Digitalization and the transition that accompanies it are seriously challenging the business world. An individual who deals with this subject in great depth is Professor Manfred Broy, founding president of Zentrum Digitalisierung.Bayern. We spoke with him about the opportunities and challenges presented by digital transformation, the role startups play and where he sees danger lurking in the Munich ecosystem.
Mr. Broy, please introduce yourself once again!
I am the founding president of Zentrum Digitalisierung.Bayern. Before that, I was a professor of informatics in the field of software and systems engineering at the Technical University of Munich. I have always focused on questions regarding system design, system development and software development. In recent years, I have focused even more intensely on the interaction between the competence to develop software and the strategic tasks in companies from the standpoint of digital transformation.
A lack of fondness for software in SMEs
How well prepared is the Bavarian economy for the challenges presented by digital transformation? Which challenges do you consider particularly controversial?
The Bavarian economy has dealt with the subject of digital transformation in great depth in recent years. A whole series of initiatives has been created and there is a powerful movement, which also includes companies, that is quite advanced in the subject. What I find rather controversial is that SMEs and the producing economy have a lack of fondness for software. Companies need to quickly establish the relevant competences in this area, not only on an operational level, but also on a strategic one.
What kinds of fundamental change will digitalization involve? A large number of employees are somewhat frightened by digital transformation – should they be?
The changes associated with digitalization are dramatic and can be seen everywhere. They affect individuals just as much as they affect companies, organizations, and even political systems, society and culture. It is natural for individuals to view change with some concern and to be somewhat frightened by digital transformation. That being said, I do not think there are any alternatives. The only thing that will help will be to address the subjects in depth and, if possible, to consciously help shape digital transformation and carefully decide where you want to be involved.
Established companies can benefit from startups
In your opinion, what role do startups play in digitalization and our economy in general?
Startups already play an important role in digitalization. Its high speed often overwhelms established companies, which keeps them from being able to quickly advance in new business fields or technologies. For large companies in particular, digital change is often extremely challenging and requires a large amount of time. Startups are able to quickly take up new subjects and, technically speaking, do not have to deal with any digital transformation. They are able to work on new subjects on brand-new, fertile ground. This is of particular importance in Bavaria. Since we still have a strong economy, the subject of digital transformation and the role startups play in it are of particular importance for established companies.
How do you support startups and young entrepreneurs?
We support startups and young entrepreneurs in many ways. It starts with moderating several programs, such as improving entrepreneurship education at universities. We also work closely with startup centers and accelerators. Particular effort is also invested in improving the communication and contact between startups and established companies.
The importance of early interaction with customers and flexibility
To be successful, a startup needs to…?
I think it is crucial for a startup to have a strong focus on their market. I have seen so many startups with an idea that was good in itself, but then they failed to adapt the idea to specifically meet the needs of the market. That means that, particularly in the beginning, it is important to be flexible, willing to experiment and to rapidly adapt to your customers.
What is the biggest mistake a startup can make?
I think the biggest mistake a startup can make is to not have a close eye on the market. It is essential to be close to customers and to interact with them and markets early on.
Munich cannot afford to miss the turnaround
The trend of the year is…!
I would not say there is just one trend of the year. There is a whole group of trends. Of course the subject of artificial intelligence along with machine learning and big data are important topics at the moment. But that was also true in the last few years. Blockchain is a subject of intense discussion, but how important it might become is not clear yet. Other trends from recent years continue, particularly the Internet of Things, but also specific applications like autonomous driving.
What do you think about the Munich ecosystem and the local startup scene? What do you like and where do you see room for improvement?
I think the Munich ecosystem has major potential, yet some things are still in need of development. Sometimes I have the impression that, in Munich specifically, a kind of incumbency and saturation prevails. The economy works so well. Everything seems so successful, which is dangerous, because shifts and transformations in trends might not be recognized early enough as a result. I would like to see much stronger synergies and interaction between the various players. After all, digitalization is known for breaking down domain boundaries. And, as I mentioned earlier, the software orientation must get a lot stronger.
Thank you for the interview!