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Strengths of German SMEs  Presentation at the SME Convention January 13th, 2011 at Mahatma Mandir,  Gandhinagar, Gujarat, ...
Contents of Presentation (1) Structure and economic potential of SMEs in Germany (2)  Success factors of German SMEs (3)  ...
(1)  Structure and economic potential of SMEs in Germany
SMEs in Germany 2008 (EU Statistics)   (Value added: Euro = black, USD = blue); 1 € = 1,32 US$ (15.12.2010) Source: Eurost...
SMEs in Germany, 2007 / 2008 (German Statistics) (Euro = black, USD = blue);   1 € = 1,32 US$ (15.12.10) Source: Statistis...
(2) Success factors of German SMEs
R&D expenditures of business enterprises 2002 – 2008 in millions of Euro/USD (Euro = black; USD = blue); 1 € = 1,32 US$ (1...
R&D expenditures of the Federal Government and the Federal States in millions of Euro/USD  (Euro = black; USD = blue); 1 €...
Innovation activities of enterprises, 2004 - 2008 Source: ZEW: Innovation in Germany, 2007
Innovation expenditure of enterprises, 1992 – 2008 in billions of Euro/USD   (Euro = black; USD = blue) 1 € = 1,32 US$ (15...
German enterprises with marketing and organizational innovations, 2006 Source: ZEW: Innovation in Germany, 2007
R&D and Innovation activities as prerequisites for a successful  participation in the international market Internationaliz...
Internationalization Potentials: - Size of company - Degree of specialization - Financial situation - Knowledge and R&D ca...
Potential analysis Personnel structure and capacity Structure and capacity Quality of product Number and Qualification of ...
Overall assessments of potential target markets Offer Demand Competitor Situation Social development   Economic developmen...
Strategic decision process:  Assessment of the international  competitiveness Pre-selection of target markets (long list) ...
Political and legal situation in the target market Legal framework Political situation Law and economic order Taxation sys...
Cooperation Representation License/ Franchising Direkt investment Definition of company’s objectives in target market Stip...
Success factors in international markets - internal factors (companies´view) Determinants of International Market Access o...
Determinants of International Market Access of German SMEs Success factors in international markets - external factors (co...
Determinants of International Market Access of German SMEs General Motivation for Internationalization  (companies´view) 7...
Enhancement of company’s economic performance Internal motivation for  Internationalization Marketing of technology-orient...
Diversification and increase of sales potentials External Motivation for Internationalization Economic stabilization of co...
(3)  Innovative German SMEs / Products
Environmental technology Optical technologies Biotechnology Nanotechnology Lithium-ion battery Innovative technological ar...
Innovative research areas  for the coming decades Climate protection, resources  conservation, energy Mobility   Security ...
(4) German SMEs and the international finance crises.
<ul><li>The Economic Stimulus 2008 – 2010 </li></ul><ul><li>Stabilisation of the finance market: 480 billion Euro  (636.5 ...
The Economic Stimulus 2008 – 2010  <ul><li>Euro 900 million  (1 193 million US$)  have made available for the Central Inno...
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Strengths of German SMEs

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  1. 1. Strengths of German SMEs Presentation at the SME Convention January 13th, 2011 at Mahatma Mandir, Gandhinagar, Gujarat, India Prepared by Dr. Abdelmoneim Issa Frankfurt Main, Germany www.prac.de [email_address] December 2010
  2. 2. 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
  3. 3. (1) Structure and economic potential of SMEs in Germany
  4. 4. 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 /$
  5. 5. SMEs in Germany, 2007 / 2008 (German Statistics) (Euro = black, USD = blue); 1 € = 1,32 US$ (15.12.10) Source: Statistisches Bundesamt: Ausgewählte Ergebnisse für KMU 2007, Wiesbaden 2010 (Federal Statistical Office) Source: Institut für Mittelstansforschung (Institute for SME-Research), Bonn 2010, Germany Trade and Invest, Köln 2008 47,3% Value Added (2007) 70,5 % 21.15 million 30.01 million Employment (2007) 37,5 % € 1 932 billion $ 2 562 billion € 5 148 billion $ 6 826 billion Turnover (2007) 99,7 % 3.62 million 3.63 million Enterprises (2008) Share  SMEs  Total Number   45,2% € 556 billion $ 737 billion € 1 230 billion $ 1 631 billion Value Added 58,3 % 12.967million 22.259 million Employment 33,6 % € 1.545 billion $ 2 048 billion € 4 593 billion $ 6 090 billion Turnover 99,3 % 1.811 million 1.824 million Enterprises Share  SMEs  Total Number   2007
  6. 6. (2) Success factors of German SMEs
  7. 7. 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)
  8. 8. 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)
  9. 9. Innovation activities of enterprises, 2004 - 2008 Source: ZEW: Innovation in Germany, 2007
  10. 10. 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)
  11. 11. German enterprises with marketing and organizational innovations, 2006 Source: ZEW: Innovation in Germany, 2007
  12. 12. R&D and Innovation activities as prerequisites for a successful participation in the international market Internationalization Potentials Internationalization Competence Successful International Market Access Systematic planning Strategic disposition
  13. 13. 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
  14. 14. Potential analysis Personnel structure and capacity Structure 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
  15. 15. Overall assessments of potential target markets Offer Demand Competitor Situation Social development Economic development Political development Determinants of International Market Access of German SMEs Strategic disposition – Overall analysis
  16. 16. 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 legal framework Determinants of International Market Access of German SMEs Strategic disposition - Specific analysis General analysis on potential target markets
  17. 17. 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
  18. 18. 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
  19. 19. Success factors in international markets - internal factors (companies´view) Determinants of International Market Access of German SMEs 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
  20. 20. Determinants of International Market Access of German SMEs Success factors in international markets - external factors (companies´view) 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 business relations 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
  21. 21. Determinants of International Market Access of German SMEs General Motivation for Internationalization (companies´view) 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
  22. 22. 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
  23. 23. Diversification and increase of sales potentials External Motivation for Internationalization 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
  24. 24. (3) Innovative German SMEs / Products
  25. 25. Environmental technology Optical technologies Biotechnology Nanotechnology Lithium-ion battery Innovative technological areas
  26. 26. Innovative research areas for the coming decades Climate protection, resources conservation, energy Mobility Security Health Prospective areas of research and development
  27. 27. (4) German SMEs and the international finance crises.
  28. 28. <ul><li>The Economic Stimulus 2008 – 2010 </li></ul><ul><li>Stabilisation of the finance market: 480 billion Euro (636.5 billion US$), October 2008 </li></ul><ul><li>Finanzmarktstabilisierungsfonds (SoFFin) </li></ul><ul><li>First Stimulus Programm I (Konjunkturprogramm I): 50 billion Euro (66.3 billion US$), </li></ul><ul><li>November 2008 </li></ul><ul><li>Second Stimulus Package II (Konjunkturpaket II): 50 billion Euro (66.3 billion US$), </li></ul><ul><li>February 2009 </li></ul>
  29. 29. The Economic Stimulus 2008 – 2010 <ul><li>Euro 900 million (1 193 million US$) have made available for the Central Innovation </li></ul><ul><li>Programme for SMEs (ZIM) </li></ul><ul><li>Euro 8.66 billion (11.48 billion US$) are being currently invested in education and </li></ul><ul><li>science </li></ul><ul><li>Euro 500 million (663 million US$) are being invested in application-oriented research </li></ul><ul><li>Euro 500 million (663 million US$) are being made available for the basic renovation </li></ul><ul><li>and energy-oriented modernisation of buildings </li></ul><ul><li>Euro one billion (1.32 billion US$) for the intensified training of employed persons and </li></ul><ul><li>job-seekers The Federal Employment Service will receive these funds </li></ul>
  30. 30. Thank you for your attention
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