The City of Rostock: Kernel of Innovation in Modern Germany



INSIGHT


  • THE CITY OF ROSTOCK HAS AN ACE UP ITS SLEEVE: ROSTOCK’S PORT IS CONNECTED TO NORTHERN, CENTRAL AND EASTERN EUROPE, THE RUSSIAN FEDERATION, CENTRAL ASIA AND CHINA. EITHER DIRECTLY OR INDIRECTLY. ALTHOUGH ROSTOCK SHIPPING COMPANIES ARE INVOLVED IN TRANSATLANTIC TRADE, THEY ARE FAR LESS DEPENDENT ON IT IN THE LONG TERM. 

  • VERY HIGH QUALITY OF LIFE: ROSTOCK PRESERVES ALL THE ELEMENTS THAT ENSURE QUALITY OF LIFE, SUCH AS PRISTINE HABITATS THAT INVITE THE STRESSED CITY DWELLER TO EXPLORE NATURE, THE SPRAWLING, LUMINOUS BEACHES AND THE LAKESIDE PLAINS.

  • THE CITY HAS MADE THE RIGHT DECISIONS: THE CITY HAS FOCUSED ON MEDICAL RESEARCH, HEALTH AND THE GOOD LIFE. THIS BALANCES OUT THE EXPORT PORTFOLIO, AS ROSTOCK IS ALREADY A LEADER IN THE MARITIME SECTOR.

  • THIS ATTRACTS DIGITAL NOMADS AND HIGH EARNERS. HOME OFFICE IS A BLESSING FOR THE CITY OF ROSTOCK.

  • CHEAPER ENERGY THAN ELSEWHERE: ROSTOCK’S HOME REGION OF MECKLENBURG-WESTERN POMERANIA HAS ACCESS TO CHEAP ENERGY: RENEWABLE ENERGY (LOTS OF WIND POWER AND VERY GOOD GEOTHERMAL POTENTIAL), LNG AND PIPELINE GAS (NORD STREAM 1 AND 2). THIS SUITS THE HIGH-TECH INDUSTRY IN THE ROSTOCK INDUSTRIAL PORT.  

  • YOUNG TALENT: THERE IS A DYNAMIC AND THRIVING START-UP SCENE THAT CONTINUES TO ATTRACT YOUNG TALENT FROM THE BIGGER CITIES. ROSTOCK IS HOME TO THE OLDEST UNIVERSITY IN NORTHERN EUROPE.

  • ROSTOCK IS A TOURISM HOTSPOT AND A MAJOR CRUISE SHIP TERMINAL. THE CITY HAS A SPRAWLING BEACH AND PANORAMIC VIEW ACROSS THE BALTIC SEA. THIS CALMS AND BALMS THE SOUL.

  • ROSTOCK IS THE SEAT OF THE GERMAN NAVY AND NATO BALTIC SEA HEADQUARTERS.



IN ROSTOCK,

WATER IS THE KERNEL OF INNOVATION.

ROSTOCK WAS SHAPED BY WATER,

AND WATER ALWAYS ADAPTS

TO ITS SURROUNDINGS.


1. Rostock sowed the seeds of INNOVATION in the 1990s. 


Rostock is home to a large number of truly innovative companies. The diversity and sparkling creative spirit of these companies are worth highlighting. In the thriving port city radiating across the Baltic Sea, companies cooperate on a broad basis and form networks that increase their clout. This creates fertile ground that produces innovations. It provides a solid foundation and leads to real, deep expertise. These innovative companies make Rostock one of the hotspots for present and future economic growth in Germany. Rostock has hit upon an enduring truth. Industry, business and administration work closely together. This creates a unique environment of exchange between Rostock’s different stakeholders. This ensures that the accumulated knowledge from research flows into commercial realization. All of this facilitates the implementation of new ideas.

This may have been a massive growth spurt for the city. A great many companies have settled in Rostock, fueling Rostock’s stamina for further innovation. Many of these companies are active in the IT industry, but we also see many companies active in the pharmaceutical and medical industries. New networks are forming, brisk trade is the result. 


2. Rostock is ripe for TRADE: We witness the return of the Hanseatic League.


The town’s vigour hails back to a small settlement at the wide mouth of a small river, the Warnow. The wide stretch of the Warnow River from south to north, protected from the rough waters of the Baltic Sea by a wide headland along the Baltic coast, made trade possible. From the deep banks of the Warnow, Rostock entered the trade network of the Baltic Sea region. To this day, Rostock maintains connections that extend across the entire Baltic Sea region. These connections are often better served by sea than by land. The sea routes date back to the Hanseatic period.

First and foremost, Rostock maintains close relations with Denmark, Sweden and Norway. Rostock’s trade networks extend to the Netherlands, but also to Poland, the Baltic States and the Russian Federation. In the south, trade has always run along the dense road network of the former Holy Roman Empire. In today’s Germany, roads and trade routes often run from north to south. All kinds of goods and commodities are traded. The Baltic Sea can be seen not only as a supplement to this trade within the Holy Roman Empire. It served as an economic artery. The Baltic Sea connected thriving cities all along the Baltic Sea basin. Thus, the Baltic Sea helped integrate traditions and trade practices.

The Hanseatic League resurfaced in the 19th century, not as a body politic, but a network of like-minded merchants. Rostock was on the move. Rostock expanded the core of its ancestral domain with the steep growth of transatlantic trade. The merchants stretched their eyes to the horizon and extended trade relations from the Baltic Sea to the wide world. But Rostock’s merchants were particularly skillful, for they always looked both ways, west and east.

Things have indeed changed since the end of the GDR. We have seen the entry of China onto the world stage as a major economic power. Through the New Silk Road, Rostock and the cities along the Baltic Sea are connected to the Silk Road network. Rostock really benefits from its connections to Eastern Europe and the Russian Federation. In addition, Rostock, the Baltic Sea region, and eastern Germany will be connected to the wider Eurasian landmass and Central Asia as more and more sea-based trade routes emerge in the Baltic Sea. And container ships are only one element of what will happen. Railroads will be further optimized for transcontinental trade, further reducing the time it takes to transport goods from Europe to East Asia and back. 

More and more goods are being transported across Eurasia via the Silk Road corridors. One of the problems has always been that many goods were exported from China to Western Europe via Central Asia. Fewer goods were exported from Western Europe to China via Eastern Europe. But gradually things are changing.

The coronavirus pandemic has led to a further increase in trade volumes for Germany; with China. Trade in high-value products traded via the New Silk Road has continued to increase during the pandemic. This is contrary to many geostrategic predictions made by some U.S. geopolitical forecasters. We have not seen a reduction in Germany’s trade relations with the East in the aggregate. Maritime trade in the Baltic Sea basin is flourishing, although trade in the North Atlantic is subdued. Rostock benefits from transcontinental trade, which includes trade in the Baltic Sea region. Of particular importance are Kaliningrad and the Leningradskaja oblast (St. Petersburg region). Both regions have maintained close relations with Mecklenburg-Western Pomerania and the city of Rostock.


3. The blazing spark of ENTREPRENEURSHIP has been ignited.


We have observed that millennials in the US are migrating from large urban centres like San Francisco and New York to medium-sized cities in the interior. The reasons are many, but they all reflect the growing gap between people’s ambitions and their economic opportunities. Reflection may have led to action and prompted Millennials to adjust to economic realities. Some escaped the wildfires that ravaged California last year, resulting not only in a loss of wildlife, but also in compromised health. This happened at a time when people’s immune systems could be compromised by new health threats.

We could see a similar trend in Germany, where Millennials are moving out of big cities and into smaller towns. For many talented young workers, home office (or “flex” office, which can mean coming to a central office location in a larger city once or twice a week and spending a night in a hotel instead of renting an apartment in an expensive city) might be a better deal.

Cities like Rostock that have a high standard of living may benefit more than other cities. They have a higher standard of living overall. The Baltic Sea is right on their doorstep, and the commute to a shared office during the week is much shorter (if you prefer not working at home). A high-class city in a pristine setting may be much more likely to be the ideal for what older Millennials aspire to when they reach the prime earning years of their lives. Talented Millennials may be more open about where they live. This may reflect changing demographics in Germany and Western Europe, where talented workers are scarce and companies prefer to retain good employees but remain flexible about living arrangements.

Starting a business involves lower initial costs, especially in the service sector. This can lead to a concentration of entrepreneurial talent in certain locations. Rostock appears to be one of the places in Germany that is likely to benefit most from this trend. 


4. Rostock has a deeply rooted maritime CHARACTER.


Rostock is a leading light in the maritime domain. Rostock integrates various sectors that all belong to the maritime economy. Rostock’s shipyards produce offshore platforms, the world’s largest cruise ships and agile naval vessels. Offshore mining is an important research focus in the city, and there is also a great deal of expertise in marine research in the city. Other companies focus on maritime shipping, the construction of pipes for large offshore platforms and wind turbines. Rostock occupies a top position in all these areas. 

Rostock’s element is water. It is this passion for the maritime world that shines through in all facets of city life. From seafood restaurants, boulevards and architectural delights, public transportation, the spoken language, university research, sports and sailing events, and companies that operate with partners far beyond the Baltic Sea. 


5. With its dynamic, truly diverse maritime industry and thriving healthcare sector, Rostock offers international investors a unique portfolio for diversification:


Because Rostock benefits from the following trends:


  • ECONOMIC GROWTH IN CENTRAL ASIA AND THE WESTERN PART OF CHINA: Rise of China in the global economy and the revival of the Silk Road (although it must be said that the new Silk Road is much further north and includes Russia).
    The Russian Federation is directly connected to Rostock via the Baltic Sea. It is a short distance. This saves time for rail transport in Kaliningrad and St. Petersburg. Why is it advantageous to send containers through Kaliningrad? If deliveries with container handling are to be made overland between the Russian and Polish borders, it is necessary to switch between the broad-gauge railroad and the gauge commonly used in Western Europe and China. In logistics, time is of the essence. After all, the main advantage of the Silk Road network is that it saves more time than sending high-value products such as car parts across the world through the Suez Canal.

  • A THRIVING, PROSPEROUS MIDDLE CLASS IN CENTRAL AND EASTERN EUROPE: Central Europe, Eastern Europe and the Russian Federation are regions that are experiencing considerable economic growth. Producers in East Germany will also benefit from this.

  • RAPID GROWTH OF THE ELECTRIC VEHICLE INDUSTRY IN EAST GERMANY: East Germany has already become a hub for the electric vehicle industry. Growth is to be expected with the establishment of battery factories and automotive suppliers in East Germany. Rostock can serve this new market with logistics and expertise. 

  • DEMOGRAPHIC SHIFTS AND NEW LIVING ARRANGEMENTS AMONG MILLENIALS: High-income earners from Hamburg and Berlin are looking for livable and scenic, dynamic cities to live in. Many Millenials will start new businesses in Rostock. If employees can work from home or come into the office once or twice a week, why wouldn’t many of them opt for a more pleasant living environment with less commuting? And as digitization increases, people will seek to combine their urban living ideals with greater access to nature. Urban living and healthy lifestyles are two sides of the same coin. They determine which cities remain competitive.

  • DIGITIZATION AND HOME OFFICE: Coronavirus pandemic, home office and increasing digitalization favor Rostock. This makes Rostock more competitive with larger cities.  


Many thanks for the shared interest in the energy world!



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