Digital Entrepreneurs

Bosch Boss Calls for German Innovation Alliance

Franz Fehrenbach wants an innovation pact for Germany.  Source: Handelsblatt/Andy Ridder
Franz Fehrenbach wants an innovation pact for Germany.
  • Why it matters

    Why it matters

    Germany missed the boat on the Internet economy. But it can still lead hi-tech breakthroughs in essential industries such as automotive and engineering.

  • Facts

    Facts

    • Berlin’s growing start-up scene is recognized in Silicon Valley and attracts international talent.
    • Weconomy is an entrepreneurial forum in Germany, bringing seasoned managers and business greenhorns together.
    • The southwestern German state of Baden-Württemberg, where Bosch is headquartered, has established a company start-up fund of over €20 million ($25.87 million).
  • Audio

    Audio

  • Pdf

Franz Fehrenbach never tires of the views at House Heidehof in southern Germany, home to the Robert Bosch foundation which was founded in 1986. From here, you can see all the way down to Stuttgart in the valley below.  The inventor Robert Bosch, who founded the eponymous company lived next door to House Heidehof. So it’s an appropriate place to speak with the supervisory board chairman of the engineering and electronics company about the state of innovation and entrepreneurship in Germany.

 

Handelsblatt: Mr. Fehrenbach, you spent your entire career in a company with defined rules and fixed procedures. What fascinates you about start-ups – companies that are more free-wheeling?

In almost 40 years with Bosch, I always felt like an entrepreneur. I always acted as I would if I were the owner of Bosch. I am constantly impressed when I see the panache and creativity in the way young businessmen and women approach things. This dynamic can also be found in large organizations, although the greatest enemy of progress in corporations is how bureaucracy slows things down. That’s why large companies often take new ideas and build separate, independent departments for them – internal start-ups, so to speak.

What can corporations learn from Internet companies?

Creativity and being open for new ideas. Thinking outside the box. Major corporations have functioning processes. On one hand, that’s a big advantage, for example, in product quality. On the other, it can hinder new ideas.

Events like the global innovation program, Weconomy, bring seasoned managers and business greenhorns together. Should there be more of these?  

Certainly. In addition to Weconomy Weekend, we will organize three workshops a year for young businessmen to meet experts from established companies. They will all work together on subjects that can best and most quickly advance start-up companies.

The major platforms on the Internet are dominated by the Americans. And we shouldn’t believe we can change it. For Germany, that ship has sailed.

Europeans have complained for some time that the Internet is dominated by Americans. How do you see the balance of power?

The major platforms on the Internet are dominated by the Americans. That is a fact. And we shouldn’t believe we can change it. For Germany, actually, that ship has sailed.

You are talking about giants like Google, Amazon, Facebook and Apple. What possibilities remain for the outmaneuvered Germans there?

We now have a huge opportunity in digitalization, especially in cross-linking and connecting hardware to software. That’s where Germany can lead technology breakthroughs in essential industries such as automotive and engineering. We have to link these industries to start-ups that until now have been primarily active in IT and telecommunications.

Do you see a new alliances?

Yes. In Germany need a pact between established corporations, medium-sized companies and start-ups to find digital solutions together.

Do you believe California’s Silicon Valley is leading the way in that transition?

That region is the high-tech capital of the world. They have succeeded in creating a climate that fosters audacity and accepts failure as part of the innovative process. And universities support market innovations by bringing academic and entrepreneurial thinking together.

At least Germans have an emerging start-up scene in Berlin. Or is that a myth?

No. We should be happy in Germany that we have the Berlin start-up scene. It’s the only German city where even Silicon Valley says things are happening. And it is the German city that draws international talent.

We now have a huge opportunity in digitalization, especially in cross-linking and connecting hardware to software. That’s where Germany can lead technology breakthroughs.

Do you think, start-up founders are ready and willing to enter into partnerships with major corporations in Germany?

I have heard founders in Berlin say: “Software is everything; technology is out.” Recently at an entrepreneurial event, an industry representative was almost desperately trying to convince (some start-up founders) that a gas turbine actually requires sophisticated technology. He didn’t stand a chance. Many founders are conspicuously one-sided. But I also detect a change in that perception in the scene in Berlin. The talk there now is mostly about Industry 4.0 and promoting computerization of traditional industries.

Would tax incentives help?

Certainly. As a matter of principle, research and development should be promoted by tax incentives. The last governing coalition had it in their program but it wasn’t implemented. Now it isn’t even in the program.

Is there too little venture capital in Germany?

There are a lot of differing statistics on that. Investments in start-ups have declined in the first half-year. Some experts say that’s a normal cycle. Many investment budgets have run out. We are just on the edge of the next new upswing. I keep hearing that there’s enough money available for great ideas. Not only that − the federal government’s new high-tech strategy places a clear emphasis on start-ups. The state of Baden-Württemberg has just established a company start-up fund of over €20 million ($26 million). That’s rather modest, but it’s still laudable and can always be pumped up. But at the same time computer science is being cut from the school curriculum and being replaced with media studies, a subject dealing with digital media.

Media studies is no doubt also important. Perhaps both could be offered?  

In Estonia, primary school students are already learning computer programming. In the long run, it won’t be enough in Germany to understand how to use our smartphones and tablets without understanding how the devices actually work. It’s a matter of understanding technology and not just how to use it. That’s where Germany is lacking. An integrated concept for promoting the start-up scene is missing. Instead, there’s a steady stream of new measures.

Mr. Fehrenbach, thank you for the interview.

This article was translated by David Andersen. The interview was conducted by Jens Koenen and Hans-Jürgen Jakobs. To contact the authors koenen@handelsblatt.com  and jakobs@handelsblatt.com 

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