Leipzig's transition to a service economy with a stable foundation in industry and trade is supported by an extensive infrastructure and the enhancement of Leipzig's immaterial location factors. Following the framework of the Urban Development Plan - Industrial Spaces ("STEP Gewerbliche Bauflächen"), the City of Leipzig offers a large, diverse supply of commercial spaces to new businesses through adaptive reuse of old industrial buildings and through the redevelopment of existing commercial space. In an effort to strengthen the whole economic region, the city council works to improve the image of the city within the region while promoting cooperation between municipalities, for example with the neighbouring city of Halle (Saale).
Economy and Infrastructure Overview
Although being associated with the image of a city of trade and trade fairs, Leipzig was first and foremost an industrial city in 1989. Since that time, Leipzig has witnessed a large share of its industries close, which led to the loss of about 90 percent of manufacturing jobs. The repercussions are still visible today with a perpetually high unemployment rate and vacant and neglected inner-city space.
The decisions by Porsche and BMW BMW plant to choose Leipzig as the site for their new assembly plants provided a welcomed change of direction to the city's struggling industrial sector. The BMW plant, built in 2005, is the city's largest employer with about 5,000 staff and brought an investment of 1.3 billion Euros to Leipzig. Several related industries have also grown up near the plants, such as suppliers and other company-related services. The housing and labour markets also gained a boost from this major development.
The extensive construction and redevelopment of the city's infrastructure has been of central importance to the city. Public transport, in particular, has contributed to the city's upward trend, as well as the freight infrastructure near the airport. In 2004 and 2006 DHL und Amazon [DE] chose the Leipzig region for the locations of their new international air freight hub and new shipping/receiving centre, respectively. The northern part of Leipzig continues to be a primary location of importance in the infrastructural development of the city. The existing concentration of transportation amenities has benefited from complementary development, such as the Leipzig/Halle Intercontinental airport, motorways, major interstate roads, regional and long-distance railway connections and the GVZ freight distribution centre.
The completion of the City Tunnel, in 2012 is the most important transportation project over the last decade. It represents the first underground rail line in Leipzig and runs from the Central Rail Station (Hauptbahnhof) to the Bavarian Station (Bayerischer Bahnhof) directly under the city centre with stops at the Market by the Old Town Hall and Wilhelm-Leuschner-Platz. The total cost of the four-kilometre-long tunnel is approximately €571 million. Vehicle kilometres travelled will be reduced by 320,000 (200,000 miles) and will considerably increase the City's share in public transportation. In addition, the tunnel will improve medium- and long-distance travel as well, creating better connections to southwest Saxony, Leipzig's hinterland, and the New Fair Grounds in the north of the city. The new axis also benefits the high-speed train service from Berlin to Munich, via Leipzig and Nuremberg.
The service and trade industries have rebounded somewhat as well over the passed two decades, as the New Leipzig Fair (Neue Messe) best exemplifies. Being the home of Mitteldeutscher Rundfunk (MDR) Central Germany Broadcasting or MDR), Leipzig also ranks second in the states of the former East Germany after Berlin in terms of important centres for TV broadcasting and administration. Furthermore, research and innovation have also seen large investments in recent years, with the establishment of BioCity Leipzig and Fraunhofer-Institut.
In addition to those mentioned above, Leipzig's beneficial location factors include the city's improved quality of housing, standard of living, and the wide range of cultural, sporting and recreational facilities. Nevertheless, the current situation in the labour market continues to be cause for concern. The unemployment rate remains stubbornly high around 15 percent in 2010. The addition of jobs in the service industry has not compensated for the massive loss of industrial jobs in the 1990s.
Urban Development Plan - Industrial Spaces
In 1996, the Urban Development Plan Industrial Spaces was developed with the aim of improving existing commercial spaces and preparing new locations for the requirements of new development. Area IDs and the "business location information system" database (GEFIS) were introduced as marketing tools for business locations.
The current version of the plan states that Leipzig possesses large supplies of high-quality industrial spaces, which are able to be quickly redeveloped. With the redrawing of municipal administrative boundaries in the 1990s, the rate of space that has been made available after 1990 increased nearly 50 percent. In total, there are 2,250 ha (over 5,500 acres) of industrial space available in Leipzig. In addition, there are another 545 ha (1,300 acres) reserved as middle- and long-term development spaces.
Tools and Methods
The conventional tools and methods of urban development and land use, such as zoning, have lost some of their significance for the development of commercial sites. At the same time, cooperation between public and private actors has become increasingly important. Therefore, the Urban Development Plan - Industrial Spaces limits and directs the spatial focus and location-related marketing of the Economic Development department to foster cooperation and direct the flow of still-indispensable subsidies.