Not enough top innovators among German SMEs

Even though 84% of all German companies started innovative projects over the last three years in order to stay competitive and most of them are determined to keep doing so, many companies have problems in commercially exploiting their innovative product ideas. This fact was recently revealed by a study named “Zukunft gestalten im globalen Wettbewerb – Innovation als Erfolgsfaktor im Mittelstand” which was conducted by the “Unternehmer Perspektiven” initiative set up by Commerzbank.

The study showed that although entrepreneurs rank Germany in third place behind the USA and Japan with regard to attractivity in terms of production site factors, they nevertheless think that Germany is at risk of losing ground as far as its innovative potential is concerned. One of the study´s most important findings is that in particular on mature markets most companies are concentrating too much on things such as lean production and management instead of investing in new ideas and new markets.

The innovative elite, on the contrary, focuses on external know-how, innovation friendly corporate identity and space for creative ideas. The innovation leaders engage in R&D, develop their ideas into products suitable for commercialization and plan steadily increasing investment. Most of these leaders operate in the processing industry, wholesale trade and the service sector. Furthermore, most of the time top innovators are companies organizing themselves in networks. They also co-operate with external research institutions, suppliers and bulk purchasers thereby benefitting from public financial support made available to networks and clusters.

Among the obstacles to innovation are also lacking financial resources. The majority of companies surveyed criticize the way financing works in Germany. Thus, it is a fact that the smaller a company is, the bigger are the financial obstacles to innovation it is confronted with. In particular small enterprises lament a very limited access to public financial support and a lack of sufficient financing sources. In addition, more than fifty percent of companies questioned are cofused by new requirements in terms of transparency and reporting.

While innovation winners benefit from the scientific environment, in particular small and medium-sized entities in Germany do not have sufficient access to scientific institutions. But even major enterprises are faced with similar problems: 34% of companies with an annual turnover of at least 100 million Euros and doing research are considering to transfer their R&D departments abroad in future. For 94% of companies surveyed the availability of qualified staff on regional labour markets is an important or very important factor. However, only 29% of them are satisfied or very satisfied in this respect. Much more than public financing it is the scientific environment which decides whether innovative companies relocate or not.

In the course of the study in question the TNS Infratest questioned 4000 German companies with a minimum turnover of 2.5 million Euros. Further information is available from the initiative´s website. The study itself can be downloaded here. GERMAN