Saarland, Germany, diversifies economy in industrial region
Chronic brain drain. Heavy industry that has been in steady decline since the middle of the last century. Attempts to reinvent the regional economy with a slew of initiatives aimed at attracting technology companies.
It sounds like Pittsburgh, but, in fact, it’s Saarland, a German state tucked on the French border that has an economic history that nearly mirrors Pittsburgh’s. But in recent years, Saarland has successfully jump-started technology growth by partnering state-backed universities with existing corporations, allowing it to record growth rates above and unemployment rates below German national averages.
“Pittsburgh and Saarland have similar problems but also have similar strategies,” said Peter Muller, minister president of Saarland. In Saarland, “where heavy industry once dominated, a modern, high-tech location has developed right in the heart of Europe.”
Muller was the keynote speaker Wednesday for a symposium on “Positioning Pittsburgh in the Global Marketplace” at Carnegie Mellon University. He and a contingent of officials and journalists from Saarland — one of 16 federal states in Germany — were in Pittsburgh this week for talks with economic development and university officials.
With a population of 1.1 million, Saarland’s economy during its heavy industry period was based on mining, as opposed to steel. In his first policy statement after being elected minister president in September 1999, Muller said the region needed to change the economic structure by giving support to small and medium-sized companies.
His administration has also worked to gradually replace the mining industry with “trend-setting enterprise from all economic sectors.” Timing helped as well: European integration offered Saarland a central location in Europe, with 50 percent of the European Union’s gross national product generated within a 350-mile radius of Saarbruecken, the capital of Saarland.
“There’s no use to fight structural change. It cost us a lot of money and shows no results,” Muller said. By acknowledging this, “we have been able to build one of the most dynamic regions in Europe.”
Muller said he will report to Saarland companies about the Pittsburgh region early next year, and he will lead an effort to interest those companies in business opportunities in Pittsburgh next May.
Building a high-tech hotbed in Germany is even more difficult than building one in the United States. While Americans will gladly buy German cars with names like Porsche and Mercedes, they’re less likely to accept German software in a Microsoft-dominated world.
In Saarland, the solution has been finding industry niches. In biotechnology, the region’s companies have focused on combining nano-technology with biology and biochemistry. German-trained software engineers, instead of trying to compete toe-to-toe with big, American software companies, have instead focused on designing computer systems for common products, such as automobiles.
But the biggest key to success, officials in the Saarland contingent said, has been a conscious partnership between the region’s established companies and its universities. That partnership has helped companies gain valuable research expertise, while giving German students careers in their native region after they finish school.