A global qualitative study by Siemens Financial Services of precision and engineering companies found smart finance is becoming increasingly important to facilitate new-generation technology acquisition.

Access to the latest digitalized technology is critical for precision engineering and machining companies to improve global competitiveness. At the same time, they are coming under unprecedented financial pressure as globalization drives down prices and drives up demand for quality.

The research from the study shows that emerging global opportunities are being matched by globalized competition. A majority of respondents (61%) said the larger part of their competition now comes from foreign competitors, and that foreign-based competition is rising. At the same time, most (67%) said they expect their own export sales to increase over the next five years.

It is recognized that new-generation digitalized technology plays a critical role in responding to competitive threats. Digitalized technology offers precision engineering companies various competitive advantages including the ability to make more accurate products faster and at lower cost, and reducing set-up time and time to market. A majority of respondents (80%) say they are under pressure to adopt and implement the latest technology. Similarly, increasing automation and improving energy efficiency through the use of new technology were also highlighted as important for optimizing performance.

Companies are therefore looking to access a broader range of non-standard financing tools in order acquire competitively critical technology, with 60% of respondents stating that a broader range of financing techniques is ‘very important’ or ‘crucial’ in making their company more competitive and achieving growth in global markets. Asset finance was identified as a finance solution already being used with 63% of respondents saying they had funded technology acquisitions in this way.

“SME manufacturers face a watershed moment, following their larger counterparts on the digitalization journey,” said Gary Amos, Siemens Financial Services Commercial Finance North America CEO. “These companies understand the importance of consistently upgrading technology to maintain competitiveness, and it’s clear that demand for alternative financing techniques will continue to increase to help cope with that challenge.”