What competes with technology is not technology

"In many industries today you no longer compete with products, but with technologies" - Inclusive Productivity

"In many industries today you no longer compete with products, but with technologies"

August 14, 2020 / Christoph Geyer, Ben Schröder

A large part of the German economy is so far not very innovative. This is also shown by a study recently published by the Bertelsmann Foundation. This also affects the productivity of society as a whole, which has stagnated in Germany for years. Why is it that too little is invested and innovated in SMEs in particular? What could politics do to improve the framework conditions? We want to answer these questions as part of our series “Productivity from a corporate perspective”. Representatives of medium-sized companies that are in the process of automation and digitization will have their say. In the second part of our series today: Christoph Geyer, CEO of Saertex, a leading company in the production of composite materials made from glass, carbon and aramid fibers.

Ben Schröder: Mr. Geyer, Saertex's headquarters are in Saerbeck, a small community in the north of Münsterland, which is entitled to call itself the “NRW Climate Commune” because of its services to environmental protection. As a company, how much do you benefit from the commitment to environmental protection at your location?
Christoph Geyer: The issues of sustainability and resource conservation are an important part of our corporate philosophy. There is cooperation with the municipality itself on various levels: It starts with the subject of vocational training and ends with the bio-energy park here in Saerbeck. Among other things, there are wind turbines in which our materials are installed. We are also closely linked to issues relating to environmental and climate protection through our products. The climate community itself is also a crowd puller. Here groups of visitors from all over the world shake hands and explore how the climate commune model works.

Saertex describes itself as a "hidden champion". Most people will probably not be familiar with your company. Can you explain to our readers which products Saertex develops and manufactures?
We are a family company founded in 1982 and are based here in the middle of the Münsterland. Textile production has a long tradition in this region. In its beginnings, Saertex also produced classic textiles such as tablecloths and towels. Even today, roughly speaking, we are still active in the textile industry, only that today we no longer process cotton, but glass, carbon and aramid fibers. We manufacture technical textiles for lightweight construction. With these materials you can save up to 80 percent of the weight compared to steel, aluminum and concrete. Our products can be found in airplanes and wind turbines, for example. Our second business area is trenchless pipe rehabilitation. In this area, we produce hose liners from the glass fiber textiles we manufacture. These liners are inserted into broken sewage or drinking water pipes, so that a healthy pipe is created in a broken pipe - and without the road having to be torn open.

The world has changed rapidly in recent years. For a medium-sized family company like Saertex, what have been the most striking changes in recent years?
We are still concerned with the topic of globalization. We are active on all five continents and work there for the local markets and the local global players. This means that we have customers all over the world, whose needs differ greatly in some cases. In addition, of course, the countries in which we operate also differ. For example with regard to the existing infrastructure and the organization of the local supply chains. That is challenging. In addition, the energy transition represents a significant change for us in recent years - with enormous opportunities for our products. Renewable energies are not only used in Germany, but worldwide. Here we are challenged to develop ideas for different countries and thus different requirements.

This presumably requires a considerable amount of innovative strength in the company ...
Exactly. Saertex will never be the cheapest on the market. There will always be a company that will try to imitate our products and then sell them for less. That is why we always have to trim our products, always develop them further, always be one step ahead. This is what our customers ask of us too. Think of the rotor blades of wind turbines. These are getting longer and longer, which poses new challenges for the materials we manufacture.

In the study “Innovative Milieus. The innovative ability of German companies ”the authors came to the conclusion that a large part of the German economy has so far been little innovative. What would you say why that is?
Many German medium-sized companies remain in their current state. Changes through innovations have become rare, people feast on past successes. Today, competition takes place on a completely different technological level. In many industries today you no longer compete with products, but with technologies, such as the manufacturing method. It is possible that many companies have not yet adapted to this and therefore fail in the long term. Adding innovations is the definitive prerequisite for surviving global competition.

Should the state intervene here and support medium-sized companies in their innovation activities?
At Saertex, we see the state's actions as positive. Of course, we benefit from a great infrastructure, good educational standards and a relatively high level of planning security through continuity in economic policy. There are also a variety of cooperation and funding opportunities that can be accessed to support research projects. The state also played an important role in the energy transition and initiated innovations with a pioneering spirit.

Now let's get to the effects of the coronavirus. How has Saertex experienced the pandemic so far?
So far we have managed the pandemic well. The coronavirus hit all companies with incredible force and dynamism. We set up a task force very quickly, introduced a staggered shift start and distance rules, created additional changing rooms, procured disinfectants and masks, and sent the entire administration to the home office. A wide range of measures. In the meantime, analogous to state action, we have started to relax the measures step by step. I would like to emphasize that the pandemic has not yet been defeated. It is important to keep this in mind.

To what extent has the coronavirus harmed business?
We had customers - mainly in France, Italy and Spain, but also in the USA and Brazil - who had to close their factories overnight, which meant that these orders were lost for us. Fortunately, we were able to compensate for some of these failures with increasing demand from other customers. We also have plants in the USA and Brazil. You can see for yourself in the news how badly the virus is currently raging in these countries. In some cases, we lose orders straight away because there are virus outbreaks in our customers' factories. So there can be no talk of normality yet. To this day, however, the business effects are manageable.

Is Saertex still taking something positive for the future from the crisis?
The coronavirus has accelerated many developments, especially in the field of digitization. It is now quite normal to meet and discuss digitally instead of in a conference room. Many who have resisted these developments up to now are now realizing that it works after all. This awareness helps to give innovation and change a push for the future. I think that in a crisis like this there are always losers, but also winners. Namely the companies that are growing, developing new ideas and opening up new markets and business areas. We will try that too. We see the opportunities and find ways to circumvent the obstacles.

Other blog posts that have appeared so far as part of our corporate series:

Roland Bent (Phoenix Contact): "You can only be innovative to a limited extent from the laboratory"