Dipl.-Ing. Jürgen Reinholz: Co-operation and networks – An effective strategy for medium-sized businesses

Thuringia ties in with its tradition as a powerful economic location in the centre of Germany and Europe. As shown in the year 2006, Thuringia’s economy remains on a growth course. With an economic growth rate of 3.1 per cent Thuringia, out of all the federal states, lies in third place. The growth motor is the Thuringian industry: with a gross-value-added rate of 10.9 per cent a new above-average growth was record­ed.

This positive development is to be em­phasized all the more because it is borne by an economic structure that, as before, is dominated by small, medium-sized businesses. 87 per cent of the businesses have less than ten employees and 97 per cent have less than 50 employees. Only 0.3 per cent of the businesses are large-scale enterprises with more than 250 employees. In an environment with a small-scale-business economic structure, the devel­opment possibilities for medium-sized enterprises are difficult. Small and me­­dium-sized enterprises (SME) have to face numerous challenges, owing to their mostly limited personnel, technical and financial facilities. Typical prob­­lem areas are the recruitment of qualified personnel and access to specialized know-how. Furthermore, own research and development attempts as well as the constant modernization of product selection in many SMEs are often hardly commercially implement­able. Also, for many organizations ac­­cess to tightened, established market structures and entry into new markets is not simple.
Against this background commercial co-operation and networks have strate­gically proven themselves effective. Pri­­marily project-related co-operation ac­­­tivities have in the meantime become the order of the day for many organizations. The disadvantages related to the size of a business can be overcome through co-operation and networks. This in turn enables small enterprises with innovative products, processes and ser­­vices to gain market shares.

 

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Co-operation and networks are not just of interest to organizations, they are a necessity for modern economic policy. For they help to bundle strengths and better exploit regional development potential. They support the devel­opment of competitive clusters. Inter­linked enterprises and institutions re­­gionally concentrate themselves in a special technology or application field. This bundled know-how often, in an other­wise small-segmented economic structure, first creates the critical mass for a region to be of interest for further business settlement.

It is not the task of the state to dictate or force commercial co-operation. Through economic policies however, general con­­ditions and incentives could be set for co-operation and for the promotion of com­­mercial networks. This can for exam­ple be the support of ap­plications and business foundation centres and an ap­­plication-oriented research and devel­op­­ment infrastructure. Moreover it is econo­­mically-politically appropriate to strengthen sustainable economic sectors through goal-oriented organiza­tional and technological promotion. The enterprise is offered a well-developed educational infrastructure of universities, polytechnics and research institutions, in addition to the potential of well-edu­cated labour in the region and ac­­cess to re­­search and development.

On the subject area of networks and clusters we look primarily at the technology region Erfurt-Weimar-Jena-Il­menau in Thuringia. Thereby the city of Jena – as a centre of excellence in the areas of optics, medical technology, bio-instruments, solar and software – is a signboard for Thuringia. However, also in the periphery of this core re­gion, many things have started moving, for example, in the Eisenach area with its automotive supply industry or in the Schmalkalden-Meiningen region with its production technology and metal processing focal points.
If we talk about networks and clusters today it not only involves commercial co-operation in the areas of production or marketing. An important focal point lies in the collaboration of technology and development. A successful collabo­ration demands capable partners – both from a commercial as well as a scientific and research aspect.

Promotion focal points in Thuringia
Accordingly, it has been a condition for the innovative and competitive ability of the Thuringian economy to raise the standard of quality of applied research onto international level. For the enhance­­ment of the technological potential of the Thuringian economy, many young and innovative enterprises have further­more been promoted by the government. At the Thuringian universities and polytechnics excellent natural scientists, engineers and skilled employees are being and have been educated. The Free State has in the past years em­­ployed substantial means for the herewith related funding options.

In the 18th year after German reunifi­cation Thuringia can provide a competent business-friendly research landscape:


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• Non-university research institutions, in Jena the Beutenberg Campus with the Leibniz Institute for Natural Pro­d­­uct Research and Infection Biology (Hans Knöll Institute), the Leibniz In­­stitute for Ageing Research (Fritz Lip­mann Institute), the Institute for Pho­tonic Technologies, the Fraunhofer Insti­­tute for Applied Optics and Precision En­­gineering and the Max Planck Insti­tute for Biogeochemistry as well as for Chemical Ecology or in Ilmenau the Institute for Microelectronic and Mecha­­tronic Systems and the Fraun­hofer In­­stitute for Digital Media Techno­logy;
• Business-friendly research facilities like the Hermsdorf-based Institute for Tech­­nical Ceramics, the Thuringian In­­s­­ti­tu­te for Textiles and Synthetic Ma­­terials Research in Rudolstadt, the Institute for Joining Technology and Materials Testing in Jena or the Asso­ciation for Processing Techno­l­ogy and Develop­ment in Schmal­kaden;
• Universities and polytechnics – like the Friedrich Schiller University and the Jena University of Applied Sciences or the Technical University Ilmenau and the Schmalkalden University of Ap­­plied Sciences.

In the “Campus Thuringia” project all competencies of the universities and polytechnics are additionally bundled and interlinked.
In the Thuringian research landscape tradition and future are intermingled. Old strengths – Thuringia can look back at Abbe, Zeiss and Schott – in the area of optics or the scientific tool-building were resuscitated and developed further.

 

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New focal-points have been established. This is true for the areas of biotechnol­ogy, medical technology, microelec­tron­ics or environmental technology and re­­newable energies.

To have a good research infrastructure is one thing – to use it, another. The success of our funding policies is also deter­mined by whether enterprises and re­­search institutions can, amongst themselves, manage to activate a reliable and committed co-operation.

A focal point is the so-called “joint projects”. With these projects, combined research and development schemes of universities, research institutions and organizations should be implemented. The objective is, on the one hand, to directly develop innovative economic solutions. On the other hand, the re­­search institutions and universities are immediately sensitized as to the needs of the organizations and the market. A knowledge and know-how transfer there­fore takes place in both directions. With joint projects, in many cases, the foundation for long-term part­nerships is laid. A “win-win situa­tion” emerges for both sides.

Governmental funding is not exhausted in the support of joint projects. The continuation of research and technology support in the “Thuringia Technolo­gy” programme and the future initia­tive “Excellent Thuringia” with the “Per Excellence” programme are all build­ing blocks for the strengthening of innovation in businesses.

Strengthen networks, push the cluster process
A further point of departure for the strengthening of the Thuringian eco­nomic structure is the immediate support for networks (for example through the support of business branches). The network support is likewise a focal point in the comprehensive “Thuringia Technology” programme.
In the meantime numerous different net­­works have been established in Thurin­gia. These vary according to their thema­­tic orientation, their size and grate of organization. The established networks not only concentrate on the single relevant to­­pics of the network part­­ners, but beyond that cover a wide, ap­­plication-relevant spectrum. This spectrum ranges from the execution of re­­search and development, the possible technol­ogy transfer via vocational training and qualification and securing per­­sonnel requirements right up to opening new markets and public relations.

The networks combine the relevant parties of the value-added chain. They are constituted as juristic persons. And they have mostly become the driving force in the development of whole clus­ters. Networks that need emphasizing in Thuringia are: OptoNet (optical technology), automotive thüringen (automotive supply industry), PolymerMat (plastics manufacture and processing), SolarInput (photovoltaics, solar thermal energy), BioInstrumente (biotechnology/instruments) and Opthalmo Innovation (medical technology).

The existing networks have driven the process of cluster development not only as regards quantity, but also qual­itatively. This includes the co-operation of the different networks, the execution of workshops about current technologi­cal developments, the accompaniment of research and development schemes, the support of education and further education measures, the securing of per­­sonnel requirements and the acquisi­tion of new members or trade fair ap­­pearances.

According to the results of a survey compiled by the Thuringian Department of Economic Affairs, in fields like the optics industry or plastics processing, there is already talk of clusters in Thu­ringia. Other areas like automotive, solar industry or medical engineering have great potential to accomplish a success­ful cluster process.

For the existing Thuringia network structure the co-operation with other networks – also beyond federal state borders – has gained in importance. Those networks established in the framework of the “Economic Initiative for Central Germany” in the areas of automotive, chemistry/plastics or biotechnology/life sciences supplement the existing independent and regionally oriented net­­works through their nationwide collaboration. That creates critical mass and strengthens the international percep­tion of different economic focal-points in the east German federal states.
In Thuringia we have achieved a consid­­erable amount: Jena – City of Science 2008 – is today synonymous with lead­­ing technology, networking, dynam­­ics, inventive talent and entrepre­neurship. On the basis of a long-term technology tradition, new structures have devel­­oped since the start of the nineties that have helped Thuringia as a loca­tion to achieve overall new international prestige. Jena, as an example, shows which successes are possible when entrepreneurial inno­­vation and scien­tific know-how are com­­bined. However, that alone is not the recipe for success – in the same manner, goal-oriented support policies that create general conditions for the expansion of scientific and entrepreneurial potential are necessary. And another issue is deci­sive: existing networks must be main­tained. Scientific and political partners, just like the banks, should take the concerns and ideas of the entrepreneurs seriously. This is not only true for the marking of financing, but rather also for the joint advancement of the devel­opment of marketable products and the actual joint compilation of solutions to entrepreneurial prob­lems. To that effect the SME network structure helps. Net­works offer the participating organizations greater opportunities and more promising development possibilities than a lone warrior can acquire in a tough competitive market.

 

Hr-Reinholz_kleiner_neuThe author was born in Thuringia in 1954 and is the Mini­ster for Economic Affairs, Tech­nology and Employment in the Free State of Thur­ingia. He studied process engineering at the Merseburg Technical University. He worked at the Gummi­werke Thüringen for some years be­­fore working as a project manager and managing director of the Landes­ent­­­wick­­lungs­gesell­schaft Thü­ringen GmbH.