Transcript Presentation - Financial Institutions for Innovation and Development

WZB
Berlin Social Science Center
Ulrich Jürgens
The German Case
Labour Institutions as a Countervailing Power?
Conference on Financial Institutions for Innovation and Development
Ford Foundation, Hans-Böckler Foundation, SOFI
10-11 November 2014, Berlin
1
Characteristics of German Corporate Governance &
Innovation Systems
Corporate Governance
• Weak capital market
exposure; patient capital
• Technical orientation of
business leaders
• Strategic role of banks and
supervisory boards
• Co-determination of labour
Innovation System
• R&D intensive
• Industry (medium-high
tech) dominated
• Incremental rather than
disruptive
What Impact has Financialization?
2
R&D Intensity has been increasing
R&D Expenditure in % of GDP
R&D Personnel (full-time equivalent) per 1,000
Dependent Labor Force (in %) from 1995 to 2012
Germany
Private Sector: 61.2%
Public Sector: 28.8%
Schasse, U. et al.. (2014): Forschungs- und Entwicklungsaktivitäten der
deutschen Wirtschaft: Studien zum deutschen Innovationssystem
Nr. 2-2014, NIW, DIW, SDW, Hannover: p. 17 and 58.
3
The Classical Profile of Sectoral Distribution has been maintained
Focus of R&D in Germany vis a vis OECD Countries, 2011
Relative share of the economic sector in R&D expenditures of the total economy
Services
DV-Equipment, Optoelectronical Products
Pharmaceuticals
Automotive Engineering
Other Industries
Air and Space Vehicles
Mechanical Engineering
Chemicals
*OECD-24: GER, FRA, GBR,
Electrical Engineering
ITA, BEL, NED, DEN, IRL, ESP,
POR, SWE, FIN, AUT, POL,
HUN, CZE, SVK, SLO, NOR, Other Economic Branches
TUR, USA, JPN, KOR, AUS.
Schasse, U. et al.. (2014): p. 42.
Other Vehicles
4
Access to Finance is not a critical Issue
Importance of Hindrances for the Achievement of Business Goals of Companies in Germany, 2010-12
Relative Share of all Companies
Irrelevant
High
Medium
Low
Strong Price Competition
Strong Competition on Product Quality
and Marketing
Lack of Demand
Innovation done by Competitors
Market Dominance of Competitor
Lack of specialized Personnel
Lack of suitable Sources of Finance
High Entry Costs to new Markets
High Costs of State Regulation
5
Aschhoff, B. et al. (2013): Dokumentation zur Innovationserhebung 2013, Dokumentation Nr. 14-01, ZEW, Mannheim und Karlsruhe: p. 107.
Growth Dynamics are the strongest in the upper Midmarket
Sales Growth 2006-2012 according to Turnover Classes in %
Turnover Volume in Mio. €
Creditreform and IKB (2014): Wachstum finanzieren. Eine Analyse der sich wandelnden Finanzierungsmuster im deutschen Mittelstand, Düsseldorf: p. 8. 6
(https://www.ikb.de/MediaLibrary/139648e7-34ab-43ad-a010-fbe04033d1b7/140818_IKB_Studie_Finanzierungsmuster%20im%20Mittelstand.pdf, 05.11.2014)
Banks lose in Importance and Pension Funds still play a minor Role
Credit Volume and GDP on a quarterly Basis in
Germany (Index first Quarter 2000 = 100)
Credits to Companies and Self-employed
GDP (nominal)
Investments of Pension Funds in % of GDP, 2012
Switzerland
United Kingdom
Australia
USA
Canada
Japan
Spain
Germany
Italy
7
Creditreform and IKB (2014): p. 23 and 27.
Internal Financing has been increasing
Volume of Internal and External Financing in Bill. €
External Financing
Internal Financing
Creditreform and IKB (2014): p. 29.
8
Labour Institutions as Drivers of Innovation
Example One:
The IG-Metall Campaign „Better instead of Cheaper“
• Promotion of better working conditions, as well as high
product quality and innovative processes and products
• Focus on developing arguments and ideas for sustainable
economic activities within the company
• Major approaches
• Strategy workshops and future workshops
• Analysis of innovation abilities and capacities
• Advice on establishing an early warning system with regard to
neglecting innovations
• Analyses concerning material consumption and the efficiency of the
use of energy and ressources
• Employee suggestion system
• Assessment of new technologies and product innovations
IG Metall (2014): Besser statt billiger: Innovationen mit Mehrwert für sichere und gute Arbeit, Düsseldorf.
9
Labour Institutions as Drivers of Innovation - continued
Example Two: Involvement of the National IG Metall
in the Steering Commitee of the Industry 4.0 Programme
10
Kurz, C. (2013): Potenzial, Auswirkungen und Gestaltungsbedarf aus Sicht der IG Metall, Presentation at TU Berlin: p. 24.
Labour Institutions as Drivers of Innovation - continued
Example Three: Involvement of the regional IG Metall in the Activities of the Government
Programme „National Platform for Electromobility“
National Plan
Electromobility
IG Metall leads
AG 3 Qualification
Works Councils of Audi,
BMW, ZF + Regional IG Metall
develop Qualification Modules
for Electromobility
Duration 2013-2017
4 Showcase Projects
amongst others
Bayern/Sachsen
National Platform
Electromobility
Existing Workforce
Further Training and
Education of the existing
Workforce for newly
required Competencies
-For new Products,
Procedures and Processes
-Upskilling (i.e. 1000V and
Automatization)
Training
and
further
Education
Future Workforce
Future and Need
oriented Educational
Planning and Education
of future Employees in
academic and technical
Occupations
Challenge: The Coexistence of current and new Fields of
Activities and the associated double Competency Requirements
Meißner, H.-R. (2014)
Labour Institutions as Drivers of Innovation - continued
Example Four: Labour‘s Innovation Funds at Volkswagen
Collective Labor Agreement
„Zukunfts-Tarifvertrag“ 2006/2009
IG Metall & Volkswagen AG
Innovation Fund I – 20 Mio. €
p.a.
•
•
•
•
Project
Funding
Criteria
Since 2007
Strategic Site Development
Strenghtening of domestic
Sites
Enhancement of technological
Compentencies
For risky Projects at an early
Stage
The Project must have a
positive Impact on the Site
concerned and should contribute
to Job Security
VW (2014): Business Information, Wolfsburg.
Innovation Fund II – 20 Mio. € p.a.
•
•
•
•
Since 2011
Generation of new Fields of
Activities
Diversification
Searching for new Business
Models
Degree of Innovation (Idea, Technique or
Project must constitute a genuine Innovation)
Prospect of Profitability
Securing Employment
Implementability at one of the domestic Sites
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Innovation Fund II: New Fields of Activities
Alternative
Drive
Concepts
and
Components
Sustainable
Mobility
Raw
Material
and
Energy
Efficiency
New Fields
of Activities
Sustainable
Energy
Production
Health and
Ergonomics
VW (2014): Business Information, Wolfsburg.
New Vehicle
Design
Concepts
and
Components
Autonomous
and Mobil
Assistants
Prospect of
Profitability
and
Employment
Environment
Energy
Machinery
and Plant
Engineering
13
Conclusion
• Labour Institutions can function as
countervailing Power to Capital Market
Pressure
• They can also be a Driver of Innovation
on different Levels (Company,
Regional/Sectoral, Economy)
14