Companies postpone investments in new technologies

Because of the pandemic, many companies are forced to postpone costly investments in future technologies. Other companies are using Corona to become more digital.

In the Frankfurt running shop, the running style is measured with a digital pressure measuring plate and then analyzed

HJost Wiebelhaus shows a proud grin inside the mask. Then he opens the door to his running shop in Frankfurt and spreads his arms invitingly. Of course, for him as a retailer, too, the past few months have been a constant up and down between opening and closing in the pandemic, a mixture of hope and fear. But Wiebelhaus not only let all this endure himself and his running shop near the Konstablerwache, but also sought his salvation in modernization.

In the runner market, which was booming during the Corona crisis, its salespeople advised customers virtually and via chat, and whenever possible, the store offered its customers to make appointments online for personal advice. In addition, Wiebelhaus took money into hand to invest in a new, digital system for analyzing the individual running style. “All of this helped us to survive the crisis,” said Wiebelhaus at the premiere of the #godigital series of events, which was initiated by the FAZ together with the Platform for Innovation in Germany and the Fraunhofer Institute for International Management and Knowledge Economy (IMW) .

The focus was on the question of whether the pandemic had triggered a digitalisation boost in companies. According to Fraunhofer Professor Thorsten Posselt, the study specially organized for the digital discussion series showed that 92 percent of those surveyed helped digital technologies to cope with the pandemic – but only 52 percent opted for digital business models.

Posselt sees a danger in this. Short-term investments in new technologies are in a position to stabilize companies, be it with the help of video conferences or digitized business processes. A business model, on the other hand, cannot be further developed in this way, says Posselt. “The digitization measures caused by the corona are primarily ad-hoc innovations with little development effort,” reports the scientist who heads the Fraunhofer IMW in Leipzig.

Investments in AI postponed due to Corona

In contrast, since the outbreak of the pandemic, many companies have been forced to postpone more expensive investments in future technologies, for example in areas such as artificial intelligence and robotics. This is also confirmed by the industry association Bitkom, according to which every third company had to cut back investments in digital projects due to the crisis.

Posselt believes that this could be due to the obstacles that companies persist in developing new technologies. “In very few companies there is a culture of permanent progress.” In addition, venture capitalists and other investors in Europe expect rapid profitability to be widespread – instead of focusing on growth first. “We recognized the potential of digital technologies late in Germany and Europe.”

Error culture not sufficiently developed

FAZ editor Carsten Knop also shares this experience, who pointed out that the error culture in many companies in Germany is not sufficiently pronounced and that questioners often stand in the way of idea generators. In positions of responsibility, there must be a greater willingness to carry the torch of change into companies and to take more risks with innovation projects.

The pandemic has just shown how quickly companies sometimes have to change. For example, the Aschaffenburg parcel service provider DPD first had to recognize within a few days that business with business customers was declining, but that with private customers was growing rapidly, as Michael Knaupe, who is responsible for business development and user experience at DPD, reported. Previously introduced digital technologies would have helped the company to shape this change and to cope with the increased volume of parcels, which was 13 percent in Germany last year.

Making better use of basic research in companies

The company wants to establish itself as an innovation leader in the competition among parcel service providers and relies on technology, for example by allowing customers to reroute their parcels at short notice. In order to realize such innovations, however, you always need a willingness to change, which is exemplified by the management and supported by the employees.

Knop and Posselt pointed out that this sometimes works better in other countries than in Germany. There is often much more knowledge in basic research than is actually used in practice, says Posselt. Networking has to get better here. In addition, the crisis has shown that it does not always have to be about major, disruptive changes, but that platform technologies in particular are currently successful because they play on existing markets more easily and better than the competition established there. As examples, Posselt named the used car platform Auto1 and Flixbus from Germany in addition to the large American platform groups such as Google and Amazon.

Even at retailer Jost Wiebelhaus, it was small changes that got him through the crisis well. Many of these digital innovations would also endure, he said. But not everything either. In the end, there is no substitute for personal advice in the store instead of via chat.