SMEs meet startups

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SMEs are actually quite open to collaborating with startups. However, if the two don’t accidentally meet, in many cases things never get any further than an expression of intent.

Many large companies have realized for some time that to remain flexible and innovative, you need to look at startups. They have to listen to what the market wants and respond extremely quickly to new situations. Because if you want to survive, you have to keep developing your business model. Since nowadays even many larger companies are affected by this latent uncertainty, separated from their everyday business, they are introducing a startup culture into the company, for example, through internal incubators.

The fact that US companies, such as Google and Facebook, which were themselves startups not too long ago, promote this entrepreneurial spirit and profit from it should not really surprise anyone. In Germany, however, SMEs generally have a different culture. After all, they grew organically with no external capital and still have a successful engineering mentality. Perfectionism, risk minimization, incremental improvement, and a focus on core competences are not necessarily typical properties associated with startups. In fact, they are exactly the opposite.

The new study “Mittelstand meets Startups 2018” [SMEs meet startups 2018] from the German Productivity and Innovation Center (Competence Center) shows that many SMEs have realized that, despite this, or perhaps because of it, collaboration with startups is worthwhile. More than forty percent of small and medium-sized enterprises (SMEs) see digitization as a serious challenge. In this respect, startups could open doors to new markets or target groups. With regard to cloud computing and artificial intelligence (AI), the SMEs expect support from the young companies to develop new products and services. In particular, artificial intelligence – one of the key technologies of the 21st century – is often an area in which startups excel. They work in areas such as image recognition, voice processing, and autonomous driving.

SMEs meet startups by accident

More than seventy percent of the SMEs that were surveyed said that they could imagine working together with a startup. Forty percent have had collaboration experience in the past and almost all of them would do it again. The main aims are to develop new technologies (64 percent), develop innovative products (61 percent), and enter new markets (55 percent). Almost half hope to get to know potential employees through this collaboration. And almost a fifth regard it as an investment.

Unfortunately, in most cases collaboration is not a strategic approach by the SMEs: three quarters of the contacts are due to “coincidence”. Only 27 percent plan to contact startups. This suggests that there is an enormous potential just waiting to be leveraged.

Initiation and contact

Many different channels and occasions could be used for this. According to the German study mentioned above, recommendations from business partners, colleagues, and acquaintances are the starting point in most cases. Forty percent of contacts were the result of Internet research and trade fairs respectively. Events such as electronica offer their own platforms for this. For example, this year at the world’s leading trade fair for electronics components, systems, and applications from November 13-16 in Munich, Germany, startups will present their ideas, prototypes, products, and services in pitches, demonstrations, and personal meetings within the scope of electronica fast forward (e-ffwd).

Read the study

For the study “Mittelstand meets Startups 2018” [SMEs meet startups 2018], 250 small and medium-sized companies in the areas of mechanical engineering, automotive manufacturing, information and communication, chemicals and pharmaceuticals took part in a phone survey in March 2018.

The results of the study, more citations, and infographics can be found at www.rkw-kompetenzzentrum.de/das-rkw/presse/

 

 

 

 

SMEs meet startups

In most cases collaboration is not a strategic approach by the SMEs. (Image: RKW).