Small and medium-sized companies (SME) of the famed German Mittelstand are still having enormous difficulties dealing with the pace of progress. Patriarchal management styles, desperate clinging to the outmoded ways of the good old days, fear of the need for highly complex change, and the false sense of security caused by decades of high profits: many of Germany’s hidden champions and family-owned market leaders are lacking in innovation and thus jeopardizing their future.
A promising model for innovation
Partnerships between SMEs and fast acting startups is one possibility to gain access to innovation. Geza Brugger, Principal at the investment and consulting firm e&Co, and our Board Member Berthold Baurek-Karlic outlined in a whitepaper how such a partnership could work.
The benefits of “Corporate Startup Engagement” (CSE) are clear: Startups help companies to develop products and services faster while outsourcing technology risk and gaining access to talent pools.
Potential ways of engaging with startups include everything from straightforward cooperation and joint innovation approaches to taking majority stakes. None of these concepts is the exclusive preserve of large corporates. As such, we expect an increasing corporate venture capital activity in 2018, with more startup accelerators, incubators, and acquisitions among the top Mittelstand companies. Moreover, it can’t come soon enough: Currently, the German-speaking countries are still losing young entrepreneurs in the early phase as they move abroad – despite initial support and funding at home.
AN OVERVIEW OF THIS WHITE PAPER:
- “Innovate or die”: Why SMEs need to take the digital transformation seriously.
- Making a success of corporate startup engagement: It’s about goals.
- A promising model: Turn venture activities into a platform for innovation.