2004 International Study Mision to Munich – Trip Report

Lederhosen and Laptops: “I learned things I didn’t know I cared about”

2004 International Study Mission to Munich, Germany

May 7 – 14, 2004


Executive Summary
Cliffs Notes: Lessons Learned

The Trade Alliance and Greater Seattle Chamber think of the International Study Missions as a “Traveling University” studying what it takes to be a competitive region in a world economy. In the grand tradition of American education, we begin with the Cliffs Notes of the Munich Trip Report-a brief outline of the lessons learned by the more than 60 delegates who traveled to Munich and the Bavaria region from May 7 – 15, 2004. Unlike some other schools, the only test here will be how the Puget Sound region uses these lessons and how the region is improved as a result of them.

Lessons Learned
Delegates saw first-hand how Munich recognizes that the basis of success for their city is the metropolitan region’s economy being successful. Munich, like Seattle, does not have the governmental structures to make regional cooperation easy but they have taken the first important step: recognizing the importance of regional cooperation. Munich has made building stronger metropolitan institutions one of its top priorities.

Munich, like other cities and regions we have studied on these trips, thinks strategically. They develop strategic plans for urban and economic development that look down the road for many years. The city has dubbed its strategy, “The Munich Perspective.”

Promoting a healthy economy is a top priority for Munich officials. It is central to the strategic plan. The delegation heard from many business speakers that the Munich government works hard to create a friendly climate for businesses.

Munich works to be and promotes itself as a “City of Knowledge.” As Munich’s “City of Knowledge” brochure says, “Knowledge is proving increasingly to be the key resources in global competition.” Delegates saw how hard Munich and the Bavarian Government work to support its institutes of higher learning, its non-university research organizations and its numerous professional academies and vocational colleges.

From the moment delegates arrived at their hotel they experienced the convenience and importance of a mature multi-modal transportation system. Located near tram and U-Bahn stops as well as bus lines, the hotel is located in one of the premiere transit developments in Europe.

Like Puget Sound, Munich enjoys a high quality of life combining great natural beauty and urban culture and arts. Munich actively promotes its quality of life in attracting business, trade, investment and tourism. It also uses its quality of life to attract talented people in arts, science and business.

Germany’s health care system leaves virtually no citizen without health insurance. Delegates studied the system and the stresses Germany’s aging demographics is placing on the system.

Greater Munich and Greater Seattle are high cost regions in high cost countries. Delegates witnessed Munich’s recognition of this and the corollary recognition that this meant they had to think strategically and implement strategic plans in order to remain competitive.

As in other regions visited on International Study Missions, Munich uses big events to create deadlines for infrastructure and other civic improvements.

Follow up from the trip
The Fraunhofer Institute, Germany’s applied sciences research institute, does not have a presence in the U.S. west. Fraunhofer does have a joint program with three universities in the east. Exploration of a relationship with Fraunhofer by the University of Washington, a research organization such as the Institute for Systems Biology or another university would add to our region’s prestige.

Munich has an annual newcomers festival bringing together all the new residents to the city. Seattle is already exploring doing something similar here. Other cities throughout the Pierce, King, Snohomish county region might also want to explore this idea.

Every other year, a German city hosts one of the largest garden shows in the world. Munich is hosting the 2005 show. The City of Munich was encouraged to have a booth at Seattle’s annual garden show.

The Goethe Institut, an organization committed to fostering German culture and awareness, co-hosted a dinner one evening with the Boeing Company. There is potential for the institute to send a German group for an event at the Seattle Children’s Museum or a project with the Seattle International Children’s Festival.

The head of BMW is a Microsoft board member. One of the morning programs during the mission was hosted by BMW and focused on sustainability. The BMW representatives suggested that their head might be willing to give a talk on one of his trips to this region. Manfred Heller, corporate environmental director for BMW, who spoke to the delegation, might also be interested in speaking here.

The City of Munich is considering bringing a delegation to Seattle for either a study or trade mission in the near future.

The head of Siemens will be invited to come to our region to talk with our business community and explore further Siemens’ efforts in the region.

Munich Technical University expressed an interest in establishing a relationship in the Puget Sound area.

Relationships with Munich’s film industry and the Seattle International Film Festival are a possibility.

Joni Earl, CEO of Sound Transit invited Gunnar Heipp, VB-SP. Bereichsleiter
Strategische Planungsprojekte/Strategic Planning Projects to come to our region.

In 1158, the Duke of Saxony founded Munich as a regional marketplace. Over the next 856 years, Munich witnessed wars and pestilence, grand buildings built, destroyed and then built again. Today, Munich is a regional economy competing in the marketplace of the world. It is also where more than 60 civic leaders from throughout the Greater Seattle region-from Pierce County through King to Snohomish-traveled for the 2004 International Study Mission organized by the Trade Alliance and Greater Seattle Chamber of Commerce.

From the moment delegates arrived on what was a typical Pacific Northwest cool rainy day displaced to Munich, delegates could learn from both the similarities of Munich and Seattle-rain, for instance, not to mention a great quality of life and high tech economy-and the differences-subway and tram service right outside their hotel. This is why the Chamber and Trade Alliance organize these annual trips and why so many civic leaders take time out of their busy schedules to travel on a long flight and spend a week working from early morning meetings to late night work dinners-a recognition that we can learn from other cities throughout the nation and the world to improve the Puget Sound region. The theme of this trip as with the other 11 international study missions that have taken place over the years is “A Competitive Region in a World Economy.”

Munich has seen successes and challenges in competing in the world economy as our little rotating globe shrinks via communications and transportation technology. During a week of intensive meetings, discussions among delegates on bus rides and chats at meals, the group of Greater Seattleites saw first-hand these successes and challenges. In many of the challenges Munich faces, delegates felt as if they were looking in the mirror. When a Munich businessman addressed the delegation and lamented it could take up to 18 months to get a building permit, delegates could, as a president once famously said, “feel his pain.”

City comparisons – Munich and Seattle

Munich* Seattle**
City Area 119.9 sq mi 84 sq mi
Population 1,321,557 571,900
Population Density 11,022 per sq mi 6,808 per sq mi

*Source: Bavarian Ministry for Economic Affairs, Transport & Technology
**Source: Greater Seattle Datasheet, 2004

State Comparisons – Bavaria and Washington

Bavaria* Washington**
Land Area 43,739 sq mi 66,581 sq mi
Population 12,278,000 5,894,121
Population Density 280.7 per sq mi 88.5 per sq mi

But in facing the challenges of competing in a world economy, delegates were particularly impressed by Munich’s conscious attempts to come together as one encompassing region to solve problems and to create a healthy region, whether in the urban cores or in the outlying areas. Munich is located in the state of Bavaria. The city itself has a population of 1.2 million people but the Munich region in Bavaria consists of more than 180 municipalities and eight counties. Dr Stephan Schott, in charge of regional cooperation for the city of Munich, joked at the beginning of his comments to the group that he knows Seattle officials talk about how they have to work with so many different jurisdictions but that “I would be glad to trade with you positions.” And yet Dr. Schott and the other officials work hard to achieve regional cooperation.

In thinking of themselves as one economic region, in working together as one economic region, the leaders in Bavaria do not leave their future to chance but instead plan strategically for the future. In fact, the leadership of the city has created and implemented an economic strategic plan. The city plan calls for strengthening regional cooperation. Delegates on past trips noted that most of the cities studied have strategic plans that do not sit on the shelf of some bureaucrat’s offices but are actively used to guide decision making. Delegates met with leaders in charge of Munich’s strategic plan at a time when the Puget Sound Regional Council is creating and preparing to implement such a plan for our region.

Seattle and Munich have advantages when planning strategically for the future-both have as an asset a beautiful natural surrounding and great urban culture. Mountains, lakes, skiing, arts and culture-both regions lay claim to a great quality of life. Delegates saw how Munich actively worked to leverage these assets to their economic advantage. At the same time, both the Munich and Greater Seattle regions are high cost cities in high cost countries. To compete in a more globally competitive world, regions must think strategically, develop multi-year plans and implement them.

Munich and Seattle are also similar in that both have high tech economies and are regarded as “knowledge” centers. Speaker after speaker in Munich told the delegation how crucial their universities and research centers were to creating this high tech, knowledge-based economy. Visions of the University of Washington, the Fred Hutchinson Center and Puget Sound research centers danced in delegates heads when listening to the Munich speakers.

In fact, three different Munich speakers noted that the great lures of Munich for businesses and talented creative people to locate there are 1) the universities and research organizations; 2) the quality of life; and 3) a welcoming political environment. The latter, of course, is due to the region working together and actively planning for the long-term to make Munich a great place to live, work and invest. This trip report will examine Munich’s approach to these three lures, the delegation’s reaction to them, and concrete steps coming out of the mission to take advantage of what was learned and relationships developed.

Regional Cooperation: Metro Economy is Basis for Success
The regional cooperation proponent looked out at the audience and said, “The other municipalities live in fear of being dominated by the largest city in the region.” Any one of the delegates on the International Study Mission could have said it but in fact it was Munich’s main city official for regional cooperation who spoke these words. Dr. Stephen Schott with the Department of Urban Planning and Building Regulations for the City of Munich spoke to the delegation Tuesday afternoon. He observed that towns such as Augsburg worry people only know Munich just as towns in Puget Sound worry about Seattle overshadowing them. He also noted that the big name city is the lure attracting international attention throughout a region.

Schott works with the other 185 municipalities and 8 counties making up the Bavarian region. He joked at the beginning of his comments that he knows Seattle officials talk about how they have to work with so many different jurisdictions but that “I would be glad to trade with you positions. We have it even worse-so many partners.” Schott pointed out that many of the other 185 municipalities are smaller and do not have the staff to designate one person to regional cooperation issues. This means Schott often meets with the mayors themselves but these Mayors want to meet with the Mayor of Munich. In Germany as in the United States, Schott pointed out, there are but 24 hours in a day.

It was instructive to delegates to see that other regions around the world have to work hard to achieve cooperation. King County Council Member David Irons noted during the Friday delegate debriefing session-a meeting on the last day of the trip when delegates gather together to give their impressions, thoughts and ideas-that while the Munich region, like Greater Seattle, is complicated, “they don’t have the same factionalism between city and rural areas and amongst other jurisdictions that we do. We haven’t yet come together as a region.”

Numerous delegates during the Friday wrap-up session talked of the need for the region to work together-that we are one economic unit competing in the global economy. It was obvious during the week that Munich realizes that its competitive success is based upon the metropolitan economy. Munich is the brand name for a metropolitan area of 2.2 million people; the city and region’s success requires a metropolitan strategy and metropolitan infrastructure that works.

The day before delegates learned about the Munich Perspective, a strategic urban development plan the city of Munich develops and revisits during the years. It was recently updated again because as the plan says, “In the 1990s, new questions have arisen. Especially the global changes…” Urban regions the world over are working to stay competitive in a shrinking, increasingly interconnected world. In Munich, they don’t leave their competitiveness to chance but instead strategically plan for the future.

Schott pointed out the second guideline of the Munich Perspective Strategy is “Improvement of cooperation in the region – reinforcement of the competitiveness on the economic region.” A number of delegates noted that the strategic plan found the issue of regional cooperation so important it was one of seven guidelines in the strategy. Executive Director of the Puget Sound Regional Council Bob Drewel, who hosted the session with Schott, pointed out Seattle is about to launch its own Regional Economic Strategic Plan with the understanding of how important regionalism is. “The Regional Economic Strategy is founded on the belief that the central Puget Sound metropolis is one great region, with one economic future.”

The Munich region has a Regional Planning Association (RPA). By law, all municipalites and counties are members of the RPA. The regional plan that is created is binding on its members. One unintended consequence of this, however, Schott points out, is that often the guidelines are very general so that areas aren’t bound to anything specific. But the plan does try to designate “green areas,” parts of the city appropriate for development and other “spatial development” issues. Schott and other speakers from Munich stressed to the delegation the importance of working together as a region. Like Greater Seattle, however, the governmental structures make working together as a cohesive region difficult. However, Munich has taken the first step towards bringing the region together by recognizing how important it is to do so.

Perhaps one factor helping the leaders think and work as a region is “Bavarian Pride.” One of the speakers the delegation heard from was Robert Wilson, a partner with Fulbright and Jaworski Law Firm headquarted in Houston, Texas. Wilson came to Munich two years ago to set up the firm’s Munich office. Bavaria, Wilson said, is very proud of its quality of life and heritage. They just assume people would want to live here like they enjoy living in Bavaria and Munich. Wilson lived in Houston for years (he’s from the cornfields of Iowa originally) before moving to Munich to open up the Munich office for his law firm. When he moved to Texas people told him, “you’re not a Texan but you got here as soon as you could.” Bavarians think the same way, he said.

At the Friday wrap, one of the delegates also noted the pride Munichians take in their region. He said it appears too often such pride is missing in Greater Seattle. “We have a great story to tell in Greater Seattle and we should tell it,” he said.

Planning Strategically
A common thread found in all the cities visited over the years on international study missions is the priority placed on strategic planning by regions. These regions successfully competing in the global economy create strategic plans for their economies and urban development. These are not short term plans but long-term, taking a multi-year view towards development. Of course, not only do they plan but they implement the plans. In this respect, Munich is no exception.

In 1998, the city of Munich created “The Munich Perspective”-a comprehensive strategic plan for urban and economic development for the city. As we saw above, “Regional Cooperation” is one of the seven overarching guidelines driving the city’s strategy. The seven guidelines are:

· Maintaining and promoting employment and economic prosperity
· Improved regional cooperation – reinforcing the region’s competitive credentials
· Community policies which ensure social harmony
· Neighborhood development to reinforce local identities
· Developing sustainable settlement by upgrading the present urban fabric
· Preserving the face of Munich – encouraging new architecture
· Enhanced mobility for all modes of transport – traffic engineering for sustainable urban quality

Improving the economy is the first item on the list. A number of speakers to the delegation noted the welcoming atmosphere the Munich government provides for talented people and businesses. Jan Bielicki, city editor for the newspaper Suddeutsche Zeitung, addressed the topic “How Munich Works.” Bielicki said at first glance one may think Munich does not work at all seeing people out in the cafes, shopping, sailing, windsurfing, skiing or just having a local ale at a beer garden. But, in fact, Munich leads the way in the German economy. Munich has the highest GDP per capita of any city in Germany and the lowest unemployment.

The city actively plans to create a hospitable environment in which to locate a business. The transportation system plays a big part in this. It wasn’t always that way. As delegate Joni Earl, Chief Executive Officer of Sound Transit, said, “Seattle today is much like the Munich of 30 years ago.” But today, the city offers a mature public transportation system of buses, trains and trams. Like many of the cities visited on these international study missions, Munich has used or created big events to push forward with infrastructure projects and other initiatives. It was in preparation of the 1972 Olympics that Munich opened its U-Bahn (subway) and S-Bahn (commuter rail) networks to complement the region’s system of trams and buses.

From the moment delegates arrived at the Arabella Sheraton Hotel, the impact of the transportation system on the city was obvious. The Arabella area of Munich is recognized as one of the best transit-related developments in Europe. Delegates immediately began exploring the city with ease, walking a few minutes to both tram and U-Bahn stops. Delegates were also impressed by the extensive bike lanes found throughout the city.

Transportation was a big topic on the first full day of meetings. Walter Buser with Munich’s Urban Planning Department was asked about the role of a good multi-modal transit system to Munich’s economic success over the last two decades. He said he has traveled to lots of cities both within and out of Germany that did not have rail systems. “It is a big problem for those cities and a big barrier to success,” he said. “Munich could not have been successful without our system.” In fact, Munich is recognized as having the third-best transportation system in Europe.

One of the leaders of the delegation, John Rindlaub, CEO of the Pacific Northwest Region of Wells Fargo Bank, noted “how hard they work here to achieve things,” even as he observed they have to work hard to stay in place because of the structural disadvantages and increased competition the city faces. Munich has used other big events in addition to the Olympics to push its region forward.

The city is preparing to host the BundesGartenSchau this summer. Essentially the national garden show of Germany, Munich is building the BundesGartenSchau on a huge expanse of property near the old airport. The garden show itself will run through October, 2005, but Munich is not building the show grounds as a one time event. After the BundesGartenSchau ends, the grounds will become a new park for the city. One follow up to the Study Mission is inviting Munich to have a booth or exhibit at the Northwest Garden and Flower Show.
The old airport is also now the site of the Munich Trade Fair Center. Easily able to host the largest of shows with its 500,000 square meters of space, the Munich Trade Fair Center hosts 40 major trade fairs each year. Bob Drewel, executive director of the Puget Sound Regional Council moderated a discussion with a variety of speakers at the Trade Fair complex, including Mr. Klaus Dittrich, managing director of Messe Munchen Internatioal, the corporation running the Trade Fair Center. Dittrich noted that “organizing shows is not enough, we organize communication.” This is especially true of the many high tech trade shows that come to the center in Munich. Karen Wong, chair of the International Committee of the Washington State Convention and Trade Center and Anias Winant, vice president of the Public Affairs Division of Seattle’s Convention and Visitors Bureau, had additional meetings with Munich tourism and convention officials.

Another startling feature of the Trade Center is that it has the largest roof top solar energy system in the world. The solar energy system not only generates enough power for the center but the excess is sold for profit.

Munich looks at the Trade Center as more than a tool to fill up hotels and earn money from conventions. They also recognize the important links and relationships that are made by bringing in large international conferences. Business people, government officials and professionals from other countries get to know Munich and make contacts in the region while attending conferences. This often leads to more business, relationships and trade down the line. In other words, the city views attracting international conferences not just as a revenue generator but also as a strategy to develop Munich’s international relationships.

Study mission delegates discussed the benefits of bringing conventions to the various convention centers located in the Puget Sound region. The argument for these conventions is they fill up hotels and the coffers of shops and restaurants. All true, but as Munich has seen, there is a long-range benefit as well. The Trade Alliance works in this way on outbound missions and with delegations that visit the city. Once a person establishes a connection with a region, the potential for business and a future relationship grows.

The strategic planning of the city-the Munich Perspective-is a continually evolving active document. At the Friday morning wrap up session, Bob Drewel rolled out the plan for updating the Puget Sound Region’s strategic plan. This is a regional growth, economic and transportation strategy. It’s a strategy for regional, local and personal ways the region can succeed over the long haul. It is coordinated so that all of the pieces of the puzzle can fit together. Drewel said the Regional Strategic Plan “is not about suburban dwellers versus big city people. It’s not about fighting over roads versus transit. It’s about working together with common goals, coordinated and planned growth, and wiser use of all of our resources in a strategy to better ensure success in a challenging and changing environment.” At the Friday morning meeting, John Rindlaub announced Wells Fargo Bank is providing financial support for this regional effort and Bob Watt, vice president of Government and Community Relations at Boeing, announced the aerospace company will be providing $25,000 to the effort.

An actively used strategic plan is a consistent trait of the cities visited over the last ten years. It may be just the ticket for Puget Sound, a region one delegate said “has a civic attention deficit disorder.”

With the Puget Sound Region and the Munich region sharing so many traits in common-a great quality of life and high tech economies, to name just two-it is interesting to see the strategic planning of both regions. Of course, in addition to assets, both regions also face challenges.

Munich, like the rest of Germany, is working to gain more cooperation on labor issues. Two American businessmen-Robert Wilson, a partner at Fulbright & Jaworski Law, and John Phelps, vice president and general manager for National Seminconductor Europe-talked to the delegation about doing business in the city and in Germany at a program moderated by Jeff Sax, Snohomish County Council Member. Although both said Munich is a great place to locate a business they did note that labor issues are a challenge. It can take as long as three years to discharge a worker, one of them noted. And, of course, Germans enjoy six weeks of vacation a year plus numerous holidays. At the same time the two American companies located in Munich in part because of the highly educated workforce.

Both Phelps and Wilson also noted other challenges to doing business in Munich, some of which are endemic to Germany. Phelps said it took him 18 months to get a building permit. The rigid labor laws make it difficult to reduce or change your work force. It took three years in one case for Phelps to discharge an employee and it cost $500,000 to do it. They also noted that demographics can be a challenge with the aging population in Germany. All of Phelps’ managers are 50 years or older and there is a big gap between these managers and the next generation prepared to become managers.

But despite the challenges and because of the many virtues of Munich, both Phelps and Wilson said they are very happy with their decisions to locate in Munich. Wilson noted the pride inhabitants have in their region. Munich works hard to provide a hospitable environment for businesses. In fact, the region conducts a business plan contest helping to encourage new business starts. Delegates learned of this at the Venture Capital and Finance Roundtable. A nonprofit called Munich Network sponsors the competition hoping to “foster long-term development of entrepreneurial culture and start-up networks in the Munich area.”

Munich recognizes that workforce development is a part of any economic strategy. In fact, this is part of the Munich Perspective. The city works to assist neighborhoods, including those not doing as well economically. Delegates visited the Hasenbergl Jobs Center. Hasenbergl, which in English translates to “Rabbit Hill” because it was a former hunting region for Bavarian kings, is known as the city’s “rough” neighborhood. A brief clip of a movie about this neighborhood shown earlier in the day led some delegates to believe that the area was unsafe compared to other parts of the city, but upon arrival it was soon made apparent that the area was just as safe as other neighborhoods. The streets were clean, stores and parks were well-kept and there was a clear pride among the locals. Home to a large population of immigrants, Hasenbergl has a social program known as Junge Arbeit, or Youth Work. The program aims to provide vocational training for young adults in numerous areas such as painting, screen printing, woodworking and restaurant management in an effort to help foster independence and productivity in those who did not fit naturally into the German school system. One of the slogans of the program was “Help for self-help.” The program is funded thirty percent by the federal government, thirty percent by the Bavarian government, and forty percent by the city of Munich. After visiting the youth run restaurant, delegates were struck by the professionalism and usefulness of the program.

Maintaining and Enhancing a Great Quality of Life
Quality of life was one of the big themes stressed by speakers and noted by delegates during the week. Both Wilson and Phelps listed the many virtues of Munich and both said it is a great place to live. For one thing, Munich is one of the safest cities in the world with a very low crime rate. “When my wife is coming home late and walking across town I never have to worry about her,” said Phelps. The city has many of the same attributes as Greater Seattle, Phelps noted, who lived in Puyallup for five years. “Hiking, mountains, great arts and culture, a high-tech economy, a gateway to international markets-this describes both Munich and Seattle,” Phelps said.

The city, although now home to more than one million inhabitants, works hard to maintain a village feel. You can take a break from work and ride your bike through the still forest or walk on one of the many pedestrian paths, Phelps noted. The various municipalities surrounding Munich all have a nice local feel with their own stores and beer houses. This is partly by design. Earlier in the week, one of our speakers told the delegation of a tax break for those who live outside of Munich and commute into the city to work. This seemed odd as it would presumably make traffic worse, something they were trying to alleviate. But, Wilson, pointed out, this tax break was designed to encourage people to live in their local small towns and to preserve that way of life.

Of course, the region is well-known for, and many of the week’s speakers commented on, Oktoberfest. Bavaria, we were told, is about beer. Of the 1,000 or so breweries in Germany, 850 are located in Bavaria. Some 16 million visitors come to Oktoberfest each year, making it one of the largest festivals in the world.

It is one of many tourism assets of the region, assets that are actively promoted by Munich. The city’s tourism promotion department has a budget of $36 million, compared with a $3 million budget for the Washington State Tourism office. It was a common comment from delegates that the Puget Sound region has a great story to tell but we don’t expend enough effort telling the story to the world. Munich has great museums, opera, theatre, festivals and a great outdoor life. Puget Sound does too but the Munich region spends far more resources telling the world about their assets.

One of the challenges both Munich and the Puget Sound region face is maintaining a high quality of life as the regions grow and as they face increased competition. Munich workers, like the rest of Germans, enjoy a health care system that insures virtually all people. In fact, health care is one of the “five pillars” of the German social insurance system.

About 90 percent of the population is insured through the state system with most of the rest having private insurance. For workers, unless their income exceeds a certain level, participation in the state system is compulsory and requires contributions to the system of 50 percent by employee and 50 percent by employer. Pensioners, the unemployed and students also receive state insurance. Therein lies the rub, with an aging population there are few workers paying in and more pensioners receiving benefits and using the system more as they age. Absent a Logan’s Run solution, changes will have to be made one way or another to keep the system sustainable. In one of the most accurate charts ever presented on an International Study Mission, Gunter Neubauer with the University of Bundeswehr, displayed what he called “The Interval Reform Chart.” This chart-in classic table graph fashion-showed spikes in German health care reform in two year intervals that corresponded in remarkable fashion exactly between national elections. Neubauer said “this gives people time to forget about the pain of the reforms before the next election.”

Wednesday afternoons are traditionally the time for sector-oriented roundtables where delegates split into small groups to meet with their counterparts on issues such as IT, health care, finance, transportation and other sectors. The Health/Medicine Roundtable took place at one of the many Siemens’ offices in Munich. A small group of delegates led by Marcel Loh from Swedish and including Greg Vigdor, president and CEO of the Washington Health Foundation; William Zumeta, Associate Dean & Professor at the UW’s Daniel Evans School; Claudia Sanders of the Washington State Hospital Association; Gary Gannaway, president and CEO of First Choice Health; and Bob Drewel, executive director of the Puget Sound Regional Council; met with two representatives from Siemens. Rainer Karcher, director at Siemens and Dr. Bernd Ohnesorge of Siemens’ Medical Solutions Group engaged the group in a very frank, fascinating discussion of health care, medical systems, Siemens strategy and health care reform. The delegation invited high level officials from Siemens to come to the Puget Sound region to make presentations to our community and to meet with businesses and leaders here.

The two Siemens participants pointed out that of German health care expenditures, 29% go for drugs, 34% for doctors, 24% for therapy/rehabilitation and 3% for prevention. Both Karcher and Dr. Ohnesorge felt the prevention spending needed to increase. A number of delegates noted that one possible improvement to health care in Germany is for the population to smoke less.

The Crucial Role of Universities and Research Centers
A welcoming political environment for businesses and talented people, a high quality of life-both were consistently listed as important to the success of Munich and to the success of any region. The third leg always mentioned was the importance of the universities and research institutions to the region. Munich is home to 11 universities and polytechnics. It is also home to prestigious research institutions such as the Max Planck Society and the Fraunhofer Institute.

Munich bills itself and works to be “A City of Knowledge.” The city and state provide financial and other support for the educational institutions and for the research organizations. They have created a “City of Knowledge” brochure to brand themselves as a research, high tech city. They recognize, as the brochure states, that “knowledge is proving increasingly to be the key resource in global competition.” The brochure highlights organizations such as The Max Planck Society.

The Max Planck Society concentrates on fundamental research, delving into the far frontiers of science. State funded but with no interference in its work, the institute searches for knowledge. As old man Planck himself said, “knowledge must precede application.” Since 1948, the organization has produced 15 Nobel Lauretes; it accounts for more than a third of the articles published in Germany’s scientific journals. Dr. Berthold Neizert, head of Division for the International Relations Department of the Max Planck Society, spoke to the delegation on Thursday morning. It was interesting to hear Dr. Neizert talk about the factors for successfully integrating a research organization into a region. He, as we had heard before, talked about quality of life and of the importance of strong academic institutions along with high tech industries. He also noted the “friendly political climate”-the Bavarian government has provided support and funding for buildings for the Max Planck Society.

The Fraunhofer Institute, on the other hand, concentrates on applied research working to get contracts from companies to do research and development. With a one billion euro budget, the institute works on, among other disciplines: microelectronics, production, information and communication, materials and components, life sciences, surface technology and photonics and defense research and technology. The institute has over 12,000 contracts and projects every year for more than 3,000 companies and clients. Fraunhofer’s most famous contribution is the development of MP3 audio technology-the format used by most people downloading music from the Internet and listening on their MP3 players.

The Fraunhofer Institute, an applied sciences research institute, is interested in expanding into the western U.S. in a city with a strong research university. Bill Zumeta, associate dean and professor at the University of Washington, expressed interest in exploring a relationship with Fraunhofer and talked with Dr. Dieter Fuchs, the director of International Business Development for the Fraunhofer Institute.

Munich Technical University is one of the prestigious educational and research institutions in the Germany. Three Nobel Laureates work there. The University partners with industry and institutions, including an R&D center for automobile and information technologies with AUDI AG. During the session moderated by Scott Griffin, vice president and chief information officer at Boeing, Dr. Hannemor Keidel, vice president of the Munich Technical University, pointed to a map of the world with red dots indicating the locations of the university’s international partnerships. “We would like to add a red dot,” she said, “in the Pacific Northwest.” Bill Zumeta, presented her with a book on the University of Washington, the first step towards filling in with a red marker a dot in Greater Seattle.

At least three times, speakers told the delegates that Munich could be thought of as “laptops and lederhosen.” It is a high tech city that works hard to preserve its quality of life and understands that its vaunted quality of life is one of the keys to being a high tech city. Even with a governmental structure that makes it difficult to accomplish, the city of Munich recognizes that the region is one economic unit and that they must work together as a region to be successful.

Over a five-day intensive program, many lessons were learned, numerous ties were made and abundant opportunities for follow up were found. Perhaps just as important, delegates-making up a large portion of the civic leadership of the Puget Sound region-had the opportunity to discuss the similar challenges and opportunities our two region’s face. We could learn from Munich’s mistakes and steal their best ideas. As one delegate said, “I learned things I didn’t know I cared about.”

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