BERLIN, Sept. 4 (Xinhua) -- Small and mid-sized enterprises (SMEs) in Germany are unlikely to invest in innovation during coming years, a study published on Tuesday by the DZ Bank finds.
According to the study, less than a third (29 percent) of so-called companies polled on behalf of DZ Bank planned to invest in the development of new products or business models during the coming three years. The share was even lower for the smaller enterprises, of which only every fifth (20 percent) had earmarked funds for innovation.
By contrast, 92 percent of companies said that it was a priority for them to improve efficiency of existing commercial practices. The findings were based on a representative survey of 800 SMEs with gross annual revenue ranging from 500,000 euros to 125 million euros (144.5 million U.S. dollar).
Commenting on the apparent slighting of innovation by SMEs, Uwe Berghaus, head of corporate banking at DZ Bank, said that it was sensible for business leaders to focus on improving efficiency during an economic boom period. At the same time, however, Berghaus warned that failing to simultaneously pursue a systematic strategy of innovation would come at a cost.
"If companies lose access to new markets and miss out on product trends, this (disregard for innovation) can come back to haunt them," a statement by the DZ manager read. He highlighted that the greatest obstacle to innovation cited by respondents was a lack of qualified staff rather than a lack of desire to innovate.
"Last year's survey already showed that the lack of qualified workers is a crucial obstacle to investment by 61 percent of firms...This year's finding is even more worrying because it does not just concern the current business situation but the future," Berghaus said.
Germany's SME sector faces the prospect of weaker competitiveness in the long-run if it fails to attract the workers needed for successful innovation.
On a more positive note, the DZ Bank study emphasized that nearly all companies considered plans to either maintain or raise their current levels of overall investment, with 40 percent saying they would spend more during the next three years and a further 53 percent indicating that investment would remain steady.
DZ Bank is the flagship institute of Germany's "Volks- and Raiffeisen" banking sector, a group of cooperative credit organizations which were set up in the 19th century to assist impoverished farmers. As the country's second largest lender, DZ bank continues to play a central role in the contemporary German financial industry and mainly specializes in services for SMEs.
