Mr. Oswald, as the person in charge of Baden-Württemberg International (bw-i), you’ll be the first to know that internationalization is coming along well in the German economy. What opportunities and challenges do you see for small and medium-sized enterprises (SMEs) in Baden-Württemberg? And in particular, what obstacles do you believe these companies need to overcome?
Time and again on our delegation trips abroad, I get to see what major opportunities there are to go international. On the one hand, it allows companies to access new sales markets and enjoy new growth. On the other, they can benefit from the lower production and procurement costs, or access to raw materials, especially in newly industrializing countries. I find one advantage particularly important: International competition promotes companies’ ability to innovate. Companies with foreign operations spend almost twice as much on R&D as companies with no overseas activities. Ultimately, companies that make the step abroad safeguard their competitiveness and jobs back in Germany.
But internationalization also has its challenges, especially for SMEs. One should not underestimate the cost of management in developing and implementing an internationalization strategy. Target markets have to be defined, the specific conditions in each market have to be understood and risk has to be analyzed – and to do this, you need the financial resources. Another challenge is the bureaucracy, the rounds of approvals and property rights in each of the target countries. For a company with 150 employees, this is no mean task. This is why the bw-i has set up its own office in China – one of the most important growth markets. The office is in Nanjing to help SMEs from Baden-Württemberg enter the market.
bw-i celebrated its 30th anniversary in 2014. How has the nature of your work changed over the past three decades?
Our company was set up in 1984 as the Baden-Württemberg Export Foundation. Its aim was to help SMEs with their export activities. As the years went by, we took on new activities. The last time was in 2004, when we were given the job of helping universities and research institutions in the state with internationalization. By the way, this combination between business on the one hand and science and research on the other makes us unique in Germany. In terms of company support, our focus has now shifted. It used to be about helping small and mediumsized companies to enter new foreign markets, whereas now the emphasis lies in exploring collaboration between Baden-Württemberg and foreign companies, as well as universities and research establishments. The programs offered by bw-i also make a contribution to more intensive exchange between business and science and academia.
It’s not just business that is subject to more global competition than ever before, the same applies to science and research. bw-i helps universities and research establishments in Baden-Württemberg with their internationalization efforts. What challenges does this process bring for the German university and research system?
It’s right to say that globalization is resulting in increasing competitive pressure for our universities and research establishments; they’re competing for the best grey matter and the best collaboration partners. Since more than 90 percent of global knowledge comes from outside Germany, we have to tap into this potential knowledge for our research and work, with the best scientists and most innovative researchers, in all corners of the globe. At the same time it’s important to improve the appeal of Germany to foreign scientists, professors and students. This is linked to another challenge in internationalization for our education: Science and business need a new, up-and-coming generation of highly educated people who are versed in internationally relevant issues – and to answer this demand, the universities have to offer the right degree programs and become more international in all areas. This ranges from setting up international partnerships and exchange programs to participating in cross-border projects with international partners, integrating international aspects into the curriculum and recruiting people with international experience. bw-i provides the universities and research establishments in the state with support and supervision to help with this internationalization process, providing relevant information, which helps create impetus, even across multiple establishments.
If the issue is internationalization, then one aspect that mustn’t be forgotten is technology transfer. What aspects do you consider particularly important in this respect?
For industry, internationalization stopped being a one-way street a long time ago. In some areas it’s now evident that the drive to establish a foundation of technological know-how – in countries like China, India and Korea – was so successful that the bedrock of leadership in future markets like electric mobility is no longer automatically in the western industrialized nations. As a consequence, it’s becoming increasingly important for German companies to engender exchange with foreign partners in more challenging areas. We know from experience that this is much easier for big companies than our SMEs. As I said before, lining up collaboration abroad for small and medium-sized enterprises in the southwest is part of our core business. We organize events in Germany and elsewhere to provide a platform to facilitate technology transfer and kindle innovation processes.
Steinbeis and bw-i have been working together successfully for years now, on a variety of projects. Where do you envisage areas to develop this collaboration in the future, especially when it comes to technology transfer?
The two organizations have been collaborating successfully for some years, especially on strategically important projects. For example, we took internationalization of Micro-TEC Südwest (the leading business cluster) forward as part of the MicroTEC Worldwide and Pro-Excellence projects. Insights from these research projects also laid an important foundation for the request for proposals for the business cluster agency ClusterAgentur Baden-Württemberg (CABW). CABW was set up by the Ministry of Economy and Finance in late 2014 with the aim of making cluster management more professional, and it’s receiving support from VDI/VDE, Steinbeis and bw-i. There’s a further technology transfer collaboration on the horizon as part of CABW’s activities. The different technologies and application areas provide a rich breeding ground for activities, often spanning different business clusters, and if these are cross-border, some of them will be jointly implemented by Steinbeis and bw-i.
Jürgen Oswald has been director of Baden-Württemberg International (bw-i) since 2012. bw-i is the competence center for the internationalization of business, science and research in the state of Baden-Württemberg. A political scientist, Oswald was previously head of the units responsible for location marketing, business cluster policy and foreign trade at the Baden-Württemberg Ministry of Economy and Finance.
Agency for International Economic and Scientific Cooperation (Stuttgart)