The corona pandemic has accelerated many global trends and put some topics in a new perspective. How can entrepreneurial solutions contribute to overcoming global challenges?
Markus Scholz: What I can see is that companies now have to legitimize themselves more strongly, both in their home and in their host countries. Companies have an instrumental reason to concern themselves with sustainability issues. To do this, they have to understand better what specific needs there are in their markets. This is the prerequisite for achieving a positive impact and also creating innovations that you can bring to the market. If companies pay attention to the unsatisfied ecological or social needs, they can go a long way.
Marcus Handl: In the past two years we have dealt very intensively with this question, since with transport we are serving a sector that is subject to very strong changes. We observe that the demands on transport systems have increased enormously in recent years. Global developments and trends contribute to the fact that not only the user behavior but also the investment behavior of our customers is changing. And what is new is that technologies, business models, but also the competition itself are changing at an unprecedented rate. We are currently experiencing a profound transformation that can even lead to the disruption of entire sectors.
What are the prerequisites for companies to be able to create solutions for societal needs?
Scholz: Before I specialized in business ethics, my main focus was industrial economics. There is a classic explanation for why Silicon Valley is so strong and why Holland in particular produces tulips. Clear framework conditions and transparency play an important role in this. For certain clusters, there is suitable financing and tax relief as well as support from research institutions and a correspondingly specialized supplier industry. And all of these factors are stable over the long term. In addition, the home market is simply strong: if you can sell tulips in the Netherlands, you can do it anywhere. Companies that find themselves in such clusters are highly innovative because they are mutually beneficial. They are more than the sum of their parts.
handle: Companies need suitable framework conditions, of course. And we need innovation in the company, but also in our environment. A functioning start-up scene therefore also plays a role for us as an industrial company. But we certainly also need support so that we can try out innovative solutions, ideally in real time. And it is important to come from a strong home market and to be able to develop and try out solutions there that can then be exported to the world.
Seifert-Gasteiger: I am now trying a classic cliché of start-ups: The error culture - although I prefer to speak of a culture of failure - is very central. It is well known that failure is handled differently in continental European countries than in Scandinavian countries or the USA. And as far as the other important factor of transparency is concerned - here too there are fault lines within Europe: What insights and information are available, how transparent are decision-making processes? And the mindset away from the harsh business environment is also important.
What do start-ups bring to solving global challenges?
Seifert-Gasteiger: I have the impression that start-ups don't necessarily think in terms of entire value chains. Therefore they cannot be expected to offer global solutions. But many start-ups bring important pieces of the puzzle at various points in value chains that can have extremely high global implications. And there are also exciting solutions in Austria. This ranges from fair fashion labels to Go Student, who contribute to equal opportunities in education, to Bitpanda, which are revolutionizing banking. You just have to take a closer look to make the contributions of start-ups to globally effective developments visible.
handle: You are touching a sore spot. Because on the one hand, the relatively small Austria has an unbelievable density of world-leading companies, especially when it comes to transport systems. On the other hand, however, one does not manage to work together in such a way that we can develop globally applicable solutions. This fails partly because we do not get any permits to test things in real operation. And because we are all active in the same, small market, we naturally also compete for the same essential things: These are resources, employees, start-ups, funding. So again: We have a great opportunity here in Austria to develop global solutions. But if you ask me today whether it works well, I regret to say: No.
Scholz: Something we know from strong clusters is that all players, from global corporations to universities to start-ups, share a shared purpose, a common big idea. Mr. Handl, you said that there are very exciting players in the transport sector who could jointly achieve a global impact. Why is it that they fail to connect with each other?
handle: Austria would have to define for itself: "We want to become the world's most innovative country in the field of mobility." And to implement this, a bundling of different forces would be necessary. For this you need industrial companies as well as start-ups, universities or research institutions. The sad thing is, we have all the requirements for it. Unfortunately, today we have to go to other markets in order to progress, because there we find more willingness to generate innovative solutions. It just needs an initial spark.
Seifert-Gasteiger: I worked in the public transport sector for a few years and got the impression that there is a lot of competition. This is often not with each other, but against each other. And that has a lot to do with transparency and especially with public contracts and funding. This has many implications in practice. Companies want open innovation, but that also means opening up the innovation process to the outside world. And here the rule is often: Please not with the competition. The fact that the competitive thinking is far too great represents an absolute hurdle for innovation. In addition, there is often the feeling that you are unique in what you can and do, and that everyone else is only withdrawing knowledge. We experience that every day.
New topic: What relevance do you see in the Sustainable Development Goals?
Scholz: First of all, the SDGs are a political requirement. A company can choose from the 17 goals where it can contribute what best or where it wants to be least harmful. Does that already create a real shared purpose? I do not believe that. Today, companies no longer perceive sustainability just as a compliance issue, but as a strategic issue. What becomes clear against the background of the SDGs, but above all the real development, is that we can no longer continue to do business as we did before. And that the necessary transformation will certainly not happen without a company. We need them as active players. And companies are becoming increasingly aware of this responsibility. It is important to realize that this is a genuine responsibility, because otherwise we will hit the proverbial cart.
Seifert-Gasteiger: There are many start-ups for which the SDGs themselves are the purpose. And I have the impression that this is done with full conviction. In the case of the large, established companies, however, I see that the SDGs have not really been internalized yet. Although there are now corresponding goals and reports almost everywhere, I do not yet see so clearly that it will trigger a real transformation in companies. At weXelerate, with the Circular Economy Alliance, we want to make a contribution to companies making faster progress here. I would like companies to look more often at the next ten years and see how the framework conditions change, which can put the business model under pressure. This would develop a new awareness of the problem much faster and direct a lot of energy towards innovation.
handle: As a company in the transport sector, we have no choice but to go in this direction. The whole industry is now aiming for sustainability. Our employees also expect a corresponding level of commitment from us - so there is also internal pressure. People like to work in companies that are dedicated to these issues. Can we do any better? Of course, it's a development process. Our company in particular is much more challenged today to look to the future and to keep reinventing itself. The pandemic certainly also plays a role. We are all facing a global challenge, and if we take each other by the nose, then we have withdrawn more to ourselves and less networked in the past few months. This culture of togetherness and cooperation has to emerge anew, and that requires a bit of normality again. And then we have to take off, no question about it.
Thank you for the interview.
Marcus Handl is Head of Corporate Development at the toll technology and telematics provider Kapsch Traffic Com.
Markus Scholz is the founder and head of the Institute for Business Ethics and Sustainable Strategy (IBES) and holder of the endowed professorship for Corporate Governance & Business Ethics.
Maria Seifert-Gasteiger is Chief Innovation Officer at weXelerate, a Vienna-based innovation hub and network for large companies. Before that, Seifert-Gasteiger was responsible for the innovation agenda at ÖBB.