Small and medium sized enterprises in Germany. Economy – Stretegy – Policy

Author: Kurt Vogler-Ludwig

Publisher: KMU-Befragung 2002

Year: 2002

Language: German

In co-operation with the Kingston University, London, a survey of small and medium-sized companies was carried out in spring 2002. By telephone interviews, information on the economic situation, innovation activities and the assessment of politics of 299 German firms with up to 250 employees was collected. They are located in all regions and belong to the manufacturing, trade and business services sectors. The results are summarised in a report:

  • Low Marks for Economic Policy: The reduction of state regulation and the control over bureaucracy appears as a pivotal question for the upcoming election. Compared to wages the reduction of taxes received a significantly higher ranking. On the side of the Federal and Länder Governments the SMEs see little understanding of their specific problems. Governments have done little to ease the survival under difficult economic conditions.
  • Captured by Economic Recession: For many companies markets are in recession. Only a quarter saw themselves on – in most cases slowly – growing markets. The situation of the suppliers of business services was better than for manufacturers or trades. The growth trend for sophisticated services is unchanged and re-enforces the transition towards know-how-intensive services.
  • Backlog in the Area of Internet Technology: Product innovation of SMEs is at a high level. However, the growth contribution of newly introduced products and services remains limited. The major business is from products introduced three years before or earlier. ECommerce only contributes 3 % of turnover. The gab between companies using this technology exclusively or not at all is widening. The old economy has to switch to the new technology if it does not want to be excluded from parts of its markets.
  • Progress with Corporate Planning: Almost half of the SMEs have a written corporate plan. This is a significant progress achieved during the last decades. The implementation of these plans, however, is a question of general dynamics of the companies rather than the optimal policy mix. Compared to turnover-oriented companies, profit oriented companies set more ambitious targets in all aspects of corporate planning. The Schumpetarian entrepreneurs remain the locomotives of the economy.

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