Red Tape Risks: What Does the Loss of Competitiveness Cost?

𝗥𝗲𝗱 𝗧𝗮𝗽𝗲 𝗥𝗶𝘀𝗸𝘀: 𝗪𝗵𝗮𝘁 𝗗𝗼𝗲𝘀 𝘁𝗵𝗲 𝗟𝗼𝘀𝘀 𝗼𝗳 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗖𝗼𝘀𝘁? A little bit safer, more climate-friendly, fairer. Precisely regulated, documented, and audited. Red tape is consistently driven by good intentions. Yet it costs money to understand, implement, document, and submit for review the constantly evolving rules, and to wait for approvals. But what does the loss of competitiveness from this slowdown in work actually cost? Is that the elephant in the room? 𝗜𝗻 𝗮 𝗠𝗼𝗻𝘁𝗲 𝗖𝗮𝗿𝗹𝗼 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁, 𝘄𝗲 𝘀𝗶𝗺𝘂𝗹𝗮𝘁𝗲𝗱 𝗳𝗶𝘃𝗲 𝗶𝗱𝗲𝗻𝘁𝗶𝗰𝗮𝗹 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 that develop a product, test it, apply for approval, and after clearance from the authorities bring it into production and market it. Each of these steps has a random duration. The market is competitive, and there is a 𝗳𝗶𝗿𝘀𝘁-𝗺𝗼𝘃𝗲𝗿 𝗮𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲: whoever reaches the market first with a working, approved product sells the largest volumes at the best price and grows the fastest. The later you enter the market, the smaller the market share and revenue you can capture. High-tech markets fit this pattern, for medicines, vaccines, AI engines, chemical plants, energy technology, payment systems, and much more. One of these companies is now held back by red tape. Processing the approval of the new technology takes 20% longer on average. Only this one process step out of several is affected. Does this small disadvantage already have a noticeable impact on competitiveness? 𝗧𝗵𝗲 𝗿𝗲𝘀𝘂𝗹𝘁: this disadvantage alone already costs the company a third of its expected profit relative to its competitors. The probability of being the last to reach the market rises by 50%, even though the companies themselves were completely identical. 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗶𝘀 𝗼𝗳𝘁𝗲𝗻 𝗶𝗻𝘃𝗶𝘀𝗶𝗯𝗹𝗲. 𝗢𝗻𝗹𝘆 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗮 𝗿𝗶𝘀𝗸 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀 𝗱𝗼𝗲𝘀 𝘁𝗵𝗲 𝗯𝘂𝗿𝗱𝗲𝗻 𝗼𝗳 𝗿𝗲𝗱 𝘁𝗮𝗽𝗲 𝗯𝗲𝗰𝗼𝗺𝗲 𝘃𝗶𝘀𝗶𝗯𝗹𝗲. You will receive the full model with 𝗥𝗶𝘀𝗸 𝗞𝗶𝘁 𝟴 this summer. Feel free to contact us for a live demo. https://lnkd.in/e7RTdghN

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