LEIPZIG has attracted some of the business world’s biggest companies – but it is now seeking to develop its SME sector in a bid to grow and future-proof its economy.The city, in eastern Germany, is home to Porsche, BMW, DHL and Amazon. But it is seeking to tempt smaller firms to relocate or expand into the city, and grow indigenous businesses.It’s all part of a long-term plan to reduce unemployment, still at about 10 per cent, boost population by 50,000 to 600,000 by 2020, increase the city’s cultural draw and consumer spend, and create a safety net should any of the large employers suffer a setback.

Lutz Thielemann is managing director of Invest Region Leipzig (IRL), the business development agency set up just last year with a 1.7million-euro budget and a brief to market the city and its region, Saxony, attracting employers and skilled workers to make the city, region, and ultimately the German economy stronger.

“We are not out to attract large companies, our objective is to attract smaller or mid-sized firms, 200 to 1,000 employees,” said Mr Thielemann. “And particularly from the southern areas of south-western Germany.”

Mr Thielemann said the idea is to persuade German businesses to expand in another region of Germany, rather than being tempted by low costs to relocate or develop in other eastern European countries.

His agency – a limited company operated by the city of Leipzig, Leipzig Chamber of Commerce and Industry, and the district authorities of North Saxony and Leipzig – is doing this by highlighting the lower costs associated with eastern Germany, for instance land and salaries, but also the cultural and environmental benefits of remaining in a picturesque, German-speaking, location.

And a 30 per cent state subsidy on investment costs doesn’t hurt either, nor does financial support from the federal and state governments, and the EU, to support new, job-creating, small and mid-sized businesses.

Leipzig also trumpets its transport links to cities such as Berlin and Hamburg, and those in eastern Europe, facilitated by good roads, and a huge railway station and airport, centred on freight.

IRL is working to boost key sectors including automotive, logistics, media and creatives, the food industry, energy and the environment, the chemical industry, healthcare and biotech, commerce and ecommerce and engineering.

“We get in touch with companies and make them aware of the opportunities,” Mr Thielemann said. “We highlight low costs for land and labour, brand new infrastructure, a 24-hour airport, and a growing city linking to the west and east, based on a legacy of co-operation. Our message is to explore this industrial area, its potential for economic growth, before moving to, for instance, Bulgaria, Romania or the Czech Republic.

“We want to keep mid-sized companies in Germany.

“And small to mid-sized companies would make us more independent from the big employers,” he added. “We can’t rely on investment from multi-national companies.”

Mr Thielemann said it is also important to attract skilled workers, from Germany and abroad.

“People are getting older and we need new, inspired, well-qualified people,” he said. “We’re going to Poland and the Baltic states to attract people, where there is still relatively high unemployment.”

But he insisted the challenge was to create better-paid jobs, that would boost the city’s economy in the long-run.

“We need jobs for the well-trained,” he said. “These are the people we are trying to attract.”

Using methods ranging from direct mailing to press publicity, IRL is even planning a “world market leaders congress” to promote the city and create a networking opportunity for “strong German companies” and others from eastern Europe.