the global competitiveness and demand for Hessen’s industrial outputs. Such economic indicators are not just reflective of the current state but are predictive of a continuing trend of industrial robustness and innovation.
Employment figures are equally promising, with Hessen nearing full employment, indicating a healthy and productive workforce. The state’s economic strategy, characterized by prudent fiscal management and below-average debt levels, assures a stable and conducive environment for business and investment, further bolstering its economic outlook.
Drilling down into specific growth industries, Hessen’s pharmaceutical and chemical sectors remain at the forefront, driven by continuous innovation and a strong export market. Financial services, particularly in Frankfurt, are expected to see sustained growth, backed by the city’s international reputation as a financial epicenter. The burgeoning field of information and communication technology also stands out, leveraging Hessen’s advanced infrastructure and skilled talent pool. Moreover, the automotive industry is navigating a transformative era, with a significant pivot towards electric vehicles and sustainable technologies.
Hessen’s strategic industry mix, geographical advantages, and sound fiscal health are key narratives in its economic story for 2024. The state is not merely on a path to maintain its economic momentum; it is strategically positioned to explore new growth avenues and set standards in regional economic development. As the world watches, Hessen is preparing to turn economic forecasts into tangible prosperity, ensuring its place as a leader in innovation, stability, and growth within Germany and on the international stage.
SEZs are business parks granted legal autonomy to improve their governance. Companies operating within SEZs enjoy unique tax breaks, streamlined government regulations, special VISA rights and different labor laws. This enables businesses to operate in emerging markets without the usual problems that businesses in the developed world face.
Understandably, SEZs have become increasingly popular among emerging market investors. In 1979, there were 200 SEZs. Now, there are more than 12,000. Governments are spending ever-larger amounts of money on SEZs in an attempt to cash in – the Saudi Arabian sovereign wealth fund plans to invest $500 billion USD in NEOM, a planned city-sized SEZ. China plans on spending $2 trillion USD on its Belt and Road Initiative, which includes several hundred overseas SEZs.
When SEZs work, they produce economic miracles. They played a major role in the rise of international cities such as Shenzhen and Dubai;
SEZs have also rehabilitated traditionally bad investment destinations, creating bastions of economic growth in unlikely locations. The most well-known case studies of this come from China. During the 1980s, the Chinese government adopted free market reforms in 14 coastal city-scale SEZs. These cities became hotbeds of foreign direct investment. The most famous SEZs in China were Shanghai’s Pudong District, the city of Shenzhen, and the Suzhou Industrial Park. Later, when they rejoined China, Hong Kong and Macau also became SEZs.
Less famously, Colombia similarly used SEZs to reinvent its economy. China took a “bigger is better approach,” designating entire cities as SEZs. Colombia, on the other hand, had a “smaller is beautiful” approach, instead focusing on lean private sector business parks. After decades of civil war, Colombia needed to re-invent its economy. In 1994, Colombia passed legislation that allowed qualifying property owners to designate properties as SEZs. Businesses in the SEZs enjoyed significant tax breaks, streamlined import / export regulations, and exemptions from many burdensome government business regulations. Now, SEZs account for 35% of Colombia’s foreign direct investment. The companies that manage Colombia’s SEZs have become some of the most profitable businesses in Colombia.
Even North Korea is starting to implement SEZs to revitalize its economy. There, South Korean companies in Pyongyang’s economic zone generate more than $2 billion USD in economic activity per year in North Korea, and pay significantly higher wages than the rest of the country. South Korean economists surmise that North Korean SEZs are a critical part of the continued survival of the regime.
We can’t be sure whether SEZs in unlikely destinations like North Korea will be successful. Most attempts at creating SEZs fail. Empty industrial parks in countries such as South Africa, Nepal, and Serbia can all attest to this.
When it comes to business, we live in a global village, but the shifting sands of geopolitical interest do not always recognise this. Political alliances and trading blocs – while designed to protect and benefit those within the clubs – also inevitably serve to put up barriers.
In the investment migration arena, blanket restrictions on free movement of peoples can deny many forward-thinking ambitious jurisdictions the opportunity to draw in talent and innovation into priority areas, since they are bound by a forcefield of red tape over which they exercise little control. It also prevents well-meaning entrepreneurial-minded folk disadvantaged by an accident of birth from setting up shop in a business-friendly location.
Boasting excellent international air links to major commercial centres, this small but mighty country punches well above its weight
