Precision Producers

In Germany, Land of Inventors, Disruptive Businesses Remain the Exception

  • Why it matters

    Why it matters

    To thrive as new technologies upend business models, managers must bring inventions to market much more quickly.

  • Facts

    Facts

    • Annual study shows the industries of Japan, the United States and Germany still rank among the world’s most innovative.
    • Differences are the pace of application of new, disruptive technologies.
    • If completely new markets arise, Germans often have difficulty in radically shifting business models.
  • Audio

    Audio

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Vladimir Lenin once said that before German communists occupy a train station, they quickly buy a train ticket. Our capitalists behave similarly: German companies are among the most innovative in the world, but they balk at the quick application of new, disruptive technologies. Or put another way: We are gifted innovators, but no revolutionaries.

That is also the conclusion of the latest “Global Innovation Barometer,” an annual study by the American multinational conglomerate General Electric. The study is based on a survey of more than 3,000 managers in 26 countries. The industries of Germany, the United States and Japan hold up in the rankings as the world’s most innovative.

The differences among them appear mainly in the speed with which inventions become new products.

Contrary to what many believe, the Japanese still react the most quickly. The authors of the GE study described them as “innovation sprinters.” About 71 percent of Japanese managers strive to push new products as quickly as possible onto the market.

We are gifted innovators, but no revolutionaries.

In the United States, companies also bet on speed. To see it, one must only look at Silicon Valley’s success.

In Germany, on the other hand, only 41 percent of surveyed managers believe in the advantage of high speed for the implementation of inventions. Germans are “innovation perfectionists,” the study’s authors said.

Both attitudes have pros and cons. The constant improvement of products – for this the best example is the German auto industry – guarantees satisfied customers and higher profits over the long term. German companies comprehend the concept of increasing market share step by step.

However, if completely new markets arise, we often have difficulty in radically shifting business models. The best example is the Internet economy. The courage of venture capitals is more likely found in Asia and the United States than in Germany.

On the whole, Germany is to date faring well with its strategy. The question is: Does that also apply for the future? Our key industries up to now – auto, mechanical engineering, equipment – are facing an era of new disruptive technologies. Electromobility, industry 4.0, big data – those are all keywords of an enormous challenge to current business models.

Therefore, we won’t be able to avoid increasing the speed of innovation. Or to stay with the jargon of the GE study: German managers must become sprinters, while remaining perfectionists.

Bernd Ziesemer is a journalist and a former editor in chief at Handelsblatt. He can be reached at: gastautor@handelsblatt.com

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