BERLIN: The innovation activity of German SMEs has contracted for the third year in succession. Only 28% of small and medium-sized companies recently invested in innovative products or processes, as confirmed by the new KfW SME Innovation Report.
The share of SME innovators is therefore currently lower than in the 2007-2009 period affected so heavily by the financial crisis. The KfW Innovation Report covers innovation activity between 2011 and 2013 – these are the most up-to-date representative figures available. Product innovations have fallen particularly sharply, while process innovations have dipped only slightly.
By foregoing innovations, small and medium-sized enterprises also pass up on the opportunity to exert a positive impact on their business success. According to the KfW study, sales revenues and employment numbers grow roughly two-fifths more quickly in innovative SMEs than in companies which do not aim to achieve any product or process innovations at all. Their return on sales has risen by 7% in two years compared to that of non-innovative small and medium-sized enterprises.
