A scientific study recently carried out by the Institute for Entrepreneurship has examined the “entrepreneurial conduct” of small and medium-sized enterprises (SMEs) in the Rhine Valley, and has revealed country-specific differences in relation to their success.
A scientific study recently carried out by the Institute for Entrepreneurship has examined the “entrepreneurial conduct” of small and medium-sized enterprises (SMEs) in the Rhine Valley, and has revealed country-specific differences in relation to their success.
For the study, three employees from the Institute for Entrepreneurship interviewed a total of 304 regional companies during the past year: 71 companies from Liechtenstein, as well as SMEs from the two neighbouring regions Austria (117 companies) and Switzerland (116 companies).
Successful SMEs in the Rhine Valley – innovative and prepared to take risks
Professor Sascha Kraus and the two academic researchers Matthias Filser and Désirée von Süsskind-Schwendi found that the readiness to take risks and a clear innovation-oriented approach have a noticeable positive influence on the overall performance of companies – even when they are faced with a difficult business environment. What became evident was that this trend differs in the three countries: Liechtenstein companies prove to be more successful the more risks they take, while companies in the St. Gallen Rhine Valley are especially successful if they aspire to design innovations which they then also implement. Both dimensions influence the companies’ success, even if one is less pronounced than the other – with the exception of the companies in the Vorarlberg region, where a positive connection was only observed between their readiness to take risks and their level of success.
Proactive approach does not influence a company’s success
Proactivity is the third potential success factor that was derived from entrepreneurial research and is supposed to influence entrepreneurially oriented SMEs; however, it was not observed to have a positive effect on success in any of the three countries. A proactive approach is defined by active research, a future-oriented tendency and the recognition of chances related to promising and long-term business opportunities. It is an essential part of a strategy that aims to “create” its own markets – similar to Apple with its launch of the iPhone in 2007. Companies from the Rhine Valley instead tend to focus on innovation and the readiness to take risks, an approach that improves existing products and services instead of focusing on new ideas. Thus, existing customer requirements are met, and innovations are created within the development process – sometimes by including the customers themselves. Pursuing completely new strategies that “invent” products to meet additional customer requirements seems to be a less frequently favoured approach.
Results are true for all industries and company sizes
The results from the study, which was supported by the Liechtenstein research promotion fund (Liechtensteinischer Forschungsförderungsfonds – FFF), hold true regardless of a company’s size or the industry in which it is active. The results clearly demonstrate that companies overcome difficult economic times through innovations and a readiness to take risks, which can then increase their success. Nevertheless, “entrepreneurial conduct” often depends on personal affinity and the management’s awareness of the effects that innovations, a readiness to take risks, and proactivity may have on the company. Therefore, it can be concluded that companies in the Rhine Valley should be made aware of the fact that the ability to produce innovations and the readiness to take risks can increase their success. Generally speaking, these two dimensions seem to be the key to the success of SMEs in the Rhine Valley.
In their scientific study, Professor Sascha Kraus, associate professor at the Institute for Entrepreneurship, and his team were able to define country-specific success factors for SMEs in the Rhine Valley.