Automotive in Germany: Don't spill the beans - go big!
In Germany, 7% of all jobs come directly or indirectly from the automotive industry. This is also relevant for people without cars, because if this industry is doing badly, it has an impact on society as a whole. From this point of view, it is shocking how little is invested in the automotive industry. In the seven years from 2011-2018, the USA invested around USD 56 billion in automotive start-ups. In the same period, China invested more than USD 30 billion. And Germany? Only around one billion.
These figures come from Florian Nölla German investor (Video). The presentation is about the investment scene in Germany, not about Automotive. Nevertheless, the two topics are intertwined. After all, innovation is one of the most important drivers of the economy. Innovation can also come from large corporations and SMEs, but start-ups have always been the main source of innovation.
Structural differences
Of course, we have to be careful with such figures. After all, Germany is structurally very different from many other countries. The German SME sector and the "Hidden champions" are a greater source of innovation than in many other countries. In addition, the fact that COVID-19 a lot is being made available for innovation, especially digitalization. A large part of the programs is aimed at enabling established companies to quickly switch to digital business models. This is an opportunity for SMEs to reposition themselves now. To name just one example, the program Mittelstand Innovative & Digital is designed precisely for this purpose and is not really suitable for start-ups.
Seize the opportunity now
COVID-19 in particular is a great opportunity to catch up now. The funds are comparatively easy to raise. Theoretically, the staff also have less to do, but in my experience it looks different. Although production has been reduced in many places, engineers are busier than ever.
The situation doesn't look bad for start-ups either. After all, we can assume that the economy will pick up in nine to fifteen months to make up for what could not be done during corona. Low interest rates are also making investors desperate for investments.
Nevertheless, Florian Nöll's figures are thought-provoking. For Germany to remain world champion in automotive over the next ten years, we would have to increase our investments a hundredfold. So: roll up your sleeves and get started!
Photo by Alex Suprun on Unsplash
