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HANNOVER MESSE 2020, 20 - 24 April
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Digital Ecosystems

Small companies falling behind

Although more and more German SMEs are investing in digital technologies, the investments made by small companies remain low. This is the finding of a representative analysis by KfW Research.

24 Apr. 2019
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Small companies falling behind (Chart: KfW)

The survey conducted by German state-owned development bank KfW covers the years 2015 to 2017. It found that during this period, approximately 30% of German SMEs had successfully completed digitalization projects – up 4% on the previous period. In 2017, however, SMEs invested just €15 billion in their digitalization; although this represented a €1 billion increase on 2016, at an average of €17,000 per company, the level of investment was low. KfW Research established significant differences depending on the size of SME: Mid-size companies with 50+ employees undertook twice as many digital projects as small companies with fewer than five employees, and the sums invested were 24 times higher. The researchers express concern that SMEs could therefore split into relatively big, largely digitalized companies and small companies that will fall behind.

One reason why small companies are reluctant to digitalize may be that investment in digitalization does not always pay off directly, as a study published by Capgemini last year shows. Many companies find it hard to decide on a concrete digitalization strategy: Those responsible find it difficult to find the right balance between the need to develop existing products and the need to launch new and networked products on the market.

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