Jena High-Tech Center Strives for Global Role

Article excerpt

A new high-tech center is being built on the ruins of East Germany's Carl Zeiss, once considered the most powerful technology conglomerate in the former Soviet empire.

In its heyday, the state-owned "Kombinat" with a workforce of almost 70,000 churned out an impressive assortment of high-tech products, ranging from precision instruments and cameras to lasers and electronic components for spy satellites. It also developed the first East German 1-megabyte chip, though at a huge expense.

Today, having lost its major export markets in the former Soviet Union and East bloc, Zeiss is the target of an ambitious $2.4 billion German government plan to create a technology region out of its ruins.

But the plan, experts agree, is not without its challenges. For one, Zeiss and Co. faces stiff competition not only from the Japanese and Americans but also from other German technology giants, notably Siemens AG and Daimler-Benz AG. Nor is it clear how long the Bonn government--severely strapped for cash--will be able to subsidize the effort.

Early last year, the German Ministry for Research and Development approved a multi-billion-dollar plan to finance new technology-oriented startups and to create 15 high-tech centers in the east. Of these, the Jena high-tech park, where Zeiss was established over 100 years ago, is by far the largest and most ambitious. And for good reason: a huge reservoir of expertise remains in the area, following the loss of almost 60,000 jobs at Zeiss.

After the Second World War, Zeiss was broken up into two halves. Worried about growing Soviet intervention in the region, the U.S. government enlisted 127 top Zeiss scientists and managers from Jena to relocate in Oberkochen near Stuttgart, where they were asked to establish a western counterpart. From that day in June 1945, until the fall of the Iron Curtain in November 1989, Zeiss east and west were engaged in a bitter battle to determine which was the rightful heir.

That contest is now ended. Both sides have compromised on the use of the name by roughly dividing markets between east and west and by dropping overlapping production. Zeiss Oberkochen, which has a 51 percent stake in Zeiss Jena, has been quick to restructure its eastern half, focusing on traditional product lines and cutting the workforce to around 3,000.

The thousands of well trained "Zeissianer" and the numerous plants shed from this major restructuring form the basis of the Jena high-tech center. One of the first enterprises to rise from the remains of the former East German Zeiss Kombinat is Jenoptik GmbH, which was launched last November. Still fully owned by the state of Thuringen, Jenoptik will eventually be privatized. The company controls 49 percent of Zeiss Jena.

If it succeeds, Jenoptik would help rejuvenate the region and show that former East Germany industry can be fertile ground for launching globally competitive companies.

A major force behind the technology drive in Jena is Lothar Spaeth, the outspoken former prime minister of Baden-Wuerttemberg. In less than two years, the business-minded politician has been instrumental in creating over 130 small and medium-sized technology companies, including Jenoptik, in forming several joint ventures, notably with Deutsche Aerospace AG (Dasa) and Rheinmetall AG, and in attracting significant direct investment from the west.

EUROPE'S SILICON VALLEY?

Under the guidance of this clever man--and with a little luck--Jena could someday become the Silicon Valley of Europe, observers say. The city, with a population over 100,000, boasts an independent research center and two universities, both strong in science and engineering. …

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