Germany – Case study 2: Hof

Hof is a regional centre located in Upper Franconia (Oberfranken) region of Bavaria close to the borders with Saxony and Czech Republic (formerly Bohemia). In 2017, its population was approx. 46.000 inhabitants.

Population development and demographic change are currently the main challenges for the whole region and the city of Hof as well as the enterprises located in the region. The peak of population in Hof was already reached in 1950 (61.033 inhabitants) when expellees from former German areas in Poland and Czech Republic still lived in the city. Since then the population shrank until its lowest point in 2014 with 44.325 inhabitants. In the last years, a slight increase of the population numbers can be seen due to the international migration and a growing number of students at the University of Applied Sciences. However, current forecasts predict a further shrinking and ageing of the population in the next years.  


The city was established 800 years ago; by 1850s it was one of the leading centres of textile production. It benefited from its good railway connections to both Bavaria and Saxony, its small scale enterprise structure as well as export orientation of its manufacturers. Then, manufacturing (especially weaving) was based at homes, and was only replaced by larger factories by the beginning of the XX century.

After the end of World War II, the Iron Curtain cut the region of Upper Franconia from its economic connections to Saxony and Bohemia with considerable impact on the supply of resources to the region and the loss of their sales markets in these regions. Hof was suddenly located in a geographical periphery and, additionally, had to integrate a great share of German expellees from Czechoslovakia and Poland in the society and economy. The governments of the Federal Republic of Germany and Bavaria responded to these problems with a range of funding measures (the so-called  “Zonenrandförderung”) as specific subsidies for longer transportation routes, tax deductions, prioritisation of regional economic development and subsidies for cultural measures. 

Despite these challenges the region developed until the 1950s to one of the most industrialised regions in Bavaria. In 1951, 123.000 people were employed in manufacturing industries compared to a total population of 1.114.000 inhabitants. At this time, the region was dominated by the textile and fashion industries (particularly in and around Hof; in total 56.000 employees in 1956) as well as porcelain industries (in the areas close to the Czech border around Selb and Marktredwitz). Both branches benefitted considerably from the increased consumer demand during the “Economic miracle” in Germany and the disappearance of competitors from East Germany behind the Iron Curtain (especially the porcelain manufacturers in Thuringia were strong competitors before World War II).

Structural change – from 1970 to 2000

Since the 1970s both branches, textile as well as porcelain, faced several crises which ultimately led to considerable shrinking processes that continued into the 2000s. For the city of Hof, textile played (and still plays) a far greater role than porcelain. After the success in the 1950s, the branch soon had to compete with increasing imports first from Western Europe and later from the socialist countries in Eastern Europe and the newly emerging Asian competitors. Low productivity and decreasing exports led to the closure of numerous firms and a concentration of the remaining ones. In the whole of Bavaria, employment rates and revenues in the textile sector decreased continuously until 2010.

However, Upper Franconia and Hof remained a centre of textile production, albeit with a different specialisation. Manufacturers soon focused on technical textiles and nonwovens as well as fashion accessories (e.g. scarfs) and decoration materials promising higher revenues than traditional textile products and fashion.

The German reunification in 1990 and the fall of the Iron Curtain offered new opportunities for Hof and Upper Franconia. Once again, they are at the crossroads between Western and Eastern Europe leading to the development of a strong logistics sector. Regional enterprises could also find new sales markets. However, the political change also entailed economic risks. The close connection to the post-socialist countries with lower income levels and production costs led to the transfer of firms and capital to these countries. The specific funding schemes for border regions (the above mentioned Zonenrandförderung) expired and funding was predominantly channelled to the new Eastern German states. The decreasing dynamic in the economic sector (new enterprises were rarely founded) was accompanied by considerable out-migration of young- well-qualified people. Consequently, regional policy debates since the 1990s centred about the on-going demographic change, out-migration, connections to global value chains and new funding schemes for the region.

Hof and Upper Franconia in the 21st century – on the way to an innovative region?

University of Applied Sciences; Source:
University of Applied Sciences; Source:

Already in 1994, the University of Applied Sciences Hof was founded to support economic development of the region. The study programmes in computer sciences, engineering sciences, and economics reflect regional economic structures (e.g. textile production, logistics, material sciences with a focus on automotive suppliers, information sciences, etc.). The university focuses on interdisciplinary, practice-oriented research and follows an internationalisation strategy with a focus on India as well as Eastern Europe. The University of Applied Sciences is a central element in the development strategies of the city and the region and an important cooperation partner for regional enterprises.

Structurally, the region is marked by its high amount of small and medium-sized enterprises. Main branches are textile industries, digital industries, water, energy and environment technologies, logistics, and the service sector with a number of call centres and back offices. These branches are supported by the city and the regional marketing “Hochfranken” and gain growing attention on Bavarian and national levels. The infrastructure has been developed during the last 20 years offering now good motorway connections to Southern and Central Germany, as well as to Czech Republic. The railway system will be also strengthened within the next years offering good conditions for the growing logistics sector.

Photo: Andreas Rau, Source:
Photo: Andreas Rau, Source:

Hof is increasingly engaged in the intraregional collaboration of Upper Franconia with other regions?. The city of Hof is member of the metropolitan region of Nuremberg and collaborates in the economic region of “Hochfranken” with the district of Hof and the district of Wunsiedel. The term “Hochfranken” has been created mostly for marketing purposes and is still viewed within the region as an artificial construct with low identification levels in the population. However, regional enterprises consider “Hochfranken” as a suitable tool to attract qualified employees to and keep them in the region. This entails also the improvement of housing and the support of the region’s and city’s rich cultural life.

The main cultural institutions in Hof are the theatre and orchestra, the festival “Hof film days”, the event hall “Freiheitshalle” and one of Germany’s most beautiful parks Theresienstein. These institutions are complemented by a number of socio-cultural organisations using partly former industrial buildings for their purposes.