“Start-ups Take the Lead in Big Data”

The digital transformation is crucial for the German business landscape. Young companies in particular can contribute to making Germany more innovative. Hanna Hottenrott, head of the Research Unit “Economics of Innovation and Industrial Dynamics” at ZEW Mannheim and professor at the Technical University of Munich, explains:

“When it comes to analysing big data and utilising digital technologies, start-ups are taking the lead. They tend to be more flexible, risk-taking and innovative than established companies. Moreover, they have significant advantages in developing new business models and successfully bringing them to market. When start-ups leverage the potential of big data, they enhance their long-term survival and success.

However, our research results also show that the use of big data carries risks. The skill requirements for new employees result in significantly higher personnel costs. The implementation of big data in companies can fail, thus jeopardising the entire business model. Finally, efforts to establish efficient business structures for the use of new digital technologies can increase the uncertainty with regard to revenues and profits, posing a threat to the stability of start-ups, especially in the short and medium term.”