Rethinking Innovation:
IP, Policy, and the Path to Industry Revival
Reviving a Legacy: Can Germany's Automotive Industry Innovate Beyond Its Tradition?
Part III :
INTRODUCTION
In a recent interview with Dr. Thomas Leiber and Dr. Hans-Jörg Feigel, we discussed the topic "Rethinking Innovation: IP, Policy, and the Path to Industry Revival."
In the first part of their conversation, the two experts explored the critical role of innovation in helping established companies stay competitive and the lessons they can learn from startups . In the second part they discussed the challenges and opportunities companies face in fostering and protecting intellectual property (IP) in today’s globalized and rapidly evolving technological landscape.
In this third part of the conversation, they turn their focus to one of Germany's most iconic sectors - the automotive industry. With its long history of excellence, the German auto sector has long been a symbol of national pride. However, as the global automotive landscape evolves rapidly, some are questioning whether it is too late for Germany’s traditional auto giants to adapt. Can innovation provide a way forward, or is the industry at risk of being left behind?
Dr. Feigel, the former SVP of Continental and former President of Mando Europe, and Dr. Leiber, an innovator and entrepreneur in cutting-edge braking technologies with nearly 500 patents and a track record of founding multiple ventures, bring two unique and complementary perspectives to the issue, offering a holistic view of the challenges and opportunities ahead.
Dr. Feigel and Dr. Leiber highlight the urgent need for structural changes in the German automotive industry. Feigel believes the sector can still recover, but without reform, Germany risks losing its leadership. Leiber stresses the importance of leadership and innovation to stay competitive, noting that countries like China are advancing quickly, and a cultural shift is needed where leaders embrace change and empower teams rather than fear job loss or losing control. Leiber emphasizes that innovation hubs like India present significant opportunities, but these must be seized quickly, especially by smaller companies that can move faster in these dynamic markets.
SUMMARY
Both experts emphasize the need to support a startup ecosystem. Leiber calls for changes in taxation and investment policies to make Germany a hub for innovation, encouraging entrepreneurship both in large companies and startups and calling for collaboration between the two. Feigel agrees, noting that established companies often struggle with bureaucracy, which stifles innovation. He suggests creating autonomous units within companies to promote greater decision-making freedom and agility.
In conclusion, both agree that redefining internal structures within the automotive sector and implementing legal reforms across the country are crucial for fostering innovation. These changes are key to ensuring that Germany remains competitive on the global stage.
PART III
Reviving a Legacy: Can Germany's Automotive Industry Innovate Beyond Its Tradition?
INTERVIEW
Earlier, we've discussed how innovation and cross-border collaboration can drive economic success, but let's focus now on a key sector: the German automotive industry. With its deep-rooted history and reliance on traditional models, many are questioning if it’s too late for the industry to adapt. Do you believe innovation can provide a way forward, or is the German auto sector at risk of being left behind?
Feigel: This is a very topical question. Of course, my answer is subjective and solely based on my experience. Personally, I don’t think it’s too late for the automotive industry to get back on track, but structural changes are essential. Compared to other industries in Germany, automotive actually still stands strong. It’s the last industry in Germany, and I hope this acts as a wake-up call for the population. Otherwise, we may soon see ourselves as a potential emerging market rather than a global leader.
Leiber: From my perspective, Germans have often been more comfortable as followers than leaders. Historically, this approach has worked well and has been a key part of Germany's success story. However, the situation is changing. With China advancing so rapidly, it’s much harder to catch up now than in the past. Additionally, there seems to be a growing lack of decisiveness and leadership in corporate governance.
If we look at other global innovation hubs, we see massive opportunities, especially in places like India. But these opportunities need to be seized now, before others take the lead. As a smaller company, I can move quickly in these markets, but it’s much harder for larger companies based in Germany.
“A cultural shift is needed. In Germany, many people are afraid of losing their jobs or, more often, losing control. However, they need to change their mindset and realize that embracing rapid change and making bold decisions will ultimately help secure their jobs in the long term.”
– Thomas Leiber
Leadership plays a huge role in this shift. A true leader should strive to unlock the full potential of their team, nurturing individual skills that enhance the collective strength of the group. My business philosophy is based on resilience, collaboration and trust, and I see humility as one of the most important leadership traits. Humble leaders are better able to build strong, trusting relationships with their teams. On the other hand, those who fear losing control often become the biggest obstacles to progress in organizations. To stay competitive, especially in today’s fast-moving landscape, leaders must empower their teams and embrace change rather than cling to outdated ways of thinking.
Feigel: I agree with that. We also have to acknowledge that the automotive industry in Germany is part of the German identity and pride, similar to what Swissair was to the Swiss. The people care about it, and we have to realise that if it falters, it risks extinction. This awakening is necessary to drive the change required. There are location disadvantages and slow internal bureaucracy, and all of that needs to change. But I’m generally optimistic. Things are not as bleak as some may think, but it won’t happen without change.
“A cultural shift is needed.”
- Thomas Leiber
Leiber: It’s also about creating structures in terms of taxation and investments that foster innovation and support startups. We need to bring startups back, invest in them, and make Germany a hub for innovation. People need to feel encouraged to be entrepreneurial again, either through rewards in large companies or by investing in startups. In other countries, it is much easier for startups. Eventually, all the talent will go elsewhere.
Feigel: This isn’t something that happened overnight; it’s been a gradual process. Companies have expanded internationally and made significant investments. To bring those investments back, a shift in direction is needed.
I’ve also been reflecting on how the unique qualities of a startup can be preserved as a company grows. The size of a company plays a critical role in its capacity for innovation.
The larger the company, the more bureaucracy and hierarchy it tends to develop, which can stifle innovation. However, the closer management is to employees, the more likely it is to foster a culture of innovation.
Some large companies are responding to this by splitting into autonomous units with greater decision-making freedom, and this approach has proven successful in many cases. However, the challenge lies in the tension between empowering these autonomous units and maintaining overall responsibility within the organization. As a company grows, it’s necessary to have individuals overseeing the company as a whole, which can contradict the goal of creating fully independent units.
That said, I believe that a "company within a company" model has distinct advantages. It allows you to leverage the synergies and resources of the larger organization, while the holding company focuses on supporting and nurturing innovation, rather than controlling every aspect of it.
“In conclusion, complaining about the challenges won’t solve anything. What’s needed are new structures within established companies, along with changes to the legal and political frameworks that shape the business landscape.”
– Hans-Jörg Feigel
Conclusion
As the automotive industry shifts toward electric vehicles, autonomous driving, and smarter manufacturing processes, Germany's long-standing tradition of engineering excellence must evolve. Leaders will need to take bold decisions, foster collaboration, and create new structures to support innovation, if they hope to secure the industry’s future. Only by doing so will Germany remain a global leader in the automotive sector in the years to come.