Innovations in the Services Sector: Rationalisation is not a Priority

The innovation activities of German service providers are by no means primarily aimed at reducing costs. Businesses consider it much more important that they develop new processes and behaviours in order that they are able to offer their customers improved services.

In the German industrial sector, however, the majority of innovation activities are aimed at reducing costs and increasing rationalisation. This is a finding of the latest innovation survey carried out by the Mannheim Centre for European Economic Research (ZEW) on behalf of the Federal Ministry for Education and Research (BMBF). Approximately 4,000 enterprises participated in the representative survey on innovation activities.

According to the projection of results, considerably less than 20 per cent of German service providers decreased their costs through process innovations in 1999. In the industrial sector, however, almost 40 per cent of businesses did so. This difference is also reflected in the rationalisation volumes of each sector. Whilst in the industrial sector, costs were reduced by more than 7 per cent through process innovations, such cost reductions in the services sector totalled only 4 per cent.  Providers of distribution services (trade and transport) reduced their costs by around only 2.5 per cent through process innovations.

Contact

Dr Norbert Janz, E-mail: janz@zew.de