THREE HOURS SOUTH of Berlin, tucked in an industrial park off a major highway near Dresden, lies the new headquarters of Roth & Rau, a solar technology exporter. It exemplifies what's driving the New Germany.
Three physicists from the Chemnitz University of Technology started the firm in the late 1990s after tiring of waiting for their former East bloc school to restructure. So they broke out. In 2000 they put together 40 workers and $3 million in sales. Today the firm employs 1,100 and does nearly $300 million in sales, mostly to Asia. Their glass-paneled headquarters, sitting on a hill with a vista of rolling terrain, looks like a modern Oz, something out of Silicon Valley rather than the former rusty East.
Typically, and crucially, what the Roth & Rau physicists found was a niche. They don't make solar panels. They went far narrower: They've refined the coating requisite for the silicon wafers in solar panels, and developed it into a conductive film that gets 16 percent more electricity out of the transaction between sun and panel. Chinese firms are enamored of the process (a delegation was on the factory floor as I toured operations), and Roth & Rau spiked exports to the Middle Kingdom by 75 percent last year.
The company's approach to business, and the world, helps explain Germany's rise as a 21st-century economic power. It isn't so much that Roth & Rau are dealing in an industry of tomorrow, though that doesn't hurt. It's the way the firm is doing it.
Overall, Germany spent $120 billion a year in the 1990s to unify the country and rebuild its infrastructure, training its sights on the global marketplace. That helped it pull away from the rest of the EU. Forty percent of Germany's exports now go to the so-called BRIC countries (Brazil, Russia, India, and China). The closest EU competitor ships less than 10 percent. German machine-tool exports alone spiked 128 percent between 2009 and 2010. The unemployment rate in Germany hit an 18-year low last fall – 7.5 percent.