Geography and demography
Saxony covers an area of approximately 18,000 km² and has one of the most densely populated former regions of the ‘East Germany’, with an estimated 4.35 million inhabitants. It has been described as having “the largest economic growth, the second-highest amount of investments and the lowest debt increase - making Saxony the shooting star among the states of Germany.” In 2003, the region registered over 75 investment projects from German and foreign companies creating more than 3,800 jobs and investment close to 850M.

Economy
The region generates 3.6% of Germany’s GDP. Sachsen’s economy is dominated by the services sector. 69% of the labour force is employed in services, generating almost 70% of real gross value added. In economic terms, agriculture, forestry and fishing are of fairly minor signifi cance to Sachsen’s economy. Traditional branches of regional industry are mechanical engineering and vehicle construction, metalworking, electrical engineering, electronics and the food industry. Also very important are the finance, leasing and business services sector contributing for 26% to real gross value added. Saxony’s GDP is about EUR 80 billion, (Saxony contributes 32.4% toward the GDP of the eastern German states minus Berlin). Per capita GDP is EUR 17,774 (2003), higher than in any other state in the former East Germany. The region itself has a long history of mechanical engineering not only within the automotive sector (Porsche, BMW and VW) and electronic (AMD, Infineon & ZMD) sectors but also in the new and emerging technology sectors such as microelectronics, telematics, biotechnology, new materials, environmental technologies and process engineering. These areas have bought in a high level of innovative capability and experience and have provided the region with signifi cant change and growth in the last 10 years. This capability is applied to and supported by traditional sectors such as machine building and aircraft construction.

Labour market
There are 1,839,000 employees in the region. The unemployment rate is 18,3% of the active population (the female one is 18,50%). The employment rate is 46.40% (male employment rate is 55.50%, female 42.60%). The percentage of total employment in services sector is 69%, while 2.5% work in agriculture, and the rest in the industrial sector.

Research and development
The region spends 2.53% of its GDP in Research and Development (0.65% of Government investments and 0.62% of University investments). The inner strength of modernization and improvement of the economy of the region can be linked to the 50 R&D centres located in the Saxony, with no less than 11 Fraunhofer centres and 6 Max Planck Institutes both possessing an international reputation for providing services for either the public and/or private partnerships. The digital heart of the chip industry beats in Dresden. In Leipzig and Dresden researchers and young entrepreneurs work hand in hand in the fields of biotechnology and environmental engineering. The traditional “heart” of Saxony’s industry beats in the region around Chemnitz/Zwickau. Whether it be mechanical engineering or 100 years of “Autoland Saxony” - an industry rich in tradition has developed from smart ideas and intelligent solutions. Today, Saxony is a prime business venue for global players - Volkswagen, BMW, and Porsche, AMD and Infineon, NILES-SIMMONS-HEGENSCHEIDT, STARRAG, and GlaxoSmithKline. Saxony is Germany most dynamic federal state.