Bosch chief warns that Germany is lagging disruptive start-ups

The chief executive of Bosch, the privately-owned technology conglomerate, has warned that Germany is failing to keep pace with disruptive business models developed in Silicon Valley.

Volkmar Denner cited the example of ride-sharing service Uber, which threatens to make taxi dispatch offices obsolete and has faced a backlash in Germany. 

"Uber is not a revolutionary technology, it's a business model innovation - and there we are not good enough yet," he said. "That's where I see the biggest threat." 

His comments are likely to fuel further anxiety in Germany that its engineering companies - the bedrock of the economy - could be side-swiped by rapid advances in connectivity and big data.

Advancing the industrial internet - known in Germany as Industry 4.0 - is a top priority for the German government but Mr Denner believes that Germany and Europe must move faster and that a more collaborative approach is essential.

Bosch is currently one of the few German members of the Industrial Internet Consortium - a trade body whose co-founders include General Electric, IBM and Intel that seeks to encourage interoperability and set standards for internet-enabled industrial systems. Siemens joined the body this month. Bosch also formed a joint venture in November with ABB and Cisco to develop an open software platform for the smart home.

"There are high speed trains underway in many parts of the world and we must ensure we also have the same speed," Mr Denner said.

He warned that among the Mittelstand - Germany's famed small and medium sized businesses - the opportunities and threats posed by advanced connectivity were still not fully understood. 

Bosch's diverse activities - its products span advanced automotive systems, home appliances, building security and energy management - give it a broad perspective on major shifts in the tech industry such as autonomous driving, wearable technology and the smart home. 

The company's micro-electromechanical sensors are contained in half the world's smartphones and it supplied Google with components for its prototype driverless car. 

Mr Denner said Europe was very capable in launching start-ups but lacked a venture capital community able to help these companies at a later stage when double-digit and treble digit million euro investments were needed to build scale.

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He noted that Uber had completed a $1.2bn funding round in December, valuing it at $40bn. In comparison, MyTaxi, a similar Hamburg start-up that connects passengers with the nearest available taxi, received only a fraction of that amount before it was acquired last year by a Daimler subsidiary. 

"That's our problem - we have no possibilities to give such a company [$1.2bn] in capital and to say: we will forgo profits for years but [in return] you'll be the global leader in all markets where there are taxis," Mr Denner said.

Bosch's sales climbed 6 per cent last year to €48.9bn while its operating profit was about 6 per cent of sales or almost €3bn, according to preliminary figures released on Friday.

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