The German state of Bavaria is an industrial powerhouse with great innovative capacity in a variety of sectors. At the same time, it’s a rather conservative region in which both the old and the young hang on to their traditions. This curious combination of modernity and tradition may well be a blueprint for the future of Europe.
Bavaria is one the wealthiest German states and is a major exporting region. It is home to the headquarters of, among other firms, BMW, Audi, Siemens, Allianz, Adidas and Amazon Germany. It is also a successful startup region in the fields of IT and biotech. Much of this success can be attributed to the “institutional thickness” in and around state capital Munich (i.e. tens of thousands of FTE in corporate R&D, 13 universities and various government-financed research centers).
Despite the ensuing economic growth and globalization, Bavaria has held on to a strong regional identity.
The state has plenty of soft power vectors: Bavarian beer culture and especially the Oktoberfest, Bayern Munich is one of Europe’s most successful and respected football clubs, the castle of Neuschwanstein is the blueprint to Disney’s fairy-tale castles and also BMW (Bayerische Motoren Werke) can be considered a vector for soft power.
Bavarian post-war politics have been dominated by the CSU, an independent sister to Merkel’s CDU. The party scored mostly absolute majorities in state elections and it is a major conservative factor in German Federal politics as well. CSU leader Seehofer has often protested against Bavaria being a large net contributor to the German Federation and he has confronted Merkel for being too welcoming to refugees.
Munich features consistently in lists of most liveable cities, right behind fellow middle-European cities such as Vienna and Zurich.
Bavaria’s leading position in Germany is somewhat surprising given that Bavaria was a rural area up to the Second World War. Even more so, the limited industrial capability it harbored in Munich was mostly destroyed during the war. Nonetheless, the state fared very well during the post-war Wirtschaftswunder, not in the least because companies such as Siemens moved to Munich to escape Russian rule in Berlin. In the 1990s, the regional government also stepped in to shape an innovation system in which startups in the fields of IT and biotech could thrive.
Despite the ensuing economic growth and globalization, Bavaria has held on to a strong regional identity. It is, for instance, not uncommon to do business while wearing traditional clothing. In part this may be a vulnerability, as outsiders may frown upon such traditions that seem old-fashioned or all too frivolous. At the same time, the Bavarian identity is also closely linked to an image of high quality and reliable products and services.
Interestingly, Bavaria’s success as a startup region has been compared to Silicon Valley. The latter was also a predominantly agricultural society until the 1950s before it became the extremely innovative region we know today. Like Bavaria, Silicon Valley has a strong identity. Only the most enduring frontiersmen made it to California and the region is still characterized by a will to explore and prosper. However, this has also resulted in a rather technocratic and libertarian worldview which thrives among leading tech entrepreneurs. Bavaria’s tech companies, by contrast, are much more rooted in tradition and society. Their output may not be as spectacular and disruptive, but there is a good chance their products are also less disturbing and more in line with today’s norms and values.