Innovation & IP Asset Consulting
Convergence for divergent trends

TRADITIONAL COMPANY OF SILICON VALLEY HP FACING FURTHER CHALLENGES

As William Hewlett and David Packard began to fiddle in a garage in 1939 which then resulted in a large corporation, the foundation stone of Silicon Valley was laid. Today the company is faced with enormous challenges when competitors such as Apple and Samsung are not intended to further overtake. Through constant change of strategy and massive job cuts, the top management does not contribute to strengthening the work climate, motivation, and especially the power of innovation. In order to survive in the fast growing market continues, HP needs to learn to keep pace. There is no lack of money and the investors still believe in an upswing. What is missing are new, creative, groundbreaking ideas.

THE LEAD LESSENS IN SPITE OF EUROPES INNOVATION POWER

Munich May 2014: Although Europe continues to bring groundbreaking inventions on the market, the President of the European Patent Office in Munich, Benoît Battistelli, in his article of 20 May 2014 in Handelsblatt warned that the lead is diminishing. Although very strict procurement procedures of the EPA guarantee an actual innovation, thereby granting trivial patents and so-called “patent trolls” are prevented from competing against new economies such as China and South Korea. However, Europe must urgently optimize conditions for venture capital, research, development and invest a greater networking of academic and corporate world. To continue to compete internationally and to catch up on business areas such as digital communication and consumer electronics again, innovation-friendly conditions for companies must be created.

GERMANY MUST REACT ON CHINA’S GROWTH

Germany does no longer surpass China in its international economic relations, both as a destination for exports as well as a supplier. Likewise, direct investors have discovered the land for themselves: China lays second place after the U.S. and thus in front of all EU countries.

China is currently in a huge structural change. As actual incomes rise and a high-income middle class is created, followed by an increased focus on consumer goods and services, away from investment and capital goods. Germany must not make the mistake and only put forth on profitable business models and market segments. Reaction is a must because in the future China will be able to offer competitive alternatives, especially in the fields of mechanical engineering and electronics, and discover market segments for themselves, where Germany was the market leader. Especially in fields such as environmental, energy, new materials, food industry, health, education, entertainment and tourism industry, China’s rapid advancements are quickly. As from this result, many services, especially through the Internet and e-commerce, must be developed such as the home and export market, simultaneously with the result that Germany automatically will approach China as a market. It would continue to be a mistake to see China as a rival and thus to follow America. So far, the Chinese industrial investments have been positive and in the future, world trade will no longer be shaped without China.

NEW BCG STUDY WARNS AGAINST BIG THREAT OF CHINA FOR GERMAN ENGINEERING

Ralf Moldenhauer, Partner and expert for strategic business development at BCG warns:

Chinese challengers will lastingly threaten German engineers. The Chinese companies will further invest in research & development, will also in future offer more high-grade products, and furthermore continue to aggressively overtake established markets to acquire technologies, brands, and Markets.

Latest figures show China’s rapid growth in the global construction machinery market, which has grown fivefold in the years from 2006 to 2011 from 3 to 15%. Similarly, the share of sales of classic machines, optical and electrical products increased between the years 2008 to 2012 in the European Union.Germany’s share of sales in other EU countries fell by 4%. Exactly for these opposing developments warns BCG and appeals to German companies to not rest on their export strength and monopoly power.

Source: Die Welt, article by Tobias Kaiser on 03/27/2014: China’s companies threaten the German mechanical engineering

GERMANY LANDS ON PLACE 3 IN EU INNOVATION RANKINg

In the so-called Performance Innovation Union Scoreboard 2014 for Research and Innovation, Germany still falls in the category of innovation performance well above the EU average, but slips below Sweden and Denmark at rank 3, followed by Finland. Germany’s innovative growth grew strongly while Sweden’s growth rate is almost stagnant. Only in the area of ​​the science, regarding open, excellent and attractive research systems, does Germany fall behind the average. Denmark is here above all others this year’s front-runner.

When Europe is viewed as a whole, Switzerland retains its position as the absolute leader of innovation, and in global terms South Korea, the U.S. and Japan still stand before the EU. While the EU is catching up to the U.S. and Japan, South Korea’s lead stretches even further. In international comparison, the EU, however, is still before Australia and Canada as well as in front of the BRICS countries (Brazil, Russia, India, China, and South Africa). However, China is on track to close its gap of 44% of the innovation performance.

Less strong EU Member States must catch up and in a global context, the EU should not remain standing still. Above all, the culture of innovation needs to be further promoted with a focus on networking and entrepreneurship.

Patent Chief Beat Weibel settles on Quality instead of Quantity for Siemens in the Future

The technology group Siemens will change its strategy and intends to seek future higher-quality and more efficient patents with so-called patent families to fundamentally secure particularly important innovations. According to the saying “quality not quantity”. Currently, China is internationally the largest patent applicant. Last year, the company Samsung displaced Siemens being number 1 in the patent applications at the European Patent Office.

ANOTHER SUCCESS STORY IN A GARAGE OF SILICON VALLEY STARTED

 

Mountain View January 2014: For 3.2 billion U.S. dollars, Google took over Nest Labs, a manufacturer of digital thermostats and smoke detectors. The special thing about these devices is that they both conform to the preferences of their users as well as being controllable from Smartphones. Temperatures are automatically lowered when no one is home through integration of motion sensors. This success story is characterized mainly by a targeted patent strategy. After founding the company in 2010, Nest Labs began to secure the monopoly by a pro-active, early purchase of applications and patents. The two founders Matt Rogers and Tony Fadell were once significantly involved in the invention of the iPod and its development at Apple. Google does not only step into new business with the automation of households, but also secures data from millions of households. Even if the CEO Tony Fadell assured that the data will be used only to improve the produced products, Google’s acquisition sparked heated controversies around the topic of data protection.

 

 

German firms are insufficiently represented in China

Düsseldorf, August 2013: German firms indeed see high growth potential throughout Asia and particularly in China. However, the calculations by the German business journal Handelsblatt surprisingly show that German companies are rather poorly represented in China. The journal predicts dire consequences. The 30 DAX-Concerns in China earned € 115 billion, of which € 50 billion, however, account for Volkswagen only. That sounds like much, but corresponds on average just over 11% of revenues, while some DAX-Heavyweights don’t even reach a 5% quota. German companies still have a lot of potential in China. Given the situation in Europe, excellent prospects in China should motivate to perform above average in this county. According to well known business administration Prof. Karlheinz Kueting, “China must have highest priority.”

German laser company Trumpf buys Chinese competitor JFY

Ditzingen, October 2013: The German machine manufacturer Trumpf and global market leader in laser technology  buys 72% of his Chinese competitor Jiangsu Jinfangyuan (JFY). This is the largest acquisition in Trumpf’s company history. More and more German companies, especially of mid size, buy Chinese competitors or sector-related companies. The motivations is usually to ensure that the products are customized for Chinese needs. German products seem too expensive and the quality of Chinese companies is strongly catching up, so that the gap between German technology is no longer great, says the Handelsblatt journal in its issue of 17. October 2013.

Construction machine industry is dominated by China

Munich, April 2013: Chinese companies take over the top position in the construction industry says a study by the consultant agency Oliver Wyman. Caterpillar, Komatsu, Hitachi, Volvo and Liebherr are the largest companies in this field. However, taken together Chinese companies have the largest market share. In 2020 three Chinese companies will be in the group of the top five players. Moreover, Prof. Thomas Bauer, CEO of the Bauer Group and head of the German Construction Industry Federation has recently warned to underestimate the technical skills of Chinese engineers.