Saxony - Economy

Economy

Saxony has, after Saxony Anhalt, the most vibrant economy among the federal states of the former East Germany (GDR). Its economy grew by 1.9% in 2010. Nonetheless, unemployment remains high, and investment is scarce. The eastern part of Germany, excluding Berlin, qualifies as an "Objective 1" development-region within the European Union, and is eligible to receive investment subsidies of up to 30% until 2013. FutureSAX, a business plan competition and entrepreneurial support organization, has been in operation since 2002.

Microchip makers near Dresden have given the region the nickname "Silicon Saxony". The publishing and porcelain industries of the region are well known, although their contributions to the regional economy are not significant. The state government is attempting to develop tourism, notably in the lake district of Lausitz.

Saxony reported an average unemployment of 11.9% in 2010. By comparison the average in the former GDR was 12% for Saxony and 7.7% for Germany overall. The unemployment rate reached a record low of 8.8% in October 2012 (6.5% for complete Germany).

In April 2012 Saxony had an unemployment rate of 10.3%, compared to Germany's 7%, western Germany's 6% and eastern Germany's 11.2%. The Leipzig area, which until recently was among the regions with the highest unemployment rate, could benefit greatly from the investments of Porsche and BMW. With the VW Phaeton factory in Dresden, and many part suppliers, the automoile industry has again become one of the pillars of Saxon industry, as it was in the early 20th century. Zwickau is another major Volkswagen location. Freiberg, the former mining town, has emerged as a foremost location for solar technology. Dresden and some other regions play a leading role in some areas of international biotechnology, such as electronic bioengineering. While these high-technology sectors do not yet offer a large number of jobs, they have stopped or even reversed the brain drain that was occurring until the early 2000s in many parts of Saxony. Regional universities have strengthened their positions by partnering with local industries. Unlike smaller towns, Dresden and Leipzig now have a significant growth in population.