ofthe profit margin of non-innovative firms. A reason might be the impact of cooperatives. Cooperatives have as goal to reach the best possible results for their members, i.e. a high price paid to farmers for their raw milk. An alternative explanation might be that in the highly competitive UK market the benefits of innovation are quickly transferred to retailers and consumers. This would mean that innovation is first of all a licence to supply the retail. Figure 5.5 Profit margin and number of innovations Profit margin (%) 80 60 40 20 0 0 2 4 6 8 10 12 14 16 18 -20 -40 -60 Number of innovations 5.10.3 Innovations and business performance: the German Case Germany is the largest raw milk producer in theEU. Table 5.13 shows that the share ofthe total number of large firms is 3%, with a share in turnover and employees iof over 60% in 2005. The German dairyindustry is not leading in innovation, considering the size of its dairyindustry: it ranks number 4 in list ofEU countries. Table 5.13 shows the key figures. The number of innovations is more or less in line with the turnover or number of employees: 65% ofthe turnover is realised by the large companies and they account for 68% ofthe innovations. The micro-firms have a relatively large share in the total innovations (5%) compared to the turnover (0.3%) but not compared to the share of employees (3%). 47
48 Table 5.13 Key figures ofthedairyindustry in Germany Microfirms Small and medium-sized firms Large firms All firms Firms Number 261 155 37 453 Share (%) 58 34 8 100 Turnover €m. 77 8,051 14,901 23,028 Share (%) 0.3 35 65 100 Employees Number 1,741 11,929 26,177 38,847 Share (%) 2 31 67 100 Innovations Number 1 6 15 22 Share (%) 5 27 68 100 Source: Eurostat SBS data 2005; Innovation: own database linked to Amadeus. In total we linked 14 innovative firms to economic performance data from Amadeus. This is about 8% ofthe selected 221 firms, almost on the same level as in the UK. The number of innovations is just a quarter ofthe level ofthe UK. The financial analysis gives a similar picture as in the UK. 5.10.4 Innovations and business performance: the French Case The French dairyindustry differs just slightly from the other cases. Despite a relatively low share of large firms 60% ofthe turnover is generated by these firms (table 5.14). Note that only large firms could be linked to the classified innovations. The pattern ofthe number of innovations and profit margin resembles the UK situation and the results will not be presented here.