BIO EUROPE 2020 Digital Version – Yokohama Companies

Due to the corona situation, this year’s Bio Europe will be held as digital version from October 26 till 29, 2020. Our office will exhibit digitally and introduce you to Yokohama’s bio-life-science cluster LIP Yokohama and your business opportunities in Yokohama in general.

No matter your stage of planning, we are happy to answer your questions and help you get in touch with the thriving bio-life-science field in Yokohama.

Schedule an appointment with us via the partnering tool or contact us directly. Apart from Bio Europe 2020 we are always happy to visit your company and talk with you about your possibilities.

At Bio Europe 2020 you can get to know Yokohama’s companies, which we will introduce to you below. We can support you to get in touch with the company of your interest or, if necessary, support you in case of any communication difficulties.

 

Glyco Technica Ltd.

Registered in 2011, GlycoTechnica Ltd. is a leading edge bio-technology company with the most advanced technologies for glycan structure analysis and related applications.

Find more information about the company and its products here

CellFree Sciences Co., Ltd.

Esablished in 2002, CellFree Sciences Co., Ltd. is specialized in cell-free protein synthesis technology.

Find more information about the company and its products here.

MabGenesis Inc.

Eatablished in 2019, MabGenesis Inc. is a biopharmaceutical startup that uses 30+ years of antibody research to provide first-in-class and best-in-class therapeutic monoclonal antibody drugs for humans and animals.

More information about the company and its products you can find here

MediGear International Corporation

Established in 2013, MediGear International Corporation is leading in the field of development, manufacturing and sale of medical equipment, especially equipment and systems for IVR medical treatment.

More information about the company and its products you can find here

Reprocell Inc.

Established in 2003, Reprocell Inc. is Japan’s leading stem cell research company, including induced pluripotent stem cell (iPSC) technologies.

More information about the company and its products you can find here

 

 

We are looking forward to meeting you virtually at Bio Europe 2020 and wish you a successful event.

BIO-Europe 2020 – International Partnering Conference and Exhibition

Within successful 26 years Bio Europe has become Europe’s largest life science partnering conference. Annually held in rotating locations within Europe, this year’s version was scheduled to take place in Munich, Germany. However, due to travel restrictions and health security reasons, it was rescheduled to take place virtually from October 26 till 29,2020.

Right now, as of September 23rd, 1,866 attendees and 1,127 companies from 50 countries are registered for the digital event that will bring forth virtual partnering meetings, panels featuring biotechnology and pharmaceutical experts, workshops, company presentations and showcases, as well as start-up and project pitches.

 

This event is an important opportunity to engage with global life science partners and get up-to-date with the latest industry trends in workshops and panels. Our office will make use of this opportunity to extend the bio-life-science network of Yokohama into Europe, introducing Yokohama’s bio-life-science strengths and business opportunities. Therefore, we will do what we can to answer questions and establish business contacts. But we are also eager to support companies from Yokohama to get in touch with European companies for project collaborations or to find business partners in order to expand their base on the European market.

You can find the introduction of five companies from Yokohama participating at Bio Europe here.

Should you have any question regarding the bio-life-science cluster LIP Yokohama, Yokohama itself or your business opportunities, schedule an appointment with us via the partnering tool or contact us directly.

For more information on Bio Europe 2020, also see the website

 

Effects of the Corona crisis 4 – Changes in the MICE business

1 Current market situation

According to a study by the European Institute for Meetings Industry GmbH (EITW) at the Harz University, the events and meetings market in Germany recorded constant growth in the number of participants until 2019. Compared to the previous year, 2019 showed an increase of 2.7% from 412 million participants to 423 million participants. The degree of internationalization had also increased by then. In 2019, 43.2 million subscribers from abroad were recorded, 15.9% more than in 2018. 1

The Corona crisis had abruptly interrupted this success, as all major events have been cancelled since the beginning of March this year and their execution has been subject to so many restrictions that they have become unfeasible for the industry. At the end of May, Jan Kalbfleisch, Managing Director of the MICE trade association Famab, spoke of an ongoing dramatic situation, which was hardly noticed by politicians and the media.

"We have repeatedly pointed out that 60 percent of the companies will run out of liquidity after four months. This critical phase is now beginning." he said, fearing that 250,000 people will have to be laid off starting in June.

One reason for this, he said, was that the financial aid offered by the federal and state governments could not effectively support the industry. First, the current upper limit and the way in which the loss of revenue is calculated already exclude many companies from the entitlement to receive the aid, as there is no adjustment for the specifics of the MICE industry. Secondly, the financial support is limited to 50,000 € per month, which for a company with 250 employees means only 200 € per employee. A company with 100 employees, however, would make losses between 200,000 and 250,000 € despite internal cost reductions.

The association therefore fears that this type of support will not prevent the loss of businesses and jobs. Instead, it is calling for a monthly fixed cost subsidy fund amounting to 2% of annual turnover and an unbureaucratic, quickly realizable loss carry-back. After all, the industry not only secures several thousand jobs, but also generates over ten billion euros in VAT revenue through the guests at events.2 The turnover volume of trade fair organizers in Germany is estimated at around four billion euros, making Germany one of the most important trade fair locations in the world. The Research Institute for Exhibition and Live-Communication (R.I.F.E.L.) has calculated that the damage in the area of trade fair stand construction amounts to 670 million euros, and for the entire trade fair industry as a whole to over 1.6 billion euros.3

2 Exit-Scenarios

The EITW study offers possible scenarios for the future development of the MICE industry. A more optimistic and a more pessimistic scenario was developed for this purpose. According to the study, more than half of the events planned for the year have already been cancelled by 30 March 2020. One third was postponed additionally in case of an improvement. This was especially true for larger events, whereas smaller events were either cancelled immediately or changed into a virtual event. The more optimistic scenario expects the market to begin to recover at the end of the year, provided that the peak of the Corona pandemic would occur between June and August. However, due to the strong regulatory requirements, only about one third of the events could take place again after this period. In this case, the smaller events could be the winners and experience a normalisation by the end of the year. Large events would therefore not return to normality before February or May of the following year.

In the more pessimistic scenario, around 90% of the planned events would be cancelled by December and the market could not recover until summer 2021. As in the first scenario, this would then only apply to smaller events for the time being. Larger events could therefore not expect the market to recover before autumn 2021.4

3 Prospects for the future

The EITW study dealt not only with the current and forecast market situation, but also with how the MICE industry could change. Digitalization seems to be becoming more and more important for events as well. The study compared opinions on the importance of digital event formats and came to the conclusion that the number of those who could imagine a future opportunity for such formats had risen from 47% to 75% within a short time as a result of the corona crisis. Furthermore, hardly one in three people gave hybrid events a chance before the crisis, whereas at the beginning of March 60% of those surveyed could already imagine the potential.4

In an article on the subject of virtual trade fairs, the Springer Professional digital specialist library notes in an article about virtual fairs as an alternative, that most B2B trade fair visitors had already been largely pre-informed about the event and exhibitors before the Corona crisis, so that the leap to a completely digital trade fair could be a clever emergency solution for trade fair participants, especially in times of crisis. Various organizers, such as the all-finance broker pool Fonds Finanz Maklerservice GmbH, for example, had already dared to take this step and made webinars and lectures available on the Internet for streaming free of charge during the virtual trade fair. However, one should not ignore the fact that a complete virtualization of events is expensive for the providers. In addition to virtual events, social authority and social selling, especially the latter, could also be an opportunity for organizers in the crisis, as these methods could achieve similar successes as with direct marketing. Although such measures in the social media are time-consuming, it is possible to address specific target clientele directly, just as trade fair organizers do at trade fairs. What virtual event formats currently do not yet allow to go beyond an emergency solution is the lack of integrated brand experiences that cannot be conveyed without personal presence or at least technological solutions such as augmented and virtual reality. 5

Michael-Thaddäus Schreiber, Professor of Destination and Congress Management and Head of the European Institute for the Meetings Industry (EITW) also believes that smaller event formats will return to normality more quickly, which would benefit regional economic clusters in metropolitan regions, as well as green meetings in more rural areas. However, he does not believe that digital formats could completely replace presence fairs and events:

"Despite all the "digi hype", the crisis also shows us very clearly where the limits of digital capacity lie; the quality of attention in our sessions already decreases significantly after a short time, and after the third video conference on a day at the latest, the desire for "social programs" grows - but in virtual space there is no one waiting for us whom we can perceive with all our senses and experience with our emotions. For business success and private satisfaction, we need live communication; the event industry is more than just "system-relevant", we are "human-relevant": More humanity with meetings".

Instead of complete digitization, Schreiber estimates that the convention bureaus will be more important in the future in terms of promoting conference and congress locations and also in effectively finding suitable venues and event agencies for event organizers. He also assumes that the convention bureaus will have to aim for an effective target group approach based on solid MICE market research and develop new formats and communication channels. Convention Bureaus could therefore be increasingly a source of innovation and motivation in the future, as long as the federal states and local authorities do not cut back on the promotion of financial and human resources.  Overall, Schreiber therefore assumes that the MICE industry could emerge from the crisis stronger than before.6

 

June could be a key month for the MICE industry in which it could be shown how effectively federal and state subsidies have actually prevented company closures. Furthermore, depending on the real exit scenario, it will become clear whether and how quickly the industry can return to its 2019 success figures.

Sources

1  Europäisches Institut für TagungsWirtschaft GmbH (EITW): Meeting- & EventBarometer 2019/2020 – Studie  (last viewed on June 10,2020)
2 Expodatabase; "Jetzt wird es richtig ernst“ Jedes zweite Unternehmen geht unter (last viewed on June 10,2020)
3  Börse ARD; Coronavirus: Wer unter der Krise richtig leidet (last viewed on June 10,2020)
4 German Convention Bureau (GBC); German business event market in transition (last viewed on June 10,2020)
5 Springer Professional;  Corona-Krise lähmt auch die Messebranche (last viewed on June 10,2020)
6 EventCrisis; Mehr Menschlichkeit mit Meetings  (last viewed on June 10,2020)
7 Scenario graphics: Europäisches Institut für TagungsWirtschaft GmbH (EITW); Auswirkungen Corona-Virus (last viewed on June 10,2020)

Effects of the Corona Crisis on Germany 3 – SMEs in focusi

1 Market situation

The easing of the measures in the Corona crisis is a relief for all companies, especially for small and medium-sized enterprises (SMEs). Nevertheless, Marc S. Tenbieg, Chairman of the German Association of Small and Medium-Sized Enterprises, stressed that the future of many companies, irrespective of their sector, was still uncertain and that, in order to avert a wave of insolvencies, economic impulses would have to be implemented in addition to the support measures provided by the federal and state governments. He pointed out: "If you want to strengthen the economy, you have to strengthen small and medium-sized businesses in their entirety. After all, with over 17 million employees and 1.25 million trainees, they are the employment engine and the backbone of the German economy".1

An estimate by the IFO measures the proportion of companies that would have to close down within six months if the lockdown measures were to continue for a longer period of time and the resulting shortfalls were to occur. Accordingly, 29.2% of the companies surveyed fear having to close within three months. 52.7% stated that they would be able to continue for a maximum of six months. As 44.9% of retailers in April stated that they would be able to remain active for a maximum of another three months and 63.2% for a maximum of six months, the gradual lifting of the measures will make things easier for this sector especially. Nevertheless, according to this survey, 18% of companies had already had to react by laying off employees or not renewing expiring contracts.2

Meanwhile, the Federal Ministry of Economics and Technology claims to be prepared for a possible wave of insolvencies with a three-stage plan and can intervene within the plan if necessary with extended credit, tax benefits or interest-free deferrals of tax payments if the financial support measures taken to date are not sufficient to protect companies from insolvency.3

McKinsey & Company Germany Management Consultants conducted a survey of 522 SMEs from all sectors at the end of April, which showed that despite the fact that 56% of companies had not yet resumed operations or had only partially resumed them, 73% were affected by interruptions in the supply chain and 63% expected sales to continue to decline in the current quarter, around 77% were rather optimistic about the future. 11% even reported profits.4 The IFO's business climate index, which rose slightly in May by 5.3 points to 79.5 points, also shows a certain increase in optimism. 5

2 Digitalisation and reshoring

As the MacKinsey survey shows, the Corona crisis not only causes shortfalls, but also certain restructuring in everyday working life and in the company structure. According to the survey, for example, the significance of digitalisation for SMEs has increased as a result of the Corona crisis, with the result that 68 percent of SMEs are currently planning or implementing a completely new business area with independent digital products or services. "37 percent of the SMEs want to automate processes in response to the crisis, 45 percent want to invest in 5G, 36 percent in the Internet of Things (IoT) and also 36 percent in artificial intelligence (AI). In addition, 81 percent assumed that their working models would become more flexible overall.

The serious disruptions in supply chains are also causing more than one in four companies across all sectors to consider reshoring measures in order to regionalize at least parts of the supply chain. However, the survey also showed that this measure seems more appropriate for the IT, telecommunications, financial and insurance services industries. According to the survey, 70% of these industries are considering reshoring options, while only about 50% are considering it in the automotive, plant and machinery industries.4

The IFO express service welcomed the possibility of diversifying German supply chains, especially for imports of medical goods, where failures in the supply chain could have serious consequences. Although only 3.6% of all goods are imported from five or fewer countries, of which 44% come from EU countries, the free movement of goods within the EU is essential for the economy to revive. 17% of production takes place in Germany via international value chains, which is why the European production network is of great importance for Germany.6

 

Despite persistent concerns, a degree of optimism seems to be taking hold among small and medium-sized enterprises as measures against the pandemic are eased. How strong the SME's will be able to survive will depend, among other things, on how sustainable the relaxation will be. Should a second full lockdown occur, future prospects would have to be reassessed. However, the crisis also seems to have brought about some progress: Digitalisation is advancing and working models and company structures are becoming more flexible.

Also read our reports on the general effects on the German economy and tourism sector.

Sources

1 DMB Deutscher Mittelstandsbund; DMB begrüßt Bund-Länder-Beschluss und fordert branchenübergreifendes Konjunkturprogramm  (last viewed on May 27, 2020)
2 IFO Schnelldienst; Konjunkturumfragen im Fokus: Coronakrise trifft deutsche Wirtschaft mit voller Wucht ( page 58-59 (last viewed on May 27, 2020))
3 Bundesministerium für Wirtschaft und Energie; Überblick BMWi-3-Stufen-Plan  (last viewed on May 27, 2020)
4 McKinsey & Company Deutschland; Umfrage - Unternehmen wollen nach Corona digitaler werden  (last viewed on May 27, 2020)
5 Ifo-Geschäftsklimaindex; Unternehmen mit steigenden Erwartungen  (last viewed on May 27, 2020)
6 IFO; ifo Institut erwartet stärkere Diversifizierung der deutschen Lieferketten (last viewed on May 27, 2020)
7  IFO Schnelldienst; Status quo und Zukunft globaler Lieferketten (page 17 (last viewed on May 27, 2020))

Effects of the Corona Crisis on the German Economy 2 – Focus on travel and hotel industry/gastronomy

1 Relaxation in the tourism industry

Now that most of the restrictions to contain the corona pandemic have been loosened, there are still major restrictions for many sectors. For example, there are still travel restrictions in many countries that prevent or severely delay a return trip from the respective country to Germany. For this reason, the Federal Foreign Office advises against non-essential tourist travel until 14 June 2020.1

In addition, checks are still carried out at the internal EU borders. Although the Federal Interior Minister Horst Seehofer decided that border controls should be gradually relaxed from 16 May 2020, he also warned that citizens should continue to refrain from unnecessary travel. If the number of Corona cases remains low, border controls will be lifted by 15 June 2020.2

Despite these circumstances, some airlines have already announced the resumption of some flight routes, although not all of them. Ryanair, for example, announced that it would resume 40% of its operations from 1 July 2020, subject to the easing of restrictions. Around 1,000 flights are then to be able to take off daily from most of its locations in Europe, after previously being restricted to 30 flights between Ireland, the UK and the EU.3

Lufthansa, SWISS and Eurowings have announced an expansion of their flight operations already for June and will be flying to a total of 106 destinations in Germany and Europe, including holiday destinations such as Mallorca, and 20 intercontinental destinations. By the end of June, the offer is to be increased to 1800 flights per week.4 For this purpose, the fleet would be doubled from the current 80 to 160 passenger jets. 5

Tui is also currently preparing to resume tourism operations. In an interview, CEO Fritz Joussen assumed that although flight, hotel and cruise operations would remain restricted - in addition to hygiene measures, reductions in room allotments and reduced or modified sports and leisure facilities, more days at sea instead of on land should be spent on cruises - they could be resumed as soon as the EU restrictions are relaxed.6 Tui plans to resume domestic tourism operations from 25 May 2020.7

2 Prospects for the tourism industry

At different times, but usually from the middle to the end of May, the federal states allow accommodation in hotels and lodgings for tourist stays as long as conditions such as distance regulations and hygiene measures are met and controlled. Dormitories, swimming pools, sports areas and saunas must usually remain closed. In most federal states the restrictions will probably remain in force until mid-June at the latest, but in Lower Saxony the restrictions are expected to remain in force until the end of August.8

At the end of April, the Federal Competence Centre for Tourism published forecasts of optimistic, realistic and pessimistic scenarios for the further economic development of the tourism industry. The developments in the individual scenarios relate strongly to the presumed duration of the travel restrictions.

According to the report, tourism would continue to record only low turnover until the onset of easing measures, after which turnover could rise again quickly. It is possible that the phase of relaxation in domestic tourism could end in August 2020, so that the lifting of further travel restrictions could be expected. While domestic tourism could already have returned to normal by Easter 2021, the analysis currently assumes that the situation at a global level will only ease by the same time.

Expressed in figures, the scenarios assume that, in the best case, domestic tourism could already return to 60% of the booked turnover of the same period last year by mid-June. In the worst case, the easing phase would continue until the end of the year, resulting in booked turnover of only 30%. In the best case, a revival in tourism could occur from mid-June to the end of September and result in booked turnover of 80%. The industry would thus return to normality between October and December this year. However, if the easing period actually lasts until the end of December, the industry could not experience a revival until 2021 as a whole, with booked turnover of around 50%. The industry would then only return to normality between January 2022 and October 2023.

International tourism could record between 20% and 40% booked turnover during the relaxation phase, experience a revival between October 2020 and July 2022 with between 30% and 70% booked turnover and then, depending on the scenario, return to normality either between January and September 2021 or by October 2024.9

However, the actual development in the tourism industry depends on the further course of the pandemic. Prof. Jürgen Schmude, President of the German Society for Tourism Studies, notes that tourism could also lead to a new wave of infection and thus cause renewed restrictions. While hotels and restaurants or even beaches are able to establish methods for keeping physical distance, day tourism and thus larger gatherings of people in tourist locations cannot be controlled. In his mind, a further danger for the tourism industry is the possible emergence of competition. If a price war were to take place to attract tourists, this could be just as devastating for the industry as the actual lockdown itself.10

For the hotel and restaurant industry, the easing of the rules seems to be vital for survival. At the end of April, the President of the German Hotel and Restaurant Association (DEHOGA Bundesverband) Guido Zöllick spoke of a rise in unemployment in April in the German hotel and restaurant industry of 208.2 percent compared to the same month last year, of more than one million employees on short-time work and of the fact that the liquidity support provided so far was not sufficient, had not been granted or that the reimbursement of the short-time work allowance for March had not yet taken place for most companies.11

On May 6th, the DEHOGA Federal Association therefore commented positively on the relaxation: "We welcome the fact that there are finally concrete opening perspectives for the hotel and restaurant industry in the individual federal states. [...] Most establishments are in the eighth week of closure with zero turnover and continuing high fixed costs. [...] It is therefore right and fitting that the Minister Presidents act now in a balance between responsibility for the health of the people in this country, but also responsibility for the economy", said Zöllick. However, the industry continues to demand state support, as many companies would only have a chance of survival with this support.12

Despite the cautious optimism, the further development of the German economy and the survival of individual companies continues to depend on the course of the corona pandemic. If renewed increases in the number of infections do not force a reversal of easing measures, it can be assumed that the sectors will slowly recover when the easing measures come into force. However, the emphasis remains on slow for sectors such as gastronomy, accommodation and tourism, because on the one hand their capacities will remain well below 100% for the foreseeable future and it remains to be seen how sympathetic customers will react to the hygiene and protection measures or whether they will accept them at all.

 

For more information also see the report on general effects of the corona crisis on the German economy.

Sources

1 Auswärtiges Amt; Weltweite Reisewarnung für nicht notwendige, touristische Reisen (last viewed on May 20, 2020)
2 ZDF Nachrichten; Grenzen öffnen - aber nicht für Urlauber (last viewed on May 20, 2020)
3 Ryanair; Ryanair to restore 40% of scheduled flights from 1 July (last viewed on May 20, 2020)
4 Lufthansa; Lufthansa Group baut Angebot mit Juni-Flugplan deutlich aus (last viewed on May 20, 2020)
5 Frankfurter Allgemeine Zeitung; Lufthansa plant deutlich mehr Flüge ab Juni (last viewed on May 20, 2020)
6 TUI Deutschland GmbH; Interview mit Fritz Joussen (TUI Group CEO) (last viewed on May 20, 2020)
7 TUI Deutschland GmbH; Aktuelle Reiseinformation: TUI Info Coronavirus (last viewed on May 20, 2020)
8 DTV Deutscher Tourismusverband; Länderverordnungen zum Verbot touristischer Vermietungen (last viewed on May 20, 2020)
9 Kompetenzzentrum Tourismus des Bundes; Recovery-Check #2: Binnentourismus erholt sich deutlich früher als der internationale Tourismus (last viewed on May 20, 2020)
10 Wirtschaftswoche; „Tourismus wird nach Corona nicht derselbe sein“ (last viewed on May 20, 2020)
11 DEHOGA Deutscher Hotel- und Gaststätten Bundesverband; Aktuelle Zahlen zu Kurzarbeit und Arbeitslosigkeit - Corona-Schock im Gastgewerbe (last viewed on May 20, 2020)
12 DEHOGA Deutscher Hotel- und Gaststätten Bundesverband; DEHOGA begrüßt konkrete Öffnungstermine für Restaurants und Hotels (last viewed on May 20, 2020)

 

The Effects of the Corona Crisis on the German Economy

1) General effects on economic development nationally and internationally

The most visible effects on the economy can be tracked at the stock market. According to BBC, in March the Dow and the FTSE were hit by their strongest one-day declines since 1987.1 It was stated that “Investors fear the spread of the coronavirus will destroy economic growth and that government action may not be enough to stop the decline”.

In terms of a fast counteraction, central banks in many countries have cut interest rates, to lower the price for borrowing and thus encouraging to spend more, which would lead to a new boost to the economy.2

Estimations by the Organisation for Economic Cooperation and Development (OECD) show that the economic growth might slow down dramatically, reaching “its slowest rate since 2009 this year”.  The forecast indicates 0,5% less growth in 2020, compared to November 2019. Due to many industry´s reliance on China’s industries, the global growth could even drop to 1.5 percent in 2020, nearly half the rate originally projected, if the impact on advanced economies turns out to be as severe as the disruptions suffered by China, the OECD warns.3

Travel industry to cope with hardest hit

In efforts to contain the virus from further spread, airlines have cut flights, tourists had to cancel holiday and business trips and governments around the world restricted the travel up to a full lockdown, where only urgent trips are allowed. In addition to travel restrictions, the EU is closing borders and doesn´t allow entries from outside the bloc. This, in total badly damaged the travel industry. An air passenger market analysis shows, that with 80% less flights, the industry-wide revenue passenger kilometres (RPKs) had the largest decline in recent history. In seasonally-adjusted terms global passenger volumes shrinked to levels last recorded in 2006. Furthermore, even if travel bans are lifted, the industry expects people will initially keep their reluctance to book flights.5

Food and hotel service industry at stake

When at first the recommendation to stay at home caused declines in restaurant and hotel reservations, the closure of restaurants internationally lead to a severe loss of income of almost 100%. Where possible, restaurant owners try to at least ensure some revenue by offering take-away or delivery service.6

The economy is not only threatened by a further declining growth rate, but also due to interruptions in the supply chain. This affects every sector, from manufacturing industries, medical sector to the supermarkets. In cooperation with the EU Member States, the European Commission tries to counteract those interruptions during the crisis:

“Regardless of the transport mode, the Commission is working with Member States on ways of ensuring economic continuity, guaranteeing the flow of goods and the supply chain, securing essential travel, as well as the functioning of the Internal Market and transport safety.” 7

1.1) Especially affected sectors in Germany

Compared to economic crises or natural disasters of recent decades, the corona crisis´ effects on Germany´s economy are expected to be likely far extensive. Germany´s economic research institute Ifo has released an estimation showing, that due to production loss, short-time work and increasing unemployment and depending on the duration of an economic shutdown -even if only partial-, the economy might diminish by 7.2 to 20.6% of the GDP, which correlates to costs of approximately EUR 255 to 729 billion.”8

As within the whole European Union the service sector and trade sector seem to experience the worst damage. The IFO´s business climate indicator for the service sector, except for food retailers and drugstores, has dropped to the lowest level since the beginning of the index in 2005. In the trade sector the business climate indicator reportedly collapsed. “Expectations tumbled to their lowest level since German reunification.”

In manufacturing, the index fell to its lowest level since August 2009, but had never fallen so deep before since reunification. Many companies have announced plans to curtail production. Apparently, the construction sector was so far not affected too badly, but the prospect for this sector worsened as well.9

While in the beginning of March 2020 the media did not expect too dramatic effects for the German economy, at the end of the same month, the headlines of almost every newspaper were announcing an unavoidable and grave recession, causing the GDP to decline down to 5,4% in the worst case scenario. Every fourth industrial enterprise will reportedly have to react with short-time working and every tenth medium-sized company is threatened by insolvency. 10

 

2) The Necessity of lockdowns

The Corona Virus´ effects on the economy may lead to the question, whether travel restrictions and a lockdown are necessary and every country tried to avoid this measure until the numbers of infection cases rose too high. In Germany the travel restrictions and ban on social activities came into action nationwide between the beginning and the middle of March. However some federal states like Bavaria have stricter restrictions including a curfew. Jena was the first city to make it an obligation to wear face masks when going to supermarkets in the beginning of April.11 And the federal government extended this obligation to all of Germany. From April 27, people are hence obliged to wear face masks when using public transport or entering stores.12

The danger of the new Corona virus and the influenza are often compared and even though the course of the disease seems to be generally milder in European countries, the head of the Robert Koch institute warns, that both viruses could hardly be compared. He states that, the influenza is dangerous, but the disease burden of the new virus is much higher, it spreads faster and leads to a heavier disease process and more cases of death. Since there is no vaccination or effective medicine yet, the fear that the number of ventilators and intensive care beds will not be sufficient is not unfounded.13 Without counteraction, one infected person is said to spread the virus by 2.5. 14

As far as the WHO statistics go, most people infected with COVID-19 virus have mild disease and recover without necessity of intensive care. Approximately 80% of laboratory confirmed patients are said to have had mild to moderate disease, which includes non-pneumonia and pneumonia cases. 13.8% are reported to have severe disease and 6.1% are critical (respiratory failure, septic shock, and/or multiple organ dysfunction/failure).15

So far the numbers might seem to be not concerning, however with a growing infection rate the pressure on the health care system rises until it is threatened to collapse.

According to a study of the Imperial College COVID-19 Response Team, lockdown measures in 1918, when the world faced a similar pandemic virus, reduced the spread and overall mortality rate, compared to places without such lockdown measures as closing public places and institutions and reducing social contacts to a minimum. Combined with contemporary infection research findings, without vaccine or effective medicine, two strategies appear most effective: Either to mitigate the spread and protect those most at risk or to suppress the spread in order to reduce case numbers to low levels and maintain those low levels.

The first option can reduce the peak health care demand, but would only slow the epidemic spread to some degree, which is why the study´s conclusion is ´that optimal mitigation policies (combining home isolation of suspect cases, home quarantine of those living in the same household as suspect cases, and social distancing of the  elderly and others at most risk of severe disease) might reduce peak healthcare demand by 2/3 and deaths by half. However, the resulting mitigated epidemic would still likely result in hundreds of thousands of deaths and health systems (most notably intensive care units) being overwhelmed many times over.´

By calculating the infection spread and infection fatality rate for Great Britain, without mitigation measures, the study predicts an infection rate of 85% and 510000 people to die of Covid-19, the rising mortality rate due to the collapsing health care system yet being to add. While numbers would vary, the study results can be applied to Germany and other high-income countries with well-functioning health care system.

This figure shows how much combining mitigating and suppressing measures can reduce the pressure on the health care system. 16

At the moment the restrictions in Germany shall be kept effective until at least May 10th. (Decided on April 30, 2020) 17 However, since it seems likely that the infection rate would rise again after lifting the restrictions, the research team of the Imperial College suggests that the restrictions should stay effective until a sufficient stock of vaccines is available and that might take 18 months or even longer.18

3) How the German Government counteracts economic loss

When thinking of the effects of the Corona crisis, it is evident, that the economic damage is being very much affected by the potential loss of small- and medium sized enterprises (SMEs). In a letter addressed to the Federal Minister of Economics and Energy, the HDE (German Trade Association) fears that especially retail companies and shops won’t be able to cope with the loss of revenue and ongoing rental costs.19

To protect SMEs or self-employed that would be forced to close their business for various reasons, such as not being able to pay their employees anymore and not being able to keep up the production or supply chain, subsidies and loans were made available on various levels.

Every state provides its own economic emergency aid for SMEs and self-employed persons, that varies from €3000 up to €60.000, depending on the size of the company. The amount of financial support varies very strongly from state to state, but in addition to the state’s efforts the federal government provides further measures.20

It decided on a supplementary budget for medical and economical protection measures, as well as research projects. Within the total expenditure of EUR 484.5 billion instead of EUR 362 billion, EUR 50 billion are said to be used for the support of small businesses. This is intended to provide bridging aid for "solo self-employed persons", small businesses and small entrepreneurs when their existence is threatened without assistance.

In order to secure the existence of "solo self-employed persons", among others, the funds for unemployment benefit II and basic security were increased by a total of approximately 7.7 billion euros. Provisions were increased by about 5.9 billion euros for possible claims in the area of warranties and guarantees, which may arise in particular as a result of economic upheavals.

In addition, the Federal Government has agreed on the establishment of a protective shield for employees and companies which, among other things, makes the short-time work allowance more flexible and improves liquidity for companies. Through fiscal measures such as the granting of deferments, through new measures at the Kreditanstalt für Wiederaufbau (Reconstruction Loan Corporation KfW) and in the area of guarantees, KfW was enabled to provide the necessary guarantees to implement these programs. 21

Apart from loans that must be paid back, an emergency aid for self-employed persons, freelancers and small businesses was established and grants a subsidy ranging from €9000 up to €15000, depending on the number of employees, paid for three months. This subsidy does not have to be repaid and thus lightens the burden of SMEs and self-employed persons.

Overall the protective shield for employees, self-employed persons and companies is the largest aid package in the history of the Federal Republic of Germany. The total volume of measures affecting the budget amounts to EUR 353.3 billion and the total volume of guarantees amounts to EUR 819.7 billion.22

The Economic Stabilization Fund provides €100 billion capital measures, €400 billion for guarantees, €100 billion participation in refinancing KfW programs, KfW loans for SMEs ranging from €1 billion up to an unlimited sum. Tax prepayments are reduced and deferral or enforcement measures are payable later. By means of short-time allowance the companies receive a reimbursement of 1 year's worth social security payments if 10% of employees are on short-time work and workers receive 60% of their net salary from the Federal Labour Office.23

4) Governmental Support for Citizens

The pandemic is putting German citizens to a severe test, not only financially but also psychologically. In addition, in many a household childcare needs to be managed in parallel with work and there is also a legal dimension where there are questions and concerns. One of the greatest fears of not being able to pay the rent due to corona-related loss of earnings and thus losing one's home was answered by the federal government with a protective measure that suspends rent cancellations until the end of June.

Another legal point is the continuation of companies that are in economic difficulties or have become insolvent as a result of the Corona pandemic. Usually an insolvent company must file for insolvency immediately, but this obligation was suspended until the end of September 2020.

Simplifications will be introduced for cooperatives, companies, associations and foundations which will enable the legal forms concerned to take the necessary decisions and remain capable of acting even if restrictions on the possibilities of assembly continue to exist.24

The relevant ministries of the Federal Government have set up information hotlines for companies and citizens to answer economic, legal and medical questions.25 The ministry of family affairs for example, provides parents with information regarding childcare during the corona crisis. While in general schools and nursery facilities are closed until further notice, in most cases, parents with system-relevant professions - such as medical care, police or critical infrastructure - are entitled to "emergency care" for their children, that may vary in method from state to state. Parents that do not execute a system-relevant profession can receive 67% of their net income for six weeks if if they can’t continue to work. In case the company applied for short-work, parents can receive a higher amount of continued wage payment, than workers without children receive.26

Social distancing and the worries related to the financial and medical situation are a strain to the citizens, which is why the statutory health insurance funds and the Federal Association of Statutory Health Insurance Physicians have decided that psychotherapies can be continued without restriction using special video software that ensures data protection.27

Various foundations, such as the German Depression Aid foundation, provide information on their websites on how to create a structured daily routine despite quarantine or home office and have also set up hotlines where those affected can talk about their fears and worries outside of psychotherapy.28

5) Corona-related behavior tendencies towards foreign citizens

Speaking of the social and psychological dimension of the crisis, some behavior tendencies that are either related to fear or even to xenophobia can be witnessed in the society since the outbreak of covid-19 in Germany. The Federal Anti-Discrimination Agency, an independent contact point for people affected by discrimination, that offers legal advice for those who have experienced discrimination -for example due to their ethnic origin-, had received many claims of citizens in February. Especially Asian looking citizens reported to have been discriminated against lately, no matter their true origin or relation to China. Reportedly a Chinese patient was denied a medical examination, even though he had symptoms completely different from Corona. In trains people refrained from sitting next to Asian looking persons and many more of such cases were reported to the agency. 29

Newspapers are reporting that Asian citizens continue to face discrimination and are even being threatened or attacked physically. In March Chinese Music students were denied the entrance examination at a music high school in Berlin, without check whether the students have recently been in China or other risk areas.30

Amnesty International reports that the mixing of fear with already existing racist stereotypes can also be observed in the media. For example, in early February, the Bild newspapers asked whether one could still eat fortune-cookies or accept packages from China. The news magazine Der Spiegel showed on its cover picture in February a person in red protective clothing, completely masked with a respiratory mask and goggles, and the title: "Corona virus. Made in China. When globalization becomes a deadly danger". Both examples not only suggest that the entire Chinese population was the cause and spread of the virus. "Made in China" also seems to imply that the virus was "manufactured" on purpose and "exported" in China - an argument that is also found in colonial-racist conspiracy theories. In their article Amnesty International urges people to react to and object discriminating statements in solidarity.31

On the internet the victims of such cases of discrimination and racism aligned via twitter by posting their experiences and responses under the hashtag #IchBinKeinVirus (the English equivalent #Iamnotavirus relates to American and world-wide incidents) to rase awareness and call out to stop such behavior.32

As already mentioned, the federal anti-discrimination office of Germany can be contacted not only to report such cases, but also to receive initial legal advice on how to react juristically to discrimination and incidents. Depending on the case, victims can receive compensation for damage, damage to their reputation or to personal suffering.28

Apart from the federal agency, victims of discrimination in relation to the corona virus and discrimination in general can contact the anti-discrimination association Germany, an alliance of independent advisory bodies and receive personal and legal advice.33

Not too long before the pandemic started in Germany, the terroristic incident in Hanau in the state of Hessia, shew that in Germany there are racist and right-wing extremistic tendencies that might eventually result in violent acts. On March 21, politicians remembered the victims of that incident and realized, that the discrimination against Asian looking citizens only adds to that overall tendency which shall be met by stronger countermeasures, the politicians are currently discussing about.34

The Council of Europe lately released a report on measures against racism and right-wing extremism in which for Germany it demands more intensive prevention and combating of right-wing extremism and racism, more effective action against hate speech on the Internet and an expanded mandate and additional powers for the federal anti-discrimination office.35

In summary the Corona pandemic has already causes considerable havoc on the economy, the social life, the health care system and the political climate in Germany. It is obvious that the extent of damage to the economy depends primarily on the duration of the restrictions on public life and closures of workplaces. At the same time, it is also understandable, that measures should not be loosened too soon to prevent a sudden and severe increase in new infections. In this respect, the health care system and the economy are in a conflict of interests in which actions need to be considered carefully. After all, a renewed increase in the number of infections and a resulting collapse of the health system could have even more serious consequences for the economy.

Once the virus control measures have been lifted, the revival of the economy will depend above all on how many small and medium-sized enterprises will have been saved and how quickly the accustomed production chains and trade partnerships can be resumed.

Sources

1  BBC; Coronavirus: Stock bounces as volatility continues (last viewed on April 30, 2020)
2  BBC; Coronavirus: A visual guide to the economic impact (last viewed on April 30, 2020)
3  Statista; Coronavirus: OECD slashes Forecast for World Economy (last viewed on April 30, 2020)
4  IATA; COVID-19 Updated Impact Assessment (last viewed on April 30, 2020)
5  IATA; Air Passenger Market Analysis, March 2020 (last viewed on April 30, 2020)
6  Statista; COVID-19 Impact: Restaurant Industry Collapses Due to Widespread Shutdowns (last viewed on April 30, 2020)
7  European Commission; Coordinated economic response to the COVID-19 Outbreak (Page 4, (last viewed on April 30, 2020))
8  IFO Institute; Corona will cost Germany hundreds of billions of euros (last viewed on April 30, 2020)
9  IFO Institute; Business climate index collapses (MARCH 2020) (last viewed on April 30, 2020)
10  ZEIT ONLINE; Wirtschaftsweise halten schwere Rezesssion für unvermeidbar (last viewed on April 30, 2020)
11  Frankfurter Rundschau; Coronavirus in Deutschland: Erste Großstadt führt Maskenpflicht ein (last viewed on April 30, 2020)
12 Bundesregierung; Maskenpflicht in ganz Deutschland (last viewed on April 30, 2020)
13  Merkur; Coronavirus und Grippe: Das sind die Unterschiede – RKI mit neuer Einschätzung (last viewed on April 30, 2020)
14  RKI; Coronavirus SARS-CoV-2 (last viewed on April 30, 2020)
15  Report of WHO-China Joint Mission on Coronavirus Disease 2019 (COVID-19) (Page 12, last viewed on April 30, 2020)
16  Imperial College COVID-19 Response Team; Report 9: Impact of non-pharmaceuticall interventions (NPIs) to reduce COVID-19 mortality and health care demand (Page 1, 4, 8 (last viewed on April 30, 2020))
17 Bundesregierung; Kontaktbeschränkungen und erste Lockerungen (last viewed on April 30, 2020)
18  Imperial College COVID-19 Response Team; Report 9: Impact of non-pharmaceuticall interventions (NPIs) to reduce COVID-19 mortality and health care demand (page 15 (last viewed on April 30, 2020))
19  HDE; Hilfe für den Einzelhandel (last viewed on April 30, 2020)
20  Bundesfinanzministerium; Corona Soforthilfe: Übersicht der zuständigen Behörden oder Stellen in den Ländern (last viewed on April 30, 2020)
21  Bundesregierung; Nachtragshaushalt 2020 (last viewed on April 30, 2020)
22 Bundesfinanzministerium; Mit aller Kraft gegen die Corona-Krise: Corona-Schutzschild (last viewed on April 30, 2020)
23 Bundesfinanzministerium; Mit aller Kraft gegen die Corona-Krise: Schutzschild für Deutschland (last viewed on April 30, 2020)
24  Bundesregierung; Mehr Rechtssicherheit in Krisenzeiten (last viewed on April 30, 2020)
25  Bundesgesundheitsministerium; Hotlines zum Coronavirus (last viewed on April 30, 2020)
26  Bundesministerium für Familie, Senioren, Frauen und Jugend; Finanzielle Unterstützung für Familien in der Corona-Zeit (last viewed on April 30, 2020)
27  ZEIT ONLINE; Psychisch krank in Quarantäne (last viewed on April 30, 2020)
28  Deutsche Depressions Hilfe; Hinweise an Depression erkrankte Menschen während der Corona-Krise (last viewed on April 30, 2020)
29  Antidiskriminierungsstelle des Bundes; Coronavirus: Gehäufte Anfragen wegen Diskriminierung bei der Antidiskriminierungsstelle des Bundes (last viewed on April 30, 2020)
30  ZEIT ONLINE; Rassismus: Ich.Bin.Kein.Virus. (last viewed on April 30, 2020)
31  Amnesty International; Coronavirus: Keine Rechtfertigung für Rassismus (last viewed on April 30, 2020)
32  Twitter; #ichbinkeinvirus (last viewed on April 30, 2020)
33  Antidiskriminierungsverband Deutschland; Diskriminierung benennen, Betroffene unterstützen, Gleichbehandlung umsetzen (last viewed on April 30, 2020)
34  Frankfurter Rundschau; Kampf gegen Rassismus – gerade in Corona-Zeiten (last viewed on April 30, 2020)
35  Antidiskriminierungsstelle des Bundes; Europarats-Bericht: Deutschland muss mehr gegen Rassismus tun/Antidiskriminierungsstelle des Bundes unterstützt Empfehlungen (last viewed on April 30, 2020)

Stronger creativity initiative from Yokohama at Ambiente

Unfortunately, this year's Ambiente fell short of expectations, as fear of the corona virus and the effects of the weather conditions caused visitor numbers to drop sharply. Regrettably, this was also felt by the exhibitors, as 20% fewer visitors than last year also left the halls relatively empty.

Texi Yokohama nevertheless effectively managed to present products from Yokohama at its stand in the Japan Style exhibitor area. This year, one product was particularly in the spotlight as it was developed in cooperation with the Yokohama University of Art.

Creativity relations

For this reason, students and a professor were also guests in Frankfurt and actively involved at the stand. A new promotion video, which was played on two tablets for the visitors, showed the process from product design to production and demonstrated an important step in the big project to link even more creative minds with manufacturers in Yokohama in order to develop even more innovations.

The Swaying Glass continues the Ripple Glass product line with the striking design of gentle water waves. It does not stand on a flat surface, but is round, so that it rotates in circles in the wind or when touched in a swaying movement. Of course, the popular fabric napkins and handkerchiefs, with their indigo print being a fine art of Yokohama craftsmanship, as well as the ultra-lightweight watches that can be assembled without tools were also on display again.

New products are already being manufactured and future visitors to the next Ambiente can certainly look forward to further demonstrations of the high level of creativity and manufacturing skills that are at home in Yokohama.

The article of 2019's exhibition you can find here.

Yokohama Companies again at COMPAMED in Düsseldorf

From November 18 to November 21, 2019 the medical technology trade fair Compamed took place again in Düsseldorf, together with the health and medical technology trade fair Medica. Once again this year there was a Yokohama Pavilion at Compamed, where the Yokohama Industrial Development Corporation (IDEC) exhibited together with five companies from Yokohama.

Medica took place for the first time in 1972 and exhibitor and visitor numbers have grown steadily since then, so that Medica has now become the largest health and medical technology trade fair. Compamed, which presents medical devices and technologies, was first held in 1992, but has been growing steadily ever since, as well. According to organizer figures, this year around 5500 exhibitors exhibited at Medica and around 800 at Compamed. Both fairs together thus recorded a record number of around 121,000 visitors.

The five companies from Yokohama that exhibited at the Japan Pavilion are presented below. Of these five, three have been to the Yokohama Pavilion several times, one company exhibited at another pavilion last year and one company joined the exhibitor group for the first time. The booths of these companies were very well visited, making this year's exhibition the most successful for the companies. In addition, the seminar area close to the Yokohama Pavilion was more integrated into the activities this time, so that IDEC and Think Lands were also able to give presentations.

This year's participation at Compamed was not only aimed at supporting the companies from Yokohama, but also at looking at the future of the healthcare, medical technology and biotechnology sector, and looking for connections to German clusters. With this in mind, several cluster representatives were contacted in order to identify and encourage future cooperation opportunities.

AmbienteTexi2019Booth

Texi Yokohama shows sustainable crafts at Ambiente 2019

For the fourth year in a row, the creative heads of texi yokohama exhibited their sustainable crafts at Ambiente in Frankfurt. In a total of nine Messe Frankfurt hall complexes, over 4400 manufacturers in the Living, Giving and Dining segments presented the latest trends and were noticed by 136,000 visitors from 166 countries. (Report: Ambiente 2019  )

This time Texi yokohama exhibited together with some other Japanese manufacturers in hall 8. Most of the exhibitors focused on using traditional craftsmanship in a new product line to revive the declining traditional businesses, but also on tackling ongoing environmental problems by improving or adapting production methods. Overall, both exhibitors and visitors showed a high level of awareness and interest in the well-known 3 R's, Reduce, Reuse, Recycle.

Sustainable Crafts

The designers and companies involved in texi yokohama have also made these three Rs their flags. The Blister Pack Clock is an example of how the production of food packaging can not only create short-lived disposable objects, but also elegant products that can be used in the long term. Because should this watch fall down, it does not break so easily. The material is super-light and elastic enough to allow the dial and case to separate from each other and then be reassembled rather than cracking or showing other damage. The same applies to the Blisterpack picture frames.

In addition, texi yokohama is one of the very few who dare to recycle airbags at all. While 95% of a vehicle can be recycled, this is usually not the case with airbags. But texi yokohama proves that it's worth it: the old airbags become durable bags with interesting designs. As part of texi yokohama, the Rebirth Project is strongly committed to upcycling and shows that something modern can emerge from the old.

Compamed2018YokohamaBooth3

Yokohama was active at the Compamed in Düsseldorf

From November 12th till November 15th the Chief Representative visited the Yokohama Pavillion at the medical technology fair Compamed in Düsseldorf. Held together with the world’s biggest health care and medical technology exhibition Medica in total the halls were filled by more than 120,000 visitors. The Yokohama Industrial Development Corporation (IDEC) exhibited a booth in the Yokohama Pavilion, together with five small and medium-sized companies and venture companies from Yokohama. For IDEC, which supports Japanese companies in expanding to the European market and vice-versa companies from Europe to Yokohama’s market, as well as for the five companies from Yokohama, it was already the second year to exhibit a booth and get in touch with European healthcare-related companies.

Vital link at the Yokohama Pavillion

To perform one of our office’s main duties, the Chief Representative attended this booth as well and helped to present the special technologies of Yokohama’s companies to the over 500 visitors and also served as a connector and coordinator for the relations with JETRO, the Japanese Consulate General in Düsseldorf, and other government-related organizations and thus made many business talks possible.

Yokohama is an excellent location for companies in the healthcare and bio-life science sectors. Find out more about IDEC here and what opportunities can arise for your company or contact us.