Enterprises leave it late to cooperate - report
Enterprises are unlikely to look for regional cooperation agreements when they are doing well and often only resort to this once they are 'up to their neck in water', according to a recent report issued by the Fraunhofer institute for systems and innovation research in Karlsruhe, Germany. The study, which took in information from 1400 German firms in the investment goods sector, found that levels of profit acted as a good guide in determining whether a firm would look for regional cooperation. Generally, firms with a pre-tax profit-turnover ratio of two per cent or less would be the most likely to seek regional cooperation (with 38 per cent in this category opting for this). Companies with a ratio of between two and six per cent would be slightly less inclined (with about 33 per cent opting for it) while companies with a ratio of more than six per cent saw the lowest rate (just 28 per cent). The four types of regional cooperation analysed in the report, production, selling, procurement and service also show wide variations. The most likely type of cooperation for most firms was production cooperation, with over 20 per cent of the companies interviewed involved with a firm, generally not more than 50 kilometres away. This figure falls to 13 per cent for regional selling cooperation and for procurement and service cooperation agreements, the figure falls to eight per cent. The information on the effect of cooperation indicates that the companies that do so are generally better placed to succeed. For example, firms that engage in selling cooperations with partners from their region reach the highest annual turnover growth, with an average of 35 per cent. Procurement cooperation agreements reduce overheads, and although these require long delivery times to the company, there is no evidence that this affects the firm's ability to meet deadlines. Service cooperation agreements tend to increase service's share of total turnover. Firms without them see a percentage of around seven per cent, while firms with them see the figure rise to around ten per cent.
Countries
Germany