The innovation budgets of medium-sized and large companies are increasing. Nevertheless, many companies feel poorly positioned for the future. This is the conclusion of a recent study.
The German economy continues to invest heavily in innovation: 86 percent of the companies surveyed by the consulting firm Deloitte are increasing their spending on new technologies. In the coming years, corresponding investments will grow by 2.7 percent annually. The current innovation budget of German companies totals €166 billion and is expected to reach €175 billion by 2019, according to the study.
Engineers' tradition of innovation
Despite the increased expenditures, half of those surveyed feel at best "adequately" prepared for the future, and only a third consider themselves well prepared. Three-quarters expect significant changes in the market in the coming years. This is due to the enormous challenges posed by digitalization.
For many, the biggest obstacles to a successful future are a lack of time and expertise in digital technologies and processes. Deloitte expert Nicolai Andersen says:
"Germany is characterized by a tradition of innovation among engineers. However, it is worthwhile to question this way of thinking. Digitalization is turning many previous innovation strategies on their head. New approaches are therefore required in terms of innovation capability and culture. As the study shows, however, many companies in this country are still struggling to apply these in practice."
“Large corporations can learn from the startup world”
Medium-sized companies see themselves as better positioned than corporations, while financial service providers and technology companies lead the industry rankings in terms of self-assessment.
Andersen summarizes:
"Only one in four companies succeeds in translating trends into innovations. To change this, those affected must do more than simply increase their budgets. A broad application of different types of innovation can be just as helpful as the general promotion of an innovation culture."
According to Andersen, this also means allowing sufficient time and leveraging one's own ecosystem to generate momentum. He calls for a clear distinction between hype and substance and recommends that SMEs invest in areas that are truly worthwhile.
“Large corporations can learn from the lean organizational structures of the startup world and must simultaneously actively promote the culture of innovation.”
