Innovation projects at risk

Lamenting the shortage of skilled workers is nothing new, although companies and institutions have not exactly helped with all the staff reductions over the years. Investing in the "support and development of employees through training, continuing education and reflection" is certainly worthwhile. This is because the best way to have great employees is to train them yourself, underline Martina Brüssel and Samantha Stella.

They write: "you'll be hard-pressed to find more loyal, more motivated and better trained skilled workers in the job market". However, this is where education and training policy also comes in. It must no longer be focussed primarily on increasing the proportions of school leavers with the university entrance qualification and students.

The view that the German economy, together with its so-called hidden champions, can continue unchallenged for decades to come is a risky bet to place on the future. Just how innovative companies will be and how innovative they will remain in the future, is critical.

Shortage of academics is less dramatic

Discussion around this topic has been rekindled as a result of the joint study "Labor Shortage and Innovation" by the Leibniz Centre for European Economic Research in Mannheim (ZEW) and Prof. Jens Horbach of the Augsburg University of Applied Sciences. It provides evidence that, in particular, firms actively engaged in innovation have a shortage of skilled workers: namely 43.8 per cent compared to 39.6 per cent of companies in the economy as a whole.

According to the study, the lack of employees with practical vocational education and training leads to innovation projects having to be abandoned. This is less frequently the case where there is a shortage of academics. For companies with a high proportion of academics, the study shows that it was also easier to find appropriate personnel to fill vacancies. The findings are based on data from the Community Innovation Survey for Germany from the years 2017 to 2019.

Enhancing vocational education and training

In light of the results, Dr. Christian Rammer of the ZEW and co-author of the study stated the following: "In order to advance innovation, the German economy requires a good mixture of the two forms of training, vocational and academic." He calls for greater recognition in society and improved financial incentives so that more people opt for vocational education and training, particularly in production and IT.

The new agreement on the Alliance for Initial and Continuing Education and Training 2019 to 2021, signed by the federal government, business associations and trade unions in the summer of 2019, is a step in this direction. The parties to the agreement want to refocus their areas of activity and measures and in doing so consolidate vocational education and training, with its advanced training offers and career pathways, as an equivalent alternative to academic training. This includes, for example, increasing financial assistance for vocational training , updating the grant for upgrading training, and facilitating access to training support for refugees.

Employing refugees

The latter may be of interest to small and medium-sized enterprises in particular. They often find it harder than large corporations to attract trainees and skilled workers. Employing refugees is a way to address staff shortages. Greater diversity within the workforce brings new stimulation, not least for innovation. However the challenges involved must not be underestimated, warn Theresa Köhler and Kerstin Ettl in the book chapter "The integration of refugees in small and medium-sized enterprises (SME) – case studies from practice". Cultural and language barriers need to be considered, acceptance and motivation need to be maintained and bureaucratic hurdles need to be overcome.

Innovation through cooperation

Another way to enable innovation for businesses with scarce resources is introduced by Felix Becker et al: The open innovation strategy (OI). "This is centred on collaboration between various partners such as external research institutions, universities, knowledge communities and in particular customers. The main idea of OI is the opening up of the organisation so that expertise from external stakeholders can also be included, so that internal and external flows of knowledge are combined, and innovation focused on the user can be facilitated," explain the Springer authors in the article "Open SMEs: innovating together using action design research and design thinking." They recommend the action design research approach in particular for companies with no experience of OI.

According to the authors it offers a tried-and-tested framework for this type of cooperation. In conjunction with the design thinking method, companies can use this to develop innovative and customer-oriented solutions and at the same time establish appropriate collaboration within the organisation. (Page 3)

Don't be afraid of making mistakes 

Dr. George Kraus' specialist article "How big is your innovative capability?" compiles a few basic measures showing how managers can drive forward the innovative capability in their organisation.

Put your employees in situations where they can experience what's "going on" in the markets - for example in emerging economies, with technology leaders, in related sectors or with companies which have overlooked market development.

Reward lateral thinkers and forward thinkers - even if their ideas cannot be implemented. There must be a palpable sense that searching for new solutions and methods is desired.

Rules, structures and defined processes are not an end in themselves. Their purpose is merely the achievement of objectives and they must be regularly scrutinised.

Praise and reward employees who dare to try something new and take calculated risks - even if their attempts prove unsuccessful. People will not strike out in new directions if they fear sanctions.

Arrange your organisation into "creative islands" in which junior staff and experts can operate as entrepreneurs. These creative labs often generate great ideas and business models.

Specifically address questions relating to the future in meetings, for exaple what are the new developments, and what developments might be on the horizon? What does this mean for us? What opportunities and risks does this present for us?