Why are so many companies expanding in Bavaria right now?
       State Minister Zeil: Despite the worldwide economic crisis, 2008 was another record year for Bavaria in terms of the economy. Companies worldwide continue to seek out Bavaria for its advantageous pro-business location, vast market potential and strong R&D opportunities and capabilities. Our mainstays are automobiles, industrial facilities and equipment, electronics and chemicals. They more than held their own on world markets in 2008, whereas our large and fast-growing environmental technologies, energy engineering and food processing sectors were registering breakthrough successes. Further, we are experiencing the phenomenon of 'backshoring' as a lot of companies relocate their production facilities mainly from eastern European countries – the quality and productivity in Bavaria guarantees a much better value for money ratio than producing in so-called low wage countries. Are more international companies choosing to locate operations and facilities in Bavaria?
       State Minister Zeil: 2008 saw another increase in foreign investment in Bavaria. Our business community is highly international. Traditionally strong investors like American and Japanese companies have continuously invested here. But recently we are also seeing strong interest from BRIC countries and particularly from firms in Central and Eastern Europe. How competitive is the tax structure of Bavaria with other European locations?
       State Minister Zeil: Bavaria as well as Germany offers a highly competitive tax system for companies, combining flexibility and simplicity with moderate tax rates. Due to the Corporate Tax Reform in 2008, Germany has a significantly lower corporate tax burden: The average tax burden dropped from 38.7 percent to 29.8 percent. This includes a 15 percent Corporate Income Tax, 0.83 percent Solidarity Surcharge and 14 percent Trade Tax. What role do colleges and universities play in supporting business growth in Bavaria?
       State Minister Zeil: Bavaria's excellent universities and schools of applied science, as well as the unique system of dual vocational training combining theory with on-the-job training for non-academic professions, ensure the maximum competence of our highly qualified and motivated work force.
      The creation of knowledge leads to the creation of employment. Our task is to realize this transfer process among universities, R&D institutions and companies without any frictional losses. Therefore we started the 'Cluster Initiative Bavaria,' which now has more than 6,000 partner companies. Bavaria has a broad range of world-class industry clusters such as automotive, electrical engineering and electronics and mechanical engineering. The most important 19 clusters – including the above and others such as media, environmental and alternative energy technologies, aerospace and satellite navigation – are part of the Bavarian cluster initiative.
      Another supporting project is 'Bayern Innovativ,' which helps to foster working relationships between the state's business and scientific communities by launching innovation-creating projects. Describe the importance of exports to Bavaria.
       State Minister Zeil: Export activities are like the air we breathe for Bavarian enterprises, as the export quota of Bavarian industry reached a new record volume of 49.3 percent in 2008.
      The figures for the fourth quarter indicated that the world economic crisis has reached Bavaria, too. But Bavaria's exports overall still increased by 1.4 percent and the Bavarian economy thereby reached its 15th export record in a row. Exports to the USA decreased by 8.9 percent in 2008. Nonetheless the USA remained the most important market for products made by Bavarian companies, with a 9.6-percent share in total exports in 2008.
      Exports to the BRIC States showed a very high growth rate in 2008: The exports to China rose by 19.6 percent, to India by 22 percent, to Russia by 17.4 percent and to Brazil by 24.8 percent.
      Our enterprises have an excellent range of products that has been in demand because of its high quality. This structure of the demand will withstand the crisis. What role does your office play in facilitating business growth?
       State Minister Zeil: Invest in Bavaria, the inward investment department of the ministry of economic affairs, serves as a one-stop shop for all the investor's needs. The services of Invest in Bavaria range from the initial steps to set up a business operation and the identification of the optimal location in Bavaria to arranging contacts with relevant partners and networks. It provides interested companies with business data and information on public support and incentive schemes. These comprehensive services as well as the State of Bavaria's 20 representative offices worldwide, including two in the United States, are crucial for attracting foreign investments.