Out with the auld, it’s time to forge a new alliance
Scottish deeptech scale-ups should be looking to southern Germany, writes David Scrimgeour
When I came to live in Munich in 1991 the city had a reputation as provincial – a Millionendorf, meaning a village with a million people. Very little English was spoken here. The atmosphere was conservative and inward-looking, especially compared to Berlin, which was again Germany’s capital city. There were few international connections and my early efforts to generate business with Scotland and with Munich’s twin city, Edinburgh, had only limited success.
However, the seeds of the transition to becoming a leading European technology cluster and a centre for private equity were already evident with the presence of Siemens, BMW, Allianz and Munich Re. And the Bavarian capital was also host to two of Germany’s leading universities as well as the Fraunhofer, Europe’s largest applied research organisation.
It was arguably the ongoing inward investment in Munich by US technology companies such as Apple, Amazon, Google, Microsoft, IBM and Intel which accelerated the development of the city’s ecosystem. Apple, for example, started in 1981 with ten employees and now Munich is the company’s largest European engineering hub with over 2,000 engineers specialising in cellular technologies and chip design. Google has more than 1,000 employees here, with a global engineering centre focusing on security and cloud technology.
Now Munich is firmly established as one of Europe’s leading start-up centres of excellence. In the FT’s 2026 ranking of Europe’s 180 start-up hubs the first and second place are both in Munich, UnternehmerTUM and Start2 Group. Another Munich hub, Werk1, is at ninth place in the ranking. Since 2024 founders in Bavaria have attracted more investment than their counterparts in Berlin, with a total of €3.3 billion in 2025. Munich start-ups have received the largest funding rounds including drone manufacturer Helsing (€600 million) and biotech company Tubulis (€344m).
In recent years I have been involved in a number of Scottish initiatives and projects to tap into the increasing dynamism of Germany’s third-largest city including supporting company delegations in both directions and matching individual Scottish companies to potential partners. One success story is Edinburgh-based Machines with Vision, who are transforming railway maintenance with AI and robotics.
Following up on participation in an SDI trade mission to Munich in 2019 the CEO Anthony Ashbrook and his team have developed an extensive network of contacts in the German rail industry. Traditionally it has been difficult to succeed in Germany without establishing a legal entity, often a bridge too far for most British companies. The key for his company is ‘visibility’ in the market which he achieves by making four or five trips per year to attend relevant trade fairs and conferences to meet with his customers and to develop new business opportunities.
Historically, UK founders have preferred the USA for their first international expansion. Given the UK Government’s reset with the EU, especially Horizon Europe and Erasmus+, it is surely the right time for Scottish deeptech scaleups to take a closer look at what is happening now in the southern Germany.
David Scrimgeour MBE is an independent advisor to international clients on cross-border projects in the German energy sector. He is also a Foreign Direct Investment specialist having worked with city, regional and national governments in Europe and North America.
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