by Nada Welker | Feb 5, 2024 | Electrification, Future Trends, Market development & Trends, strategy in change, Technologies for new markets
The conference on “Energy transition in Viticulture – New Concepts for Sustainability” at the Weincampus Neustadt was a great success. The event took place on January 31, 2024, in the auditorium of the Service Center for Rural Areas (DLR) Rheinpfalz as an interactive format, attracting a diverse group of wine experts, vintners, and enthusiasts.
Participants were invited to delve into the challenges posed by the energy transition for the German wine industry. The focus was on the issues and opportunities for small and medium-sized wine businesses, particularly in terms of potential savings and the generation and storage of renewable energy. Commencing at 4:30 PM, the event provided an in-person experience at the DLR Rheinpfalz auditorium, with the option for virtual participation via the livestream at https://schlagabtausch.ef-sw.de/.
Energy transition in Viticulture – Panel Participants
The panel discussion brought together renowned experts from the wine industry to share their perspectives. Discussion participants included Dr. Michael Müller, Managing Partner of Magility GmbH from Wendlingen am Neckar, along with Jochen Schmitt from Weingut Egon Schmitt in Bad Dürkheim, Matthias Wolf, Managing Director of Weingut Schloss Ortenberg, Hans-Christoph Stolleis, Owner of Weingut Stolleis in Neustadt an der Weinstraße, Saskia Wörthwein, Managing Director of Weinmanufaktur in Untertürkheim, and Moritz Prinz zur Lippe, Apprentice at Weingut Ökonomierat Rebholz in Siebeldingen.
A Sign of Sustainability in Wine Production
The discussion focused on ways to make wine production more sustainable, shedding light on the role of renewable energy in viticulture. Participants learned how small and medium-sized wine businesses can achieve savings while contributing to the energy transition. The conference was free of charge, allowing for spontaneous participation, fostering a broad engagement and ensuring diverse perspectives were heard.
In conclusion, the event served as a successful forum for exchanging ideas and information about the energy transition in viticulture. Weincampus Neustadt thereby set an important example for more sustainability in wine production and promoted dialogue between industry experts and practitioners.
The Multidimensionality of Viticulture: A Look at the Levels of Success
Viticulture, a complex and multifaceted industry, is influenced by various levels ranging from global trends to specific growing conditions. Dr. Michael Müller provided a closer look at these levels in his presentation, vividly summarizing them for the participants.
Level 1: The World – Global Trends and Politics
At the highest level, global trends and political decisions on a global scale come into play. Climate change and globalization are examples of factors that can influence viticulture worldwide, requiring continuous adaptation by the industry.
Level 2: Region – Climatic Conditions and Legislation
The second level is the region, where climatic conditions play a crucial role. In Germany, wine regions like Pfalz, Mosel, Rheingau, and Baden are of great importance. Here, laws, regulations, infrastructure, and cultural factors influence viticulture. The German Wine Law is an example of a norm with significant influence on the regions.
Level 3: Soil, Terroir, Topography – Influence on Taste
On the third level, soil, terroir, and topography come into play. These complex factors mutually influence each other and significantly shape the taste of the wine. Each wine-growing region has its own peculiarities that manifest on this level.
Level 4: Vine, Vineyard – Grape Variety, Cultivation Method, Care
The fourth level encompasses the vine and the vineyard. Here, the choice of grape variety, cultivation method, and care are crucial. Different grape varieties are suitable for various cultivation methods, resulting in a diverse wine landscape.
Level 5: Harvest, Vinification – Technique and Vinification
The fifth level includes the harvest and vinification. The choice of harvest technique, vinification, and aging significantly influence the quality of the wine.
Level 6: Brand, Marketing, and Sales – Identity and Distribution
On the sixth level, brand, marketing, and sales take center stage. Here, brand identity, marketing strategy, distribution channels, and sales play a decisive role in market success.
Overall, this hierarchical approach illustrates that viticulture is a multidimensional industry, requiring careful considerations and adjustments at each level to ensure quality and competitiveness. A profound understanding of each level enables vintners to operate successfully in this challenging environment.
Energy transition in Viticulture – Summary of Participant Voices
- Need for Savings: There was unanimous agreement among participants that measures to save resources and energy in viticulture are inevitable.
- Reflection and Implementation Speed: It was emphasized that while much thought is given, faster implementation and more speed in deploying solutions are necessary.
- Future Investment: Participants saw adapting to sustainable practices as an investment in the future.
- Start-ups’ Need: There was a desire for more support from start-ups that can develop innovative solutions for winemakers.
- Focus on Wine Production: Participants stressed the importance of focusing on wine production and leaving technological solutions to others.
- Knowledge Source: The question of acquiring know-how was raised, emphasizing the need for more best-practice exchange and forums.
- Experimentation and Trying Out: The necessity to experiment with new approaches and technologies was underscored.
- Government Assistance: Politics were urged to assist in challenges such as slow approval processes, for example, for cables in the ground.
- Grid Adjustments: Criticism was voiced about mismatched grid structures, with a demand for improvements.
- Priority for PV Rooftops: Prioritizing photovoltaic rooftops was suggested.
- Profit Assurance for Winemakers: It was emphasized that sustainability measures should also serve to secure profit for winemakers, enabling the implementation of new concepts.
- Action over Words: There were multiple appeals not only to talk but to actively take measures. Exchange and collaboration were highlighted as key factors.
In conclusion, gratitude was expressed for insights from a different perspective that enriched the discussion.
Energy transition in Viticulture – Magility Summary
The digitalization and electrification in viticulture shape a sustainable future. From harvest to marketing, innovative technologies enable efficiency gains, quality improvements, and active support for the energy transition. Winemaking enterprises pursuing intelligent solutions are not only embracing eco-friendly practices but positioning themselves as pioneers in sustainable viticulture. A holistic examination across all levels – from harvest to marketing – creates a path to a future-oriented and environmentally conscious wine cultivation. In the coming days, our blog will delve into the different levels of action in viticulture. Look
by Nada Welker | Dec 6, 2021 | Covid
The Corona pandemic hit the global economy hard and led to a slump in international trade. Global industrial production reached its low point in April and was around 15% lower than in December of the previous year. International trade was 16% lower in April and 17% lower in May than in December, which can be seen in the following graph:
Developments in the global economy are also having an impact on German SMEs. As part of global value chains, it can hardly escape declines in demand and interruptions in production abroad. And is therefore not only affected by the measures to contain the virus at home.
Foreign share of value added in German exports
According to a study by the Cologne-based Institut der deutschen Wirtschaft (IW), the USA is the most important supplier of imported value added, followed by China. China’s share of value added in German exports is 1.6 percent. This means that 7.8 percent of the imported products that flow into German exports come from China. Half of the value added imported for export comes from EU member states. France is the most important supplier here, with the Italian economy in second place as an input supplier for German exports.
It is true that the dependence of the German economy on individual countries appears to be rather low. Overall, however, more than one-fifth of the services for domestic consumers, companies, the public sector and the export economy come from abroad. Moreover, dependence on foreign value added is likely to be highly sector-dependent.
Of the total global services offered by the German economy, 76.6 percent come from domestic value added. By contrast, 23.4 percent comes from abroad. Of this, in turn, less than half (around 10 percent) comes from other EU countries. The USA accounts for 2.3 percent, China for 1.9 percent and the United Kingdom for 1.4 percent of the services provided, taking into account domestic value added:
As expected, dependence on foreign suppliers is particularly pronounced in mining, at 84.6 percent. Agriculture and forestry, including fishing, also obtain almost half of their value added from abroad, at 45.2 percent. In construction and services, dependence on foreign suppliers is below average at 16.8 and 15.7 percent, respectively, but still not negligible. If the domestic orientation of construction services is taken into account, the data show that a construction project worth 100 million euros purchases services worth around 1.6 million euros each from the USA and China.
Germany particularly integrated into global supply chains
Due to the current Corona crisis, domino effects with dramatic consequences for German prosperity are now expected. The reason for this are trade barriers, which have been erected above all for supplies and medical goods.
The extent to which the German economy is interwoven with global trade is made clear in a study by the Institute of the German Economy (IW). Among the major industrialized nations, Germany is more intensively integrated into international supply chains than any other country: If the openness of an economy is measured by the ratio of trade volume to gross domestic product (GDP), the Federal Republic of Germany’s degree of economic integration is 88 percent. One of the highest values in the world.
What we can learn from the crisis
The Corona crisis has had a massive impact on us. It also has significant consequences for corporations, their value chains and also on transfer pricing, which in some cases has to change very significantly in order to remain competitive.
Accordingly, in general, affected companies should consider the possible impact of adjustments in their value chains and take early action to minimize tax and compliance risks in order to best manage the crisis.
In general, one can only speculate at present about the extent and duration of the economic impact of this pandemic. German companies fear not only the loss of exports to China, but also a disruption of their own value chains: Because employees can no longer perform their work – due to illness, limited mobility or even fear. The lack of inputs from China or other countries is also an obstacle to production. The coronavirus is a demand and supply shock.
The internationalization of production and the accompanying division of labor have led to significant efficiency gains in the economies involved. Advance inputs in international value chains, the mutual transfer of technology or the exchange of knowledge via employees in multinational companies have also increased production possibilities and prosperity in Germany.
If, on the other hand, pandemics were to occur more frequently, this would sooner or later lead to permanent production shocks in the case of pronounced dependencies. Relocations back to domestic or other foreign locations would be the consequence. The partial renunciation of the advantages of the international division of labor would be justified by the associated minimization of risks from production dependencies. However, efficient internationalization leads to a diversification of risks – including the reduction of national dependencies. In this respect, international value chains should be examined primarily in terms of their sustainability and not per se.
Sustainable effects on the global economy are conceivable if economic crises of manageable duration are used as a pretext for a politically motivated dissolution of international cooperation. The argument of a restructuring of international production potentials as a result of epidemics or pandemics must also be placed in the current political framework. This is often characterized by protectionist and autarkic thinking. In many cases, the maxim of political action is not the interdependence of countries and the resulting benefits in terms of prosperity and cooperation, but the decoupling of national economies and the pursuit of economic and political independence. There is therefore a risk that COVID-19 will become another knock-out for globalization in the long run.
Supply chains need diversification – state intervention should remain limited
Structural change in value chains depends heavily on companies. One measure, for example, could be to diversify supply chains to increase resilience to production failures in upstream products.
According to Galina Kolev, an economist at IW and an expert on world trade, government intervention in market activity should only be considered in areas that are of great importance for the basic supply of the population with, for example, basic foodstuffs or medical products. National compartmentalization is not a way out, he said.
We at magility will continue to monitor the impact of the Corona crisis on value chains and the economy in general. We will be happy to keep you up to date on this.
Do you have any questions? Then feel free to contact us at any time. You are also welcome to follow us on LinkedIn to make sure you don’t miss any news.
by Nada Welker | Nov 29, 2021 | Market development & Trends
Streaming videos, shopping online or sending funny videos to friends – digital platforms are a natural part of our everyday lives. But there is much more behind these platforms: They embody the marketplaces of today and offer space for a variety of different business models. Digital platforms form the basis for social media providers, search engines, comparison and rating portals, and even online gaming. All these platforms pursue the same goal: they bring together providers and interested parties, or potential customers, in the digital marketplace and promote innovation and exchange. In short, supply and demand effectively meet. Digital platforms create new connections of customer groups, attractive markets, competitive advantages through better market development, and new sources of revenue. The platform economy creates added value and is an important building block for the convergence of industries.
Potential lies in growing market power
Digital platforms are often associated exclusively with social networks, including YouTube, Facebook or Instagram. However, the potential applications of digital platforms go much further. Consumer groups, companies and even government institutions are united there. Consequently, different platform segments established themselves. From business-to-business (B2B) to business-to-customer (B2C) to business-to-government (B2G) platforms, everything can be found on the World-Wide-Web today. Due to the increasingly steep growth figures, a wide variety of manufacturers and retailers are jumping on the platform economy bandwagon – and with good cause: Internet-based platforms take over important functions in business life and everyday life and offer enormous growth opportunities as a digital business model. The potential of digital platforms can be exploited either by setting up one’s own online platform or by simply using an already existing platform, e.g., as a sales channel. In 2020, 6 out of 10 companies in Germany were already using digital platforms or had already set one up by themselves.
Perceived risks of digital platforms
Despite the manifold advantages and opportunities, the platform economy also entails risks. A study on the importance of digital platforms for companies in Germany in 2020 found that some companies are still very reluctant to use digital platforms due to data protection and IT security requirements and a lack of qualified personnel.
There is also a perceived risk of excessive competition among platform users and operators as well as non-users. Due to the ease of market entry, competition among digital platform providers is increasing. Another risk factor is increased price pressure: In order to stand out from the competition, it is essential to offer attractive prices that are as favorable as possible compared with the competition.
The displayed statistics clearly show that it is predominantly non-users who still perceive many risks and disadvantages in the area of digital platforms.
“The winner takes it all”: One winner – many losers?
As already mentioned, the intensity of competition between digital platforms is enormous. Thus, it is not uncommon that in certain markets there can be a strong market concentration up to a monopoly position. This is also referred to as “the winner takes it all” markets. If one platform alone dominates a market, there is no longer any fair competition. Basically, 3 factors are responsible for the centralization of platform markets:
- The network effects characteristic of platforms: Platforms that already have many customers attract more and more new users due to their broad customer base. The value and also the attractiveness of a product or service therefore depends on how many other users also perceive the offer. Consequently, this platform dominates the market and can, for example, increase prices or turn previously free functions into paid ones.
- The scale effect: It describes the reduction in production costs due to a company’s economy of scale, which is reflected in falling unit costs of products or services. In terms of digital platforms, it is about collecting and analyzing data. Basically, providers who have a lot of data at their disposal have a decisive competitive advantage.
- Is the effort of a platform change worth it? – The lock-in effect: The time or financial effort required to switch from one platform to another is often perceived as an obstacle. For this reason, many users avoid switching.
These effects have an impact on the centralization of the market and have a negative impact on the intensity of competition. For small and medium-sized enterprises (SMEs), this makes it increasingly difficult to assert themselves in the market.
The basic rule in the world of platforms is: Grow so fast and strong that no one can compete against you, because size is the most important competitive advantage there.
Data collection and analysis is an essential part of the value chain of platforms. In the process, an almost unlimited amount of data is collected and further processed and made available with the help of algorithms. The more information that emerges from data analysis, the easier it is to determine the interests of the target group and thus develop a suitable advertising strategy. Accordingly, the extensive use of data enables continuous optimization and increased efficiency in product design, manufacturing, sales, marketing and other important areas of the value chain. Data – if it can be stored and meaningfully processed – therefore has an economic value. While individual data records do not yet represent a usable value, large data volumes, so-called Big Data, are becoming a resource. The need to provide usable data has not been a secret for a long time. For this reason, some service offerings are seemingly offered free of charge. In return, the user provides free access to his data. Accordingly, the competition of digital platforms in the product space is becoming less and less important and is increasingly focused on the data space. Consequently, the architecture of platforms is evolving into a data economy infrastructure.
[infobox headline=”Key points in a nutshell”]
- Digital platforms embody the marketplaces of today and provide a basis for the development of a wide variety of business models.
- Digital platforms pursue the goal of bringing providers and potential customers together in the digital marketplace.
- Internet-based platforms perform important functions in business and everyday life and offer enormous growth opportunities for digital business models.
- There are 3 factors responsible for the centralization of platform markets: Network effects, economies of scale and lock-in effects.
- The extensive use of data enables continuous optimization and increased efficiency in product design, manufacturing, sales, marketing and other key areas of the value chain.
[/infobox]
A look into the future of the platform economy
Currently, one can speak of an evolution of the platform economy: Existing platforms continue to develop and attract more and more users, others are being pushed out of the market, and new platforms are being established. Looking to the future, it is still possible and advisable for a company to enter the platform economy. However, it is important to always keep an eye on technological developments, as change is the only constant in the digital world market. Furthermore, 53% of the companies in the aforementioned study state that there should be uniform rules for digital platforms throughout Europe in order to promote their use. In addition, half of the companies would like to see increased legal certainty. Likewise, public funding and support for cooperations with other companies to build digital platforms are perceived as important.
In 2030, it will hardly be possible to do without digital platforms. These will be indispensable mainly in the business sector. However, companies should also act with an eye to the future – if they have not already done so – and jump on the platform economy bandwagon.
We at magility always keep an eye on the latest developments in the platform economy and keep you up to date. If you have any questions, feel free to contact us!
To make sure you don’t miss any news, be sure to follow us on LinkedIn.
by Nada Welker | Nov 22, 2021 | Hydrogen
Hydrogen as a driver of innovation in the Stuttgart Metropolitan Region
At our 5th network meeting “Future Business Digital Networks”, which we at magility organised together with VP Bank and oeconos, entrepreneurs from all over Baden- Württemberg came together again this year to discuss the megatrend of neo-ecology and in particular the currently very hyped topic of “hydrogen”.
The speakers
Dr. Thomas Gitzel, Chief Economist of the VP Bank Group, gave an insight into the current economic situation and, using the example of pipelines from Russia, underlined the importance of global dependencies and their challenges among others, for Germany in the area of gas.
Dr. René Schellenberger introduced the world of neo-ecology with his keynote speech. He showed how ecological values are creating a new global identity and made it clear how the relationship between humans, nature and technology will change in the future and how completely new relationships will result from this.
Jan Dietz, CEO of oeconos GmbH, then moved on to the kind of change that this will bring for innovations in small and medium-sized enterprises and pragmatically showed what neo-ecology means for companies and how it will affect products, processes and business models. The return to old values, especially in production processes, will play a major role.
Prof. Dr. Gerhard Reiff, Chairman of the Board of KST Motorenversuch GmbH & Co. KG, made it clear that hydrogen will be an important building block for achieving the climate targets, but that sufficient availability, especially of green hydrogen, will still be a challenge for many years to come.
The panel discussion
Dr. Michael Müller, CEO of Magility GmbH, and Jürgen Schenk, Senior Executive Advisor of Magility GmbH, also expressed this point of view and elaborated on it in the subsequent panel discussion. In order for hydrogen to establish itself as a sustainable and easily accessible energy carrier, it is necessary to consider various fields: Production, logistics and distribution through to applications. The two magility experts discussed with the audience and the speakers which H2 applications will sustainably establish themselves on the market.
Cornelia Frey, moderator of the Stuttgart Stock Exchange, skilfully led the interactive panel discussion. She contributed important suggestions and encouraged interactive discussion with the audience. One main point was the potential that hydrogen can bring for new business models in the coming years.
Hydrogen as a driver of innovation?
Jules Verne wrote in the book “The Mysterious Island” already in 1874:
“Water is the coal of the future. The energy of tomorrow is water that has been decomposed by electric current. The elements of water thus decomposed, hydrogen and oxygen, will secure the earth’s energy supply for the unforeseeable future.”
H2 is one of the options for phasing out fossil fuels quickly and sustainably. H2, especially in its green variant, offers considerable potential for achieving climate protection goals. The modification of conventional to climate-neutral business models requires a high degree of competence and experience. The biggest challenge for companies is to find the optimal mix between climate neutrality and business success. Only when the strength of hydrogen is considered in a cross-sectoral manner for transport, power generation, heat and industry green hydrogen is able to unfold its full potential in a sustainable energy system and a viable concept can emerge.
Magility GmbH and hydrogen – position paper
We at magility see ourselves as a system integrator for hydrogen projects, especially in the fields of industry, real estate, individual mobility, transport and energy supply for the German market. We model the individual environment of our customers and can calculate individual optimisations from the available energy balances and applications. From this, we create suitable and scalable solutions that can also be expanded and adapted over time. In our new position paper “Hydrogen – just one part of the big picture Energy transition, companies and “Climate Action Failure”, we at magility take a position on the trend topic of hydrogen and show in which fields of application we see the greatest potential.
Effects of the Neoecology Megatrend
Sustainable structures are becoming the new defining economic factor of our time. The megatrend neoecology will shape the future and have a particular impact on the way companies think and act. The economic system and the market will change permanently. As a result, companies are not only faced with the challenge of orienting themselves towards the future through the digital transformation and the associated innovations and new business areas, but the 2020s will also be decisively shaped by sustainability issues that concern every entrepreneur.
Interview with Dr. Michael Müller
For further information, please read the interview with our CEO Dr. Michael Müller published by the Stuttgarter Börse.
Please feel free to contact us.
by Nada Welker | Oct 22, 2020 | Future Trends
An optimistic interpretation of terms such as opportunity, economic upturn and security is something that probably only few people associate with Covid19. And yet, according to the Zukunftsinstitut, exciting and promising scenarios – so-called mega-trends – can be developed for the post-Corona period in particular.
Security Through Uncertainty
The most astonishing thing up front: the more turbulent and uncertain the events of an era are, the greater the chance of achieving personal security. Because security “as the absence of an existential danger” is based, especially in Western countries, on a feeling that can be created by people themselves. Thus, security changes from a passive state to an active process. And this new perspective is important, because globalization and digitalization are breaking up old familiar patterns that previously provided an apparent sense of security. Whereas in the past, people used to have a job that they filled until retirement age and which allowed them to firmly establish themselves in a community with their home and family, many people are now confronted with changing employers and the home office more quickly than most forecasts predicted. The topic of fake news also makes people deeply insecure and requires a greater intellectual effort to filter out halfway objective information from as many trustworthy sources as possible and to put together their personal world view from this information. From a neutral point of view, change is more constant than stagnation and leads to further development and progress. Re-orientation is the order of the day and setting up in a world whose individual reality can be created anew by each individual on a daily basis.
Trendsetter Ü50 – Pioneers of Individual Self-Realisation
One of the greatest opportunities for progress and economic and monetary potential lies with the “old”, of all people, who are no longer old in the traditional sense. Many members of the so-called Silver Society, who used to move from the working world to retirement at the age of around 65, no longer even think about retirement. On the contrary: Due to the increasing age expectation with good physical condition, they are faced with the question: Where to go with all that energy? They answer this question in advance, for example, with professional reorientation, the leap into self-employment or further training and hobbies still at over 100.
Economic Growth Through Digital Natives and Creative Economy?
The pioneers are followed by a generation that already includes the first digital natives, people of the generation that grew up in the “digital world”. They will benefit from the fact that many companies have been forced to digitalize or expand their business due to the Covid19 virus. According to the Zukunftsinstitut, increasing digitalization and automation is accompanied by “an epochal upheaval” in the world of work. The ever more frequently asked question about the meaning of gainful employment is therefore leading to a departure from a purely rational economy of performance towards the development of the individual’s potential. And nowhere is this better expressed than in the so-called creative economy. It is made up of people who are also artistically creative in the broadest sense, such as authors, architects, designers, musicians or even developers of computer games, and since the end of the 1980s has been developing into one of the most dynamic branches of the global economy. According to the German Federal Ministry of Economics and Energy (BMWI), creative artists made a larger contribution to the overall economic performance in Germany in 2018 (100.5 billion euros) than the chemical industry, energy suppliers or financial service providers. This promising sector of the economy is mainly made up of freelancers and small and micro-entrepreneurs.
Hygge as a building block for perceived safety
During the lockdown, most people were banished to their own homes for longer than many of them would like. Suddenly, furniture, furnishings and quality of living became the focus of attention. For many people, the question of their own identity is linked to the personal interior. At a time when millions of people are traveling around the globe in search of security, freedom and quality of life, leaving their homes behind, a home takes on a whole new quality and meaning. For many people it is becoming increasingly important whether they spend their free time in an environment that is individually perceived as aesthetic, the furnishings of which also fulfill the aspect of sustainability as far as possible and thus help to preserve natural resources.
It is not only at home that the demand for a pleasant and sustainable environment is increasing; expectations of the working environment are also rising. Trends such as New Work are being further accelerated by Covid19 and the effects of related measures. This is because the abolition of the strict separation between workplace and private sphere through the relaxation of home office regulations and the increased use of digital technologies, which enable communication in a team and with customers from any location, is further increasing the needs of employees for the working environment. Not only employers, but also urban planners and the entire construction industry will have to respond to these trends, which have been rapidly accelerated by Covid19, now. New business models are emerging and developments that were at a snail’s pace in Germany before Covid19 are now gaining momentum.
Corona as an Accelerator of Mega-Trends
Covid19, apart from all the negative sides, also has a promising flip side and will become an accelerator of the mega-trends of the future. We at magility will be happy to support you in the development of new business models and we evaluate these mega-trends and innovative technologies for you, which can become an accelerator of your economic power.
