When SMEs and startups collaborate, not only do both sides benefit from mutual expertise, but satisfaction with the collaboration is also generally high. This is the conclusion of a study by the German Economic Institute (IW). However, too many hurdles still hold companies back.
According to the study, medium-sized companies that network with startups usually pursue one of three goals: to develop new technologies, Digitalization They can shape their business or develop new products and services. Startups contribute the know-how that established companies lack to implement these solutions. In return, they benefit from their experience, for example, in process management. Follow-up orders are also not uncommon. The evaluation of these collaborations is predominantly positive. 69.5 percent of family businesses are (very) satisfied, while only 2.9 percent were negative.
In 2018, almost half of medium-sized companies in Germany collaborated with startups, according to the IW study. Large companies with 1,000 or more employees are particularly open to this, with 63.6 percent of them having experience with collaborations. Among smaller family businesses with fewer than 99 employees, however, only one in three (33.3 percent) has done so. Collaborations usually take the form of project-related partnerships (31.2 percent), but customer-supplier relationships are also common (24.5 percent). Minority shareholdings (10.1 percent) or even acquisitions (7.2 percent), on the other hand, are rather rare.
Cooperation hurdles between startups and SMEs
So why don't more SMEs cooperate with startups when it works so well? Almost half (48.8 percent) of the companies with experience with cooperation cite different corporate cultures as the main obstacle. The study authors particularly emphasize the contrast between the long-established, continuity-oriented structures of SMEs and the flat and flexible hierarchies of startups. But different financing options also play a role. Other frequently cited reasons include difficulties in defining common goals (30.7 percent) and resistance within the company (29.0 percent).
For SMEs without collaborative experience, different corporate cultures also rank first among the obstacles, albeit with significantly less agreement. Only 31.5 percent see this as a potential problem. Potential difficulties in defining goals also come in second place, with 21.4 percent. Fear of unreliable startups ranks third, with 16.9 percent. In general, significantly more companies without collaborative experience believe that no problems will arise (47.3 percent) than those with experience (23.4 percent).
Overcoming hurdles
To minimize the problems mentioned, the study Experts surveyed identified several possible solutions. For example, digital collaboration platforms should be used more intensively, as they facilitate networking and promote collaboration – especially given the geographical separation between rural SMEs and urban startups. The report cites several examples of this, including Munich Startup. Furthermore, the experts call for an expansion of digital infrastructure, which is still considered inadequate even in urban centers. The general framework for collaborations also needs to be improved, for example, by reducing bureaucratic hurdles or providing additional government funding.
About the study
The analysis is based on an evaluation of the BDI Family Business Panel from autumn 2018, for which larger medium-sized companies were surveyed about their collaborations and experiences with startups. In addition, several company surveys on the cooperation behavior of startups and medium-sized companies were taken into account, such as the German Startup Monitor and a study by the Competence Center of the Rationalization and Innovation Center of German Business. In addition, eleven guided expert interviews were conducted with medium-sized entrepreneurs, startup founders, and experts from associations.
