WirtschaftsWoche: Mr. Schwedler, Germany, long known for its engineering  for its engineering skills and as a world export champion across the The global economy falls behind in international comparison. How   could that happen?

Christian Schwedler: We have become too comfortable in the comfort zone, the  Efficiency trap, set up. We all master the core business, work optimally and satisfy customers.  

But these are the best conditions for economic growth.  Success. What is the problem?

The radically innovative. We need both worlds: Core business and   transformation. However, they have very different properties and  sometimes require contrasting working methods and mindsets. Routine here,   zero errors, efficiency – error culture, experimentation,  entrepreneurial courage. We have to master both.

Is this precisely the balancing act that you think is lacking?

We want to drive the transformation forward, but we always try to do so  again with the established ways of working. We don’t even get into the  radically innovative mode. That is why we as   business location and that is why many managers are unsettled.

They propose a rule of thumb: 70 percent of the innovation budget goes into the core business, 20 percent into adjacent areas, ten percent into genuine innovations with disruptive potential. How do you distinguish between the last two categories?  

Let’s take autonomous driving! On the one hand, it’s still a car, but the technology is so new that it needs to be experimented with. It is  Therefore, it is more likely to be located in the adjacent area, i.e. the 20 percent, in the transition between incremental and radical. But: It could be the  Change the business model of car manufacturers, because nobody buys a car anymore and just calls a driving service like Uber. That would then be a  disruptive game changer, we are at the ten percent mark. Companies could lose out if they don’t even invest in the 20 percent sector.

Exactly. It is important to raise awareness of the fact that different types of innovations require different  need conditions. Then I can also say: I deliberately do without the ten percent. But at the moment, many  companies treat every type of innovation in the same way. And are surprised when little comes of it.