In the hour of courage
January 20, 2021
January 20, 2021
In recent years, Accenture has assessed weak points in the competitiveness of Germany’s leading industries. But now the COVID-19 pandemic has exposed major German companies’ inability to grow: Comprehensive transformation of companies is still lacking and dependance on traditional products and business models remains high. Very soon, this won’t be enough to compete against the major players in other geographies. Sales growth in Germany is already flattening and only a few large corporations show any signs of being headed in the right direction. The automotive industry remains the dominant sector, but no impetus is coming from that side either. German suppliers, in particular, are struggling as a direct consequence of low global demand.
Few leading industrial sectors, such as the automotive industry, are currently enjoying strong growth. The IT sector, in particular, is not growing enough to evolve into a leading industry.
Chinas is the only major economy that will emerge from the global pandemic better off, and the USA is likely to continue its own national economic development under Joe Biden. In terms of international competition, these two major economic powers are implementing strategic agendas much more ambitiously, quicker, and to greater success than Europe. To move forward, the EU must define its own role in global, institutional competition and bounce back with renewed confidence – as a unified and relevant economic power in the post-COVID world. However, political tensions complicate any development.
In Germany, short-term solutions to stabilize the situation in response to the pandemic are for the most part complete. Companies are once again seeking new growth opportunities and investing in digitization and automation. The creation of resilient value chains is more important than ever, as they can spread wider and around the world. Companies must also increase the transparency of their supply chains in order to prevent (further) shutdowns.
Increased resilience, especially of supply chains, is the most important target for business leaders in the coming months.
Since 2009, Germany’s export volume has risen sharply and become a crucial pillar of the economy. But right now, little evidence of this remains. Since the outbreak of the pandemic, silos in global trade have become even more prominent, while tendencies towards economic nationalism and self-sufficiency have become more widespread. Because of this competitive situation, it is important for Germany and its Top500 to develop new future-proof products. However, physical products will only remain globally competitive if they are linked to the digital world or supplemented by digital services. This also means rethinking customer interaction in digital terms.
For the German Top500, the focus can no longer be on opening up new growth markets. Main efforts must be on renewing the product and service portfolio and building partnerships and ecosystems. Along with sustainability, these are the key criteria for success.
As a conclusion to this study, Accenture emphasizes the following five ways in which large German companies can improve their competitiveness and create potential for new growth.
Climate protection and the circular economy are becoming important export items. At the same time, the strategy should aim at societal benefits.
B2B customers no longer buy products and services, they buy results – a measurable improvement for their business activities.
New business models require cross-industry cooperation. In the future, ground-breaking innovations will no longer be created single-handedly.
Europe needs digital infrastructure and new technologies to drive new business models and to become digitally superior.
In addition to new technologies, companies need a new mindset, more courage to experiment, data-driven processes, and key decision-making cultures.