Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
Strengths of German SMEs
Presentation at the
SME Convention January 13th, 2011at Mahatma Mandir,
Gandhinagar, Gujarat, India
Prepared by
Dr. Abdelmoneim IssaFrankfurt Main, Germany
December 2010
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
Contents of Presentation
(1) Structure and economic potential of SMEs in Germany
(2) Success factors of German SMEs
(3) Innovative German SMEs / products
(4) German SMEs and the international finance crises
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
(1) Structure and economic potential of SMEs in Germany
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
SMEs in Germany 2008 (EU Statistics) (Value added: Euro = black, USD = blue); 1 € = 1,32 US$ (15.12.2010)
Source: Eurostat, 2008
254
316
294
865
774
1640
/$
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
SMEs in Germany, 2007 / 2008 (German Statistics)(Euro = black, USD = blue); 1 € = 1,32 US$ (15.12.10)
Total Number SMEs Share
Enterprises (2008) 3.63 million 3.62 million 99,7 %
Turnover (2007) € 5 148 billion$ 6 826 billion
€ 1 932 billion$ 2 562 billion
37,5 %
Employment (2007) 30.01 million 21.15 million 70,5 %
Value Added (2007) 47,3%
Source: Statistisches Bundesamt: Ausgewählte Ergebnisse für KMU 2007, Wiesbaden 2010 (Federal Statistical Office)
2007 Total Number SMEs Share
Enterprises 1.824 million 1.811 million 99,3 %
Turnover€ 4 593 billion$ 6 090 billion
€ 1.545 billion$ 2 048 billion
33,6 %
Employment 22.259 million 12.967million 58,3 %
Value Added € 1 230 billion$ 1 631 billion
€ 556 billion$ 737 billion 45,2%
Source: Institut für Mittelstansforschung (Institute for SME-Research), Bonn 2010, Germany Trade and Invest, Köln 2008
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(2) Success factors of German SMEs
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R&D expenditures of business enterprises 2002 – 2008 in millions of Euro/USD(Euro = black; USD = blue); 1 € = 1,32 US$ (15.12.2010)
Source: Stifterverband Wissenschaftsstatistics 2008
(819)
(12 424)
(2 250)(3 038) (3 075)
(6 386)
(8 846)
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R&D expenditures of the Federal Government and the Federal States in millions of Euro/USD (Euro = black; USD = blue); 1 € = 1,32 US$ (15.12.2010)
Source: Federal Report on Research and Innovation 2007/2008
(10 717)
(12 086)
(13 440)
(15 912)(14 727)
(11 018)
(12 336)
(10 613)
(11 971)
(10 246)
(11 752)
(10 507)
(12 037)
(10 681)
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Innovation activities of enterprises, 2004 - 2008
Source: ZEW: Innovation in Germany, 2007
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Innovation expenditure of enterprises, 1992 – 2008 in billions of Euro/USD (Euro = black; USD = blue) 1 € = 1,32 US$ (15.12.2010)
Source: ZEW: Innovation in Germany, 2007
(77.4)
(109.8)
(119.8)
(12.9)
(8.4)
(29.3) (30.5)
(10.6) (9.7)
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German enterprises with marketing and organizational innovations, 2006
Source: ZEW: Innovation in Germany, 2007
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R&D and Innovation activities as prerequisites for a successful participation in the international market
Internationalization Potentials
Internationalization Competence
Successful International Market
Access
Systematic planningStrategic disposition
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Internationalization Potentials:- Size of company- Degree of specialization- Financial situation- Knowledge and R&D capabilities- Management international orientation- Market position in the national market- Quality of product
Internationalization Competence:- Qualification of personnel- Language capabilities- Degree of knowledge of the international market- Marketing and strategic competence- Conceptual and planning capabilities
Determinants of International Market Access of German SMEs Internationalization Potentials / Internationalization Competence
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Potential analysis
Personnel structure and
capacityStructure and
capacity
Quality of product
Number and Qualification of
personnel:Language and international experience
Management and financial capacity
Organizational structure
Innovation potential
Determinants of International Market Access of German SMEs Systematic Planning – Analaysis of the company´s internationalization capacities
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Overall assessments of potential target
markets
OfferDemand
CompetitorSituation
Social development
Economic development
Political development
Determinants of International Market Access of German SMEs Strategic disposition – Overall analysis
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Strategic decision process: Assessment of the international
competitiveness
Pre-selection of target markets (long list)
Specific analysis on selected markets (short list)
In-depth analysis on the selected target market
Assessment of political situation
Assessment of legalframework
Determinants of International Market Access of German SMEsStrategic disposition - Specific analysis
General analysis on potential target markets
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Political and legal situation in the target
market
Legal framework Political situation
Law and economic order
Taxation system
Governm ent inter-vention in economy
Protection intellecualmaterial property
Stability of Government
Stability of economic order
Stability of social order
War,revol-ution, terrorism
Strategic disposition - Analysis of the political and legal framework
Determinants of International Market Access of German SMEs
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Cooperation Representation License/Franchising
Direkt investment
Definition of company’s objectives in target market
Stipulation of personnel ressources
Acquisition of market-specific Information
Decision on market access form
Preparation of feasibility studies
Determinants of International Market Access of German SMEs Strategic disposition - Final decision on the market and products
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36%29%
57%
57%
50%
36%
64%
29%
79%
71%
71%
7%
7%
14%
43%
36%
21%
29%
29%
29%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85%
International project references
National project references
International experience of personnel
Professional qualification of personnel
Professional and financial reputation
Technological specialization
Adapting client demand
Quality of technical proposal
Very important
Important
Less important
Not important
Success factors in international markets - internal factors (companies´view)
Determinants of International Market Access of German SMEs
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
64%
43%
57%
50%
50%
43%
50%
7%
64%
36%
21%
36%
7%
7%
21%
50%
36%
43%
21%
21%
36%
50%
50%
36%
14%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%
Develop relations with local authorities
Initiate and develop of businessrelations with the private sector
Knowledge of mentality
Acceptance of mentality and culture
Knowledge of business culture
Language capability
Complementarities of objectives
Technological complementarities of business partner
Reliability of the business partner
Very important
Important
Less important
Not important
Determinants of International Market Access of German SMEs
Success factors in international markets - external factors (companies´view)
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7%
7%
57%
57%
50%
21%
43%
29%
36%
79%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85%
Increase turnover
Create new working places
Economic Growth of company
Access to new markets
Very positive
Positive
Less positive
Not positive
Determinants of International Market Access of German SMEsGeneral Motivation for Internationalization (companies´view)
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Enhancement of company’s economic
performance
Internal motivation for Internationalization
Marketing of technology-
oriented products
Improvement of personnel
qualification
Expansion of company’s
position in the sector
Secure and stabilization of
exports
Specific internal motivation for internationalization (companies´view)Determinants of International Market Access of German SMEs
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Diversification and increase of sales
potentials
External Motivation forInternationalization
Economic stabilization of company through
international investment
Opening new markets for company’s own
products
Substantial increase of turnover
Specific external motivation for Internationalization (companies´ view)
Determinants of International Market Access of German SMEs
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
Vibrant Gujarat Global Business Summit 2011
(3) Innovative German SMEs / Products
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Environmental technology
Optical technologies
Biotechnology
Nanotechnology
Lithium-ion battery
Innovative technological areas
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Innovative research areas for the coming decades
Climate protection, resources conservation, energy
Mobility
Security Health
Prospective areas of research and development
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(4) German SMEs and the international finance crises.
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
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The Economic Stimulus 2008 – 2010
• Stabilisation of the finance market: 480 billion Euro (636.5 billion US$), October 2008 Finanzmarktstabilisierungsfonds (SoFFin)
• First Stimulus Programm I (Konjunkturprogramm I): 50 billion Euro (66.3 billion US$), November 2008
• Second Stimulus Package II (Konjunkturpaket II): 50 billion Euro (66.3 billion US$), February 2009
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The Economic Stimulus 2008 – 2010
• Euro 900 million (1 193 million US$) have made available for the Central Innovation Programme for SMEs (ZIM)
• Euro 8.66 billion (11.48 billion US$) are being currently invested in education and science
• Euro 500 million (663 million US$) are being invested in application-oriented research
• Euro 500 million (663 million US$) are being made available for the basic renovation and energy-oriented modernisation of buildings
• Euro one billion (1.32 billion US$) for the intensified training of employed persons and job-seekers The Federal Employment Service will receive these funds
Organised by the Gujarat Industrial Development Corporation at Mahatma Mandir, Gandinagar 11-13.01.2011
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Thank you for your attention