Last updateTue, 27 Jul 2021 1pm

More than just a buzzword

Innovations as a resource of the digital age
Once the reputation is ruined... To prevent the German corporate landscape from losing its positive image and being left behind by global players, the topic of innovation must be at the top of the agenda. Because innovations are more than just a buzzword - the future belongs to them.

Resting on one's laurels has brought many a person into trouble. "In these digitalised times, the German economy is just about to lose its good position. Because the attributes associated with the 'Made in Germany' seal will continue to have meaning in the future," warns Dr. Heiner Pollert, CEO of the Patentpool Group and first chairman of the German Institute for Inventions. Increasing standardisation, automation, batch size 1 and sharing economy - disruptive changes have been causing upheavals in the economy for some time now. In order to keep up, innovations must be encouraged. Both the emergence of innovative ideas and the concrete promotion of the resulting products or services should receive support. "Because in the future, the economic position of a company will depend on this new resource. For innovations to be able to bubble up as oil did decades ago, they need capital, knowledge and efficient networks," explains Pollert. "Too many technologies or brilliant ideas fail because of bureaucratic hurdles, lack of capital or lack of resources. Despite their increasing importance, their immense economic and social impact has not yet reached all organisations.

Innovation as an economic factor
Too often, German companies are still on well-trodden paths - courage and drive to build up a culture of innovation are required. Because this is the only way to secure competitive positions in the long term. So far, however, the companies that are not innovative have dominated: Only a quarter of German companies are characterised by innovative spirit and technological leadership. In more than half of the companies, groundbreaking ideas are not actively promoted, there is a lack of willingness to take risks, a strategy geared to innovation and a living culture of innovation. And this is despite the fact that both size and profitability are closely linked to the respective innovative strength: the more technologically creative a company is, the greater its economic success and the dynamic growth in the number of employees. Small and medium-sized enterprises (SMEs) in particular still have a lot of catching up to do when it comes to innovations [1] Dr. Pollert explains why this fact is so explosive as follows: "When you consider that SMEs are of more than decisive importance for Germany as a business location, there is growing concern about economic sustainability. After all, almost 60 percent of the employees subject to social insurance contributions are employed in an SME. Creative freedom and skilful employee management can also strengthen innovative strength there. The average medium-sized company may not have the possibilities of a global corporation at its disposal, but if it does not take into account the changing competitive conditions in a digitalised world, a stable organisation will be marginalised in the long term [2].

Departure into a new era
The age of innovation has long since begun. But what does the economy need to make groundbreaking ideas and disruptive technologies successful? Targeted investments and better networking between business and science are now needed. On the one hand, this requires companies willing to change and, on the other, a more active economic and innovation policy. A first step would be to connect rural, SME-oriented areas to the digital infrastructure. In addition, the reduction of bureaucratic hurdles would improve the framework conditions, for example for technologically skilled start-ups. However, initial efforts to strengthen innovative strength in this country are already underway. In 2019, the Federal Government established the Agency for Jump Innovations. The project is to be funded by the federal government to the tune of one billion euros over the next ten years and thus accompany promising ideas through to their concrete implementation. "Baby steps in the right direction - but still far from enough commitment. As the most important resource of the future, innovations must be placed on the agenda much more profoundly," emphasizes Pollert. This is countered by the fact that the Bloomberg Innovation Index recently ranked Germany as the most innovative nation among the countries surveyed[3] Although this shows that Germany has not yet completely lost its lead, the investments of major corporations in the pharmaceutical, automotive and mechanical engineering sectors were the decisive factor in the survey. In the area of training and further education, the Federal Republic scores comparatively weakly. In the long term, Germany will only be able to maintain and expand its role as a strong innovator if the promotion of young talent and the importance of the creative power of start-ups and SMEs is given greater scope. "The time has long since come for an awareness and also a climate to be created at the political level in Germany for the promotion of future-oriented technologies," warns Pollert. "Only through new technologies, for example in the fields of artificial intelligence, big data, environmental protection and sustainability, can we adequately address the social and economic problems of the present and future.



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