When Place Becomes an Industrial Advantage

In 1921, Paul Schwarzkopf was looking for somewhere to expand his metals business outside Berlin. Producing tungsten and molybdenum required large amounts of energy, and the cost of expanding production in Berlin had become prohibitive.

An advertisement drew his attention to inexpensive electricity from the hydroelectric plant at Lake Plansee. Schwarzkopf travelled to Reutte in Tirol and decided to establish the new business there. It was not an obvious industrial location. Transport and telephone connections were poor, and the region had too few skilled metalworkers for what he wanted to do. He acquired land in neighbouring Breitenwang, where production began in 1922.

The shortage of skilled people became something the company had to solve for itself. Apprenticeship and in-house training were priorities from the beginning. Plansee established its own vocational school in 1939, later supported technical education in the wider region and opened a new training centre in 2020 with room for as many as 240 future skilled workers.^[1]

A century later, the relationship between Plansee and Reutte looks very different from the one Schwarzkopf encountered. The company originally came because the place offered one thing it needed: energy. Over time, Plansee helped build some of the capabilities that were missing when it arrived.

Sometimes a company inherits the advantages of a place. Sometimes it helps build them.

Skills do not stop at the factory gate

A machine can be bought. A production hall can be built. A technically capable labour market takes longer.

Austria's vocational system is important here. In 2023, 68.9% of upper-secondary students were enrolled in vocational programmes, one of the highest proportions among OECD countries. Around 27,000 Austrian companies are authorised to provide apprenticeships and form part of the country's formal vocational education system.^[2]

An apprentice learns on real equipment alongside people who have been doing the work for years. Some remain with the company that trained them. Others eventually move to another manufacturer nearby. A supplier becomes particularly good at a difficult process because several customers keep asking for it. A technical school continues teaching particular skills because local employers still need them.

No single company owns all of this knowledge once it starts to spread.

Northern Italy provides another version of the same pattern. Veneto formally recognises 17 industrial districts built around geographic concentrations of manufacturing and craft businesses, predominantly SMEs operating in related production chains. They include mechanical engineering in Alto Vicentino, eyewear around Belluno and technical footwear and sporting goods around Asolo and Montebelluna.^[3]

The companies remain independent, but they recruit from overlapping labour markets and draw on many of the same suppliers and skills. For an owner assessing one company, some of this is easy to miss. The business does not own the technical school, the neighbouring toolmaker or the experience sitting in the wider labour market. Those things can nevertheless affect how easily it hires, solves production problems or introduces a new product.

A small place can serve a very large market

The customers are often somewhere else entirely.

Vorarlberg has a population of only around 400,000, yet businesses in the region exported €13.2 billion of goods in 2025. Its export quota was 57%, with Germany, Switzerland and Italy among its most important markets.^[4]

That outward orientation makes sense in specialist manufacturing.

A business making an everyday product can find a large number of potential customers in a sizeable domestic market. A company making one component for a particular machine, a safety-critical fitting or a specialised production tool has a narrower universe of buyers. They may be excellent customers. They are simply spread across several countries.

The company's commercial world can therefore become international while much of the knowledge required to make its products remains concentrated around one site.

Salespeople may spend their time in Germany, France, the United States or Asia. The people who know what happens when a particular material is machined too quickly may have spent their careers within twenty kilometres of the factory.

That combination is fairly common in specialist industry. A company may depend very little on its immediate surroundings for revenue while relying on them considerably for people, suppliers and practical knowledge.

What accumulates in a place

Fulpmes in the Stubai Valley developed differently from Reutte.

Metalworking there can be traced back centuries. The first documented forges date from the fifteenth century, and over time the valley's iron goods were sold well beyond Tirol. A specialist school for iron and steel processing was established in Fulpmes in 1897, and metalworking is still taught in the valley today.^[5]

AustriAlpin grew out of that setting. In 1996, four family-run craft businesses came together to create the company. It now employs around 110 people and manufactures roughly 98% of its products in Fulpmes while selling internationally.^[5][6]

It would be too neat to draw a straight line from a fifteenth-century forge to a modern safety buckle. Technologies disappear, businesses fail and skills change. What matters is that people keep working on related problems.

AustriAlpin gives fairly practical reasons for maintaining production in Fulpmes, including flexibility, short transport routes and the ability to maintain its quality standards.^[6]

A buyer would want to go further than that.

How difficult are particular employees to replace? Which suppliers solve problems that rarely appear in a purchasing report? Does the technical school make recruitment easier? How much useful discussion takes place between product development and production simply because the two are close to one another?

There is a question we think is particularly useful when looking at businesses like this:

What would this company lose if it moved 200 kilometres away?

For some businesses, the answer may be surprisingly little. Buildings can be replaced. Machines can move. New suppliers can be qualified.

For others, the list becomes longer the more closely you look. A senior machinist knows which setup tends to cause trouble before the measurements show it. A nearby toolmaker can repair something by the following morning because the two businesses have worked together for twenty years. An apprentice arrives already comfortable in an industrial environment. An engineer can walk onto the production floor when a prototype behaves differently from the drawing.

These are ordinary operating details. Taken together, they can be difficult to reproduce.

Two similar factories may not be equally movable

Consider two manufacturers with similar revenues, equipment and financial performance.

The first has well-documented processes. Its skills are widely available. Suppliers are interchangeable and most of its engineering can be separated from production without much loss. Moving the factory would be expensive and disruptive, but the underlying capability could probably be rebuilt somewhere else.

The second looks similar in the accounts. But several production employees have been there for twenty years. A group of specialist suppliers sits nearby. Apprentices arrive through an established local training system. Engineers, toolmakers and production staff solve problems informally because they have worked together for years.

Moving the second factory means moving the machinery and then discovering which of the other things do not move with it.

They are not the same company.

The same issue appears in less dramatic decisions. Consolidating suppliers, centralising a function or replacing someone whose role looks straightforward on an organisation chart can disturb capabilities that are not obvious until they are gone.

The useful question is what the existing arrangement is actually doing.

Place is not sacred

None of this is an argument for keeping everything local.

A long history in one town does not make every supplier good or every process sensible. A remote location can restrict recruitment. Housing can become difficult for younger employees to afford. The local skill base can shrink or become poorly matched to new technology.

These are real issues across the Alpine region. EUSALP's current work on labour, education and training includes efforts to improve skills, encourage vocational mobility and make Alpine employment more attractive as part of its response to depopulation. The Alpine Space programme is separately examining youth out-migration from Alpine communities and the loss of qualified people that can follow.^[7]

Manufacturing has its own version of the problem. The RECENTRE programme, focused specifically on Alpine manufacturing SMEs, identifies skills gaps and the need for workers to adapt to increasingly digital and technologically advanced production as companies invest in automation, AI and other new technologies.^[8]

A company cannot respond to those pressures by treating everything that already exists as untouchable. Sometimes production should move. A supplier should be replaced. A process should be automated. New skills may have to come from outside the region.

Consider the same problem from another angle. A supplier may simply be expensive, or it may carry practical knowledge that never appears in the contract. A factory may occupy unnecessarily costly land, or it may sit at the centre of a labour market the company spent decades helping to create.

You cannot tell from the postcode.

What this means for ownership

When we look at an industrial company, we naturally start with the business itself.

Its products, customers, people, machines, processes and financial performance all matter. Good companies still need good products, sensible management, investment and people who know what they are doing. Being located in Tirol, Vorarlberg, Lombardy or Baden-Württemberg confers no automatic advantage.

But the legal boundary around a company can give a misleading impression of where all its capabilities sit.

Some may be carried by people outside it. Some by suppliers. Some by a local training system or a labour market that developed around several related businesses. Those relationships can be valuable without being permanent, and longstanding without necessarily being valuable.

For a new owner, understanding the difference takes time.

Before centralising purchasing, understand the suppliers. Before changing the production footprint, understand where the skills sit. Before dismissing an unusual practice as inefficient, find out why it developed.

Some of that work will identify things that should change. It may also uncover strengths that were difficult to see from outside.

That is part of what draws us to specialist industrial businesses in the Alpine region. We want to understand what the company has built, what has developed around it and what would take years to recreate if it disappeared.

The mountains are the most visible part of the region.

They are not the reason we are here.