In 2000 I established my own consulting business in Munich and was immediately busy advising a major UK bank on the roll-out of a new online service in Germany. It was a great start and looked like the first of many blue chip clients to come. After all how could Europe’s largest market fail to attract dozens of Britain’s biggest companies? But, like many new ventures based on untested assumptions, things did not work out as planned.
Two more British financial services clients then followed. The first was a boutique investment company looking to develop a client base in Germany. The other was a large mutual fund company which we helped to raise €60m of equity from German institutions for a new property fund. After that it went very quiet on the UK front and I had to return in 2005 to my previous role as adviser to national and regional governments on attracting Foreign Direct Investment from Germany.
There was plenty of German investment going into the UK then but a limited flow in the other direction. And this situation has continued up to the present time. The main reason is simply the lack of success stories combined with a number of high profile failures such as Barclays Bank and Marks & Spencers. In other words no momentum has so far been created by British investors and this has resulted in a dearth of UK executives with experience of operating in the German market.
Increasingly, there are signs that the mood is changing and some company strategists are dusting off their earlier plans to expand here. This is now being driven mainly either by regulatory considerations as for the banking sector or by logistic issues for manufacturers. However, it is perhaps a good time for other British enterprises to also take a strategic and calm look at the business opportunities offered by the world’s 4th largest economy.