Corona time challenges Jena as a business location in many ways

How is Jena getting through the coronavirus pandemic as a business location? What are the biggest challenges for companies? And how is the aid being received locally? In order to answer these and similar questions in a differentiated manner, the Jena Economic Development Agency (JenaWirtschaft) and the Chair of Economic Geography surveyed Jena companies and self-employed people in April and May. Around 420 companies and business people from a wide range of economic sectors took part in the survey. The main finding: Jena's industries are affected very differently by the impact of the coronavirus pandemic. While companies in the high-tech and manufacturing sectors are mainly struggling with declining turnover and sales losses, some of Jena's restaurants, event industry and similar service providers are facing the existential abyss. Overall, however, the business location is well placed to recover.

"The survey paints a differentiated picture," says JenaWirtschaft Managing Director Wilfried Röpke."The manufacturing industry and the high-tech sector seem to have come through the crisis with a dark blue eye; they were able to continue working relatively well despite problems with sales and the often international supply chains. Over 60 percent of Jena's high-tech companies also stated that their turnover remained the same or even increased in April.

In contrast, the survey confirms that the shutdown has led to major economic damage, particularly for local service providers - hotels, restaurants, the event industry, retailers and many more; many are on the brink of collapse.For example, 35% of all catering businesses surveyed stated that they were considering insolvency or closure before the end of the year. According to Röpke, it is particularly the small stores, pubs and restaurants, cultural and leisure facilities that make up Jena's diversity:

"The local quality of life is a very important soft location factor for Jena, even beyond absolute monetary tax revenues or employment figures for this sector of the economy."

In addition to the general uncertainty about the global economic situation, companies and self-employed people named the lack of work-life balance as one of the biggest challenges during the coronavirus crisis.

"We need more flexible solutions here so that we can ensure that working parents with young children can remain operational at all times," said Röpke. Especially in view of the fact that it is currently unclear how the infection rate will develop.

In addition to the emergency aid measures from the state and federal government, the federal government has launched a comprehensive economic stimulus program. Prof. Sebastian Henn, holder of the Chair of Economic Geography at FSU Jena and member of the Thuringian state government's Corona Advisory Board, is generally positive about the package of measures. However, according to the interviewees, there is room for improvement in the long processing time and the payment modalities.

"In Jena, there was mainly demand for two instruments: the emergency aid for the self-employed and companies with up to 50 employees and the short-time working allowance. By the end of May, the Thüringer Aufbaubank had paid out a total of 14.9 million euros to 2,105 applicants from Jena." Other instruments, such as liquidity assistance and bridging loans, are often not a sensible option for individual and small companies due to the credit conditions and great uncertainty, according to Henn. But: "Emergency aid does not protect against insolvencies and unemployment in the medium and long term." It is important for Jena as an employment location that the instrument of short-time work works in order to secure jobs in the long term. "Although the unemployment rate in Jena rose to 5.9 percent in May, the figure is still well below the national increase," said Henn. This speaks for Jena's resilience - i.e. relative crisis resistance or resilience - as a business location.

Although over 40% of companies in Jena reported short-time working in April and May, the coronavirus pandemic will not put an end to the much-cited shortage of skilled workers, according to economic geographer Henn: "Unemployment will fall again and companies will have to counter the wave of retirements among their own workforce over the next few years." International skilled workers in particular could close the emerging gap - but this also requires a corresponding welcoming culture in Jena.

"In the medium and long term, all companies - from solo craftsmen to small corner stores to high-tech companies - must urgently address the question of how they can make profitable use of digitalization," says economic geographer Henn.

At the moment, the answer to this question is still very sector-dependent: Only around a fifth of business people surveyed in the retail sector, for example, currently rate digitalization as an opportunity for their company.

And how does the business location as a whole look to the future? Wilfried Röpke remains confident, provided there is no return of a second major wave of the COVID-19 pandemic:

"Jena had a healthy, powerful and innovative economy before the pandemic broke out- industry and the high-tech sector were and are central to this - optics and medical technology, but also services, the digital economy and skilled trades. The companies in these sectors generate a high gross value added. Thanks to this economic structure, Jena has the potential to recover economically relatively quickly."

The survey also shows how much confidence companies have in Jena as a business location: around three quarters of all local companies stated that the business location will be just as good or even better than before after the pandemic.

The results of the company survey can be found at www.jenawirtschaft.de In order to record the situation of companies in other parts of Thuringia, the survey is currently also being conducted in Weimar, Gotha and the districts of Greiz, Saale-Holzland-Kreis and Weimarer Land.