The North Rhine-Westphalia , a federal state located in western Germany, is known for its history traditionally focused on the industry. Indeed, the region always had large resources in terms of raw materials, therefore the region was quickly industrialized. Today, the federal state enjoys a worldwide reputation in the field of the metal working industry, in particular regarding the construction of machine tools and sheet metal machines. What are the factors of this global success? How was this specialization made possible?
Socio-geographical factors
North Rhine Westphalia is Germany ‘s most populous state with its 18 million inhabitants concentrated in a large constellation of interconnected cities. Economically speaking, the state is also the most powerful of all with a GDP reaching € 540 billion and ranking 17th in the world. Geographically, NRW is located at the heart of Europe, which turned the region into an important hub. On another hand, regarding the branch of metallurgy, the region possesses a large concentration of companies of all sizes dedicated to metalworking ( around 600), although there is a higher concentration of SMEs in the Southern region. However, the establishment of SMEs is no coincidence : they allow to facilitate contact with consumers, but also allow some flexibility to implement a wide range of innovation policies that have Germany led to what it is today, namely the leading european country for the construction of industrial machinery, and the main provider of machine tools. This industry is also supported by a large number of technical schools (Fachhochschulen) and institutes heavily involved in local development in the sector, providing a large number of skilled workers and engineers, and secondly in allowing the establishment of research programs.
The opening up to the outside
The metal sector in NRW represents 53.8 % of the companies employing over 20 people. Therefore, it is an industry of a great importance for the German economy, but also one of the branches that exports the most. The region’s main exportations go to the Benelux countries and the Netherlands , exports corresponding to around 1793 billion (all materials included) and 889 billion euros of machines for the metalworking sector. The exports are favoured by the region’s dense transport infrastructure, that allows a quick delivery of the goods. This was made possible thanks to the privileged location of the region, with its common border with Belgium, the Netherlands, France and Luxembourg being both located less than an hour away. Among the most famous brands of industrial machinery produced in North Rhine-Westphalia can be quoted Claas, GEA, Gildemeister and SMS, international brands which have customers located worldwide.
However, following the entry of China in the market for tool machines and sheet metal machinery, the region could face in the future a number of challenges including the maintaining of its SMEs, since competitive prices from China do not allow the region to work locally or to maintain a close relationship with its customers.
