Archive for the ‘Germany’ Category

Innovation of 190 Euro regions compared – Swiss and Germans shine

November 9, 2012

The Regional Innovation Scoreboard 2012 was published in early November- a comparative assessment of how European regions perform with regard to innovation. The report covers 190 regions across the European Union, Croatia, Norway and Switzerland. The Regional Innovation Scoreboard is based on the methodology of the Innovation Union Scoreboard (IP/12/102).

Results
– 41 regions in the first group of “innovation leaders”
– 58 regions in the second group of “innovation followers”
– 39 regions are “moderate innovators”
– 52 regions are in the fourth group of “modest innovators”.

Considerable diversity in regional innovation performance not only across Europe but also within the Member States. The most pronounced examples are France and Portugal. Others in that category are Czech Republic, Finland, Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom

The most homogenous countries are the moderate innovators Greece, Hungary, Poland and Slovakia, where all regions except one each are also moderate innovators.

The situation is similar in Romania and Bulgaria where most or even all regions are modest innovators.

The most innovative regions in the EU are typically in the most innovative countries: Sweden, Denmark, Germany and Finland. In Germany, 12 out of 16 regions are innovation leaders. In Finland 3 out of 5 regions and in Sweden 5 out of 8 regions are innovation leaders.

Only in Denmark, the majority of the regions are innovation followers, and 2 out of 5 regions are innovation leaders, including the capital region of Copenhagen and Midtjylland. The regional innovation diversity is very low in non-EU Switzerland, which according to the Innovation Union Scoreboard 2011 outperforms all EU Member States: all Swiss regions except one are innovation leaders.

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Germany’s social partnership

April 17, 2012

The following might be viewed as a self-serving analysis, but the fact is Germany and its President are the rocks of Europe – Editor.

Germany recovered quickly from the economic slump in 2009, mainly because German industry managed to keep its skilled workforce during the crisis. This was possible because the German government sponsored short-time work, or a reduction of working hours, thus avoiding lay-offs. This measure was possible only where decent wages and management-union trust existed, what Germans call a “social partnership”. Now, despite some growth in non-unionised companies and income inequality, the export-oriented manufacturing model of social partnership is strong.

Those who believe unions, high wages and workers rights are a burden for business should consider that this sector has been Germany’s most successful. Instead of trying to out-compete global markets in cheap goods, German industry specialised in high-quality products and kept its share in a growing global market as other European countries, Japan and the US lost shares to China. This strategy is possible only with highly skilled and motivated workers and requires managers who promote a constant evolution of improvement in products and processes. Strong union representation on the shop floor, in the form of “work councils”, and on supervisory boards ensures that workers’ interests are always considered.

German manufacturing workers’ representation remains strong despite global competition. It proved successful because it incorporated the knowledge of workers and their representatives, countering change with fewer conflicts.

By contrast, the way the US has treated its workers has helped create a highly precarious socioeconomic reality. Half of Americans are in poverty or low-income, and the US is experiencing the highest income inequality since the Great Depression, a gap that mushroomed in the past 30-40 years because of trade, tax and labour policies. US trade policies undermined America’s working class through the outsourcing and offshoring of US manufacturing and the erosion of labour protections. US tax policies moved wealth from the majority to the minority, thanks to low capital gains and dividends taxes, thus favouring non-labour wealth creation. US labour policies failed to increase minimum wages for the majority of America: the minimum wage is worth less now – adjusted for inflation – than in 1968 when the inequality trend started to take off.

Source: Michael Shank (Institute for Economics and Peace) & Thorben Albrecht (Social Democratic Party of Germany)

Rhine and Paris are tops for IT

March 25, 2010

Germany’s Rhine-Main-Neckar region is Europe’s “Silicon Valley”, and the Paris region is ranked second, ahead of South East England. The United Kingdom has three regions in the top ten. 

 Truffle Capital has published its “Truffle 100 European Clusters” ranking of Europe’s top 42 regions for the software industry. This mapping is based on a survey undertaken with support of Viviane Reding (EC Commissioner) in collaboration with analysts CXP and the “Top 100 Research Foundation”.

 “It is a recent trend for the European Union to define Europe as regions and not as countries,” CEO and co-founder of Truffle Capital, Bernard-Louis Roques told IT Europa. “So we discussed with different political partners and software companies to know how Europe was doing compared to other clusters such as the Silicon Valley and the Boston area.”

 The four flagships are Rhine-Main-Neckar in Germany (€12.5bn revenue), then Paris region (Ile-de-France), (€2.5bn), third is South-East England (€1.9bn) and fourth is North-East England (€1.4bn).

 “That Ile-de-France is the second European region isn’t surprising, because France is a country extremely centralised, where everything happens in Paris,” explained Roques, “but a lot of French companies have been acquired in the last two years, representing about €1.5bn,” such as GL Trade (French No. 4) bought by Sunguard, Ilog (No. 5) bought by IBM, Viveo (No. 13) bought in December by a Swiss company, or Business Objects also in the Paris region, that represented about €1bn that was bought by SAP. And that explains also why “the Rhine-Main-Neckar region is growing its lead,” he continues. “This is mainly due to acquisitions by German companies, such as Software AG or SAP.” www.truffle.com

contributed by Graeme Vickery, OECD, Paris

German clusters lead innovation

March 25, 2010

 

Paquita Lamacraft, an Aussie working in Germany, has filed this report based on recent research by the Berlin Institute for Innovation and Technology. 

The Institute has prepared a report analysing 107 “of the most innovative” clusters in Germany. Clusters are seen as an economic phenomenon that can be measured. And Germany takes its structures seriously, funding them accordingly, but requiring accurate results reporting. Over 4,000 SMEs, 700 global players and 1,300 universities or technical institutes are on the data base.

Funding of German clusters is provided at both federal and state level, giving parallel funding streams in addition to opportunities for EU funding. The clusters in receipt of funding date back to 1995. There are  both top down and bottom up cluster types, and the greatest success lies with the bottom up clusters which seem to be more internationally engaged.

Over 80% of the group studied have some sort of legal constitution – whether by Association (predominant preference), or other status. The funding policies vary. Federally-funded clusters receive greater funding, although it decreases over time, because external private funding is a requirement. Funding varies according to the sector – biotechnology clusters are well-resourced.

Clusters generally have 1-3 paid employees with responsibility for identifying and implementing demand-based activities e.g. establishing specialised test or research centres, training etc. Go to http://www.kompetenznetze.de/service/bestellservice/clusters-in-germany In next month’s Cockatoo we feature more on German cluster successes.

Angles for Cockatoo members

  • Contact Paquita at Paquita_ann@hotmail.com to compare notes and explore alliance opportunities between clusters in Germany and your region. We certainly hope to use her on the Sunrise project.

China is the new Germany

November 12, 2008

 

Mark Peterson Arkansas USA (vworks@uaex.edu) has sent us this quaint little story.

At the end of the Second World War, Germany was an “emerging market”. It was industrializing rapidly and producing brisk economic growth. Today, Germany is a mature “developed market” that grows slowly if it grows at all. Today, China is the new Germany. The industrial dynamism that produced Germany’s post-war success is moving to the East… piece by piece.

One of the largest steel mills in Germany was the ThyssenKrupp mill in the Ruhr Valley, the heart of Germany’s industrial area. At the turn of the millennium (2000), mills and factories in Germany began to close, unable to compete with lower wages in the developing world. A Chinese company bought the ThyssenKrupp mill, and soon 1,000 Chinese workers arrived to take it apart – they worked 12 hours a day, 7 days a week, and dismantled the plant in less than a year, two years faster than the Germans anticipated.  The Germans complained, so the Chinese took a day off. Over 5,000 miles away, the Chinese then put together the 275,000 tons of equipment and material, and the plant now produces as much steel as the entire production of China in 1975.

When the Chinese departed, they left the makeshift dormitories and kitchens they occupied for a year neat and clean. There was, however, a single pair of black boots left in one of the dormitories. It carried the brand name of Phoenix, which was also the name of the plant the Chinese just took apart. The boots also carried the label “Made in China”.

Source:  Chris Mayer, Whiskey and Gunpowder, 6/3/08

Innovation Policy – Germany benchmarked

October 17, 2008

 

A 420 page study ‘New Challenges for Germany in the Innovation Competition’ has come to our attention courtesy of the National Dialogue on Entrepreneurship.

 

The report benchmarks Germany’s innovation performance against China, France, India, Korea, USA and Japan. The report reads like an OECD country survey – but suffers from extreme verbosity and lacks a tight summary section. Nevertheless it is a treasure trove of material e.g. interesting section on Korea’s cluster program.

 

Some of the salient points:

§          Germany faces challenges in coordinating policies across different parts of its Federal system.

§          In terms of strategies, German innovation policies place great emphasis on support for SMEs.

§          German policymakers must promote technology transfer and commercialization in a fragmented environment characterized by numerous research organizations and SMEs.

§          Overall, Germany shows great strengths in areas related to international trade and key technology sectors. Information technology is an exception, with Germany’s international technology profile lagging other economies.

§          Germany is now aiming to spend 3% of GDP on R&D.

 

Go to New Challenges for Germany in the Innovation Competition

‘Design’ now all-important

July 24, 2008

Dr John Howard (Canberra-based consultant/policy analyst) says design and creative practice are major components of industry and innovation policy. John has done excellent work in this field, and this month he launched Between a hard rock and a soft space: design, creative practice and innovation.” The international overview is worth sharing:

§          UK leads the world in its recognition of the creative industries. The Cox Review of Creativity in Business examined how to exploit creative skills more effectively (UK Treasury 2005). The Design Council is important – now runs a program ‘Designs of the Time’ (DOTT) and a new program, ‘Designing Demand’ helps SMEs become more competitive – offers flexible, structured processes, using expert Design Associates with business experience.

§ New Zealand has launched a design strategy and is looking to breed a cohort of design-led firms — brand builders based on ideas grown in New Zealand.

§ The German Design Council (Rat für Formgebung) is a world leader in competence centres for communication and know-how transfer in the design field. Runs competitions, exhibitions, conferences, consulting, research and publications.

§ The Swedish Industrial Design Foundation (SVID) improves awareness of the importance of design as a competitive tool, and encourages the integration of design methodology.

§ The Indian Government released a national design policy in 2006. It includes a ‘Mark of Good Design’ – only well-designed products can carry the mark. The aim is to ensure that the words ‘Designed in India’ come to mean good value. India is seeking to become a global design hub. Currently a roll-out of design-led business and academic centres.

§ Taiwan has a robust design policy, supported by a growing number of design schools.

§ South Korean students outnumber all other nationalities in most graduate design programs in the United States, and Samsung is an upcoming innovator.

§ China is shifting its manufacturing base from OEM to original design manufacture and brand-manufacturing operations. In 20 years, China has opened 400 specialist design schools to train designers and build design capabilities.

§ Singapore is creating centres to bring business and design and creativity together.

Thanks to Hari Argiro (Adelaide CC) for pointing us to John Howard’s article.

US expert predicted Mitsubishi’s exit in Australia

March 8, 2008

Professor Oded Shenkar was the Ford Foundation Professor of Global Business Strategy at Ohio State University in 2001. From our archives, we have idenitifed some very prescient comments he made at a series of talks in Australia as part of the Smartlink project .

Shenkar has a longstanding expertise re engagement with China, globalisation, multinationals, SME development, innovation and auto industry adjustment. Comments included:

  • Globalisation is on everyone’s mind – and the Conference Board (the key think tank in the US) has identified globalisation and alliances as the two critical issues.
  • Australia feels threatened by takeovers and, while MNEs might provide jobs, they may not be a ‘thinking’ workforce.
  • In Australia, there will not be four auto manufacturers within five years (i.e. currently Ford, GM, Mitsubishi, Toyota). The future of Mitsubishi will hinge on how well Chrysler does in the US – where it is losing $US500m per quarter at present – people in SA should be praying for Chrysler)
  •  Virtually all nations want foreign investment, and there is tremendous competition. But 85% of FDI is via mergers and acquisitions, and global M&A is now greater than domestic M&A. MNEs are trying to consolidate and not replicate – countries looking to maximise the contributions of MNEs should concentrate on knowledge-based activities – not capital for its own sake – go for back-office activities, education and training, design and tooling etc. that can build value chains. The need is to leverage off MNEs’ requirements.
  • One-third of global trade is internal transfer between the affiliates of the one company – and 60% of MNEs do not pay a cent in corporate tax.
  • SMEs are flourishing despite the growth of globalisation – they drive innovation. MNEs need them to capture innovation – this is why Cisco has bought 70 companies in the last two years. The share of US exports represented by SMEs has grown from 20 to 30% in recent years.
  • How should SMEs respond? – take opportunities as they arise, piggy-back off MNEs, push on exports because ‘if you don’t venture out, someone else will come and eat your lunch’ (i.e. off-shore competitors will encroach in  your domestic market).
  • Re US investor perceptions of Australia – while at pains to emphasise this was his first trip, Prof. Shenkar indicated that from his perspective, Australia is not on the screen – the leisure image works against Australia, and Hawaii suffers the same problem. Australia is seen as downunder and far away – Americans do not realise that Sydney is closer than Hong Kong in flying time. Australia really doesn’t have identifiable brands or specialisation like Sweden – furniture, Germany – cars. Interestingly, Subaru uses Paul Hogan and kangaroos in its 4WD ads in the US, and a fair proportion of Americans probably think the vehicles are made in Australia (and not Thailand etc.)
  • Alliances could help Australia overcome its lack of scale – bilateral alliances are one possibility whereby different aspects of a supply chain could be coordinated – but it requires a different perception of things and a creative government on both sides – need to see it as a value chain.
  • Sometimes we need to be physically close – it is important, and part of human nature. Governments need to recognise this. 

Clusters will grow in importance, says Welsh expert

March 5, 2008

Professor Philip Cooke (University of Wales) has been a keynote speaker at various TCI conferences in recent years, and is an active collaborator with other academics and economic development professionals around the world, including us. Herewith is a summary of one of his recent presentations.

 To talk about clusters properly, one needs to build in ‘localised enterprise support infrastructure’ which helps the organic growth of firms. The advantage of clustering is that it facilitates:
·          inter-generational transfer of knowledge.
·          imitation of successful practices and innovations.
·          inter-personal face to face contact.
·          inter-firm cooperation.
·          tacit circulation of commercial and technical knowledge. 

There are probably 20-30 really strong clusters in the UK – some are old such as ceramics in Stoke on Trent. A good, newer example is around Reading (Oxfordshire) where the Silverstone race circuit has facilitated the growth of a F1 motor sports cluster involving construction, testing, training – nine racing car groups (e.g. Williams and Benetton) have clustered there, with many suppliers nearby. There was poaching of skilled technicians until the authorities called a meeting and asked for cooperation.  

Other examples are in IT and biotech around Cambridge and multi media around Cardiff. Germany also has four biotech clusters, including Munich and Hamburg. Most of these are located close to a source of knowledge.   Cluster agendas conform with the realities of the New Economy:

Old Economy                                                                                       New Economy

 A skill                                                                                                       Lifelong learning

Labour conflicts                                                                                   Teams

Environmental limits                                                                          Growth

Security                                                                                                  Risk taking

Monopolies                                                                                          Competition

Plants                                                                                                    Intelligence

Standardisation                                                                                   Customer choice

Status Quo                                                                                            Agility

Hierarchical                                                                                          Distributed

Wages                                                                                                   Shared ownership

 Certain features of the New Economy are important in the context of innovation systems – venture capital search laboratories, IP-driven development and incubators.  

Clusters will grow in importance in the New Economy, given that it requires the revitalisation of old sectors, knowledge transfer and creativity, collective learning, untraded interdependence (favours), spill-over effects from new business formation, and project-based collaboration. 

Some concluding remarks:

·         
It is hard to build clusters from scratch.
·          supportive infrastructure is very important.
·          clusters enhance new firm formation.
·          there is a role for government if market failure exists.
·          need to understand that firms in clusters have other priorities – a sense of collective order or thinking about clusters is not always there.
·          Agricultural areas can benefit from clusters, but this is not fully appreciated.
·          ‘A cluster is not a cluster without a governance structure’.

Contact: phone 029 20 874945, cookepn@cf.ac.uk

GM technology – the Big 6

February 10, 2008

Biotech companies are using genetically modified (GM) technology to mould climate change into a market opportunity. The aim is to grow plants with stronger, longer roots, develop plants that better conserve water, change the way the plant develops so water can be directed more to grain development etc.   

Monsanto, the biggest of the Big 6 in GM technology, gets much of the attention and flak. It has turnover of around $US9 billion. It is doing field trials in dry areas (Kansas, Nebraska, South Dakota). It spends 10% of sales on R&D ($US2 million/day), and sees drought-tolerance as a key area. Monsanto aims to have its first transgenic drought-tolerant corn seed on the market in 2012 (the development phase generally takes 6-8 years) It is also testing drought-tolerant corn. Monsanto equities were trading at a P/E ratio of 42 prior to Wall Street slide, which is an indication of investor confidence in GM technology!  

Bayer, the German multinational is No. 2 – turnover of $US8.4 billion.

The 3rd player is Switzerland’s Syngenta, which has a significant global reach and turnover of around $8 billion. Syngenta is pursuing “water optimised” corn technology.

The 4th player is BASF, also German ($5 billion turnover in agricultural products) recently announced a $US1.5 billion deal with Monsanto to develop high-yielding, drought-tolerant crops. 

The 5th player is Dupont. It has recently done a deal with Israel’s Evogene Ltd, giving DuPont’s Pioneer unit exclusive rights to genes associated with drought-tolerance in corn, soybeans.

The sixth player is Dow AgroSciences.

 Corn is the focus for virtually all six companies – the raw material for a multitude of processed foods, a major animal feed and used in ethanol production. The downside is that some farmers have mixed feelings about a drought-tolerant corn. Currently, US farmers pay about $US245 for a bag of Monsanto’s “triple-stacked” biotech corn seed, which protects against pests and is immune to weedkiller. A bag of conventional corn seed sells for around $US100.  

Source: SMH and in-house research.