Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Innovation among SMEs continues to fade

25.02.2015

- Share of innovative companies falls to just 28%

- Weak economic activity in the eurozone and intense price competition hamper progress

- Sales and employment opportunities remain unexploited

The innovation activity of German SMEs has contracted for the third year in succession. Only 28% of small and medium-sized companies recently invested in innovative products or processes, as confirmed by the new KfW SME Innovation Report.

The share of SME innovators is therefore currently lower than in the 2007-2009 period affected so heavily by the financial crisis. The KfW Innovation Report covers innovation activity between 2011 and 2013 - these are the most up-to-date representative figures available. Product innovations have fallen particularly sharply, while process innovations have dipped only slightly.

By foregoing innovations, small and medium-sized enterprises also pass up on the opportunity to exert a positive impact on their business success. According to the KfW study, sales revenues and employment numbers grow roughly two-fifths more quickly in innovative SMEs than in companies which do not aim to achieve any product or process innovations at all. Their return on sales has risen by 7% in two years compared to that of non-innovative small and medium-sized enterprises.

"The current KfW Innovation Report confirms that the sales revenues of innovative SMEs increase more quickly, they generate higher yields and they create more jobs. If small and medium-sized enterprises become less innovative, this spells bad news for the international competitiveness of the German economy and also for Germany as a business location", commented Dr Jörg Zeuner, Chief Economist at KfW.

According to the KfW analysis there are now only about 1.01 million innovative small and medium-sized businesses in Germany at present. 51,000 companies have stopped innovating compared to the previous period reviewed (2010-2012), and there are various reasons for this decline. One of the main triggers is the ongoing economic stagnation in Europe.

The main types of company abandoning innovation are otherwise highly innovative SMEs in the manufacturing industry (e.g. those conducting intensive research and development in mechanical engineering, electrical engineering or the pharmaceutical industry) as well as large and international SMEs because the macroeconomic climate is hindering the market placement of their innovations. Even if the economic prospects for 2015 leave no hope of a swift return for these businesses to innovation, they are expected to become innovative again when the economy picks up.

Taking a longer-term perspective, it is not so much the highly innovative companies that are losing their innovative capacity. What is worrying is the development among small firms as well as in sectors where little research is conducted.

Since the middle of the 2000s, the innovation output of small companies with fewer than 5 employees has fallen by 39%, and by 38% and 43% respectively for businesses in construction and the services sector. Pricing competition is growing in all industries. The little leeway there was for investment in innovative products and processes is therefore quickly disappearing in sectors with a low research intensity.

"A continued withdrawal of SMEs from innovative activities must be prevented. The stronger the pricing competition, the less room to manoeuvre there is. Difficulties with financing constitute a further obstacle for innovation. This is where economic policy has to stay on the ball", said Zeuner.

The latest KfW SME Innovation Report as well as other media materials can be downloaded from www.kfw.de/innovationsbericht 

Contact:

KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM) Christine Volk
Tel. +49 (0)69 7431 3867, Fax: +49 (0)69 7431 3266,
E-Mail: Christine.Volk@kfw.de, Internet: www.kfw.de 

Christine Volk | presseportal

More articles from Business and Finance:

nachricht RWI/ISL-Container Throughput Index ending 2017 on a positive note
24.01.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

nachricht Uncovering decades of questionable investments
18.01.2018 | University of Texas at Austin, Texas Advanced Computing Center

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: In best circles: First integrated circuit from self-assembled polymer

For the first time, a team of researchers at the Max-Planck Institute (MPI) for Polymer Research in Mainz, Germany, has succeeded in making an integrated circuit (IC) from just a monolayer of a semiconducting polymer via a bottom-up, self-assembly approach.

In the self-assembly process, the semiconducting polymer arranges itself into an ordered monolayer in a transistor. The transistors are binary switches used...

Im Focus: Demonstration of a single molecule piezoelectric effect

Breakthrough provides a new concept of the design of molecular motors, sensors and electricity generators at nanoscale

Researchers from the Institute of Organic Chemistry and Biochemistry of the CAS (IOCB Prague), Institute of Physics of the CAS (IP CAS) and Palacký University...

Im Focus: Hybrid optics bring color imaging using ultrathin metalenses into focus

For photographers and scientists, lenses are lifesavers. They reflect and refract light, making possible the imaging systems that drive discovery through the microscope and preserve history through cameras.

But today's glass-based lenses are bulky and resist miniaturization. Next-generation technologies, such as ultrathin cameras or tiny microscopes, require...

Im Focus: Stem cell divisions in the adult brain seen for the first time

Scientists from the University of Zurich have succeeded for the first time in tracking individual stem cells and their neuronal progeny over months within the intact adult brain. This study sheds light on how new neurons are produced throughout life.

The generation of new nerve cells was once thought to taper off at the end of embryonic development. However, recent research has shown that the adult brain...

Im Focus: Interference as a new method for cooling quantum devices

Theoretical physicists propose to use negative interference to control heat flow in quantum devices. Study published in Physical Review Letters

Quantum computer parts are sensitive and need to be cooled to very low temperatures. Their tiny size makes them particularly susceptible to a temperature...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

2nd International Conference on High Temperature Shape Memory Alloys (HTSMAs)

15.02.2018 | Event News

Aachen DC Grid Summit 2018

13.02.2018 | Event News

How Global Climate Policy Can Learn from the Energy Transition

12.02.2018 | Event News

 
Latest News

Researchers invent tiny, light-powered wires to modulate brain's electrical signals

21.02.2018 | Life Sciences

The “Holy Grail” of peptide chemistry: Making peptide active agents available orally

21.02.2018 | Life Sciences

Atomic structure of ultrasound material not what anyone expected

21.02.2018 | Materials Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>