Entrepreneurship Promotion in Germany

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Patience Willis
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1 Entrepreneurship Promotion in Germany Dr. Utz Dornberger small enterprise promotion & training Leipzig, Januar

2 Agenda 1. Entrepreneurship-Management in Germany 2. Entrepreneurship Support Network 3. Comparison of Regions: Leipzig & München 2

3 Germany & GEM Results of the Global Entrepreneurship-Monitors (GEM): Entrepreneurial activity in Germany: 7 % (lower than in USA: 11 %) more opportunity-based entrepreneurship than necessitybased entrepreneurship realtively comprehensive and effective network of supprt agencies for start-ups but low market transparency more financing available for start-up companies, but difficulties for smaller business to get loans no coherent approach to support entrepreneurship 3

necessitybased entrepreneurship realtively comprehensive and effective network of supprt agencies for start-ups but low

4 Target groups unemployed people students, Graduates scientists and other staff from research institutions high-skilled people with capability to create Hightech enterprises women general support programmes 4

institutions high-skilled people with capability to

5 Support Institutions Federal Government ministries (BMWI, BMBF) parastatal banks (KfW, DtA) Arbeitsamt Regional Government parastatal regional banks municipalities business incubators private sector lokal banks (Sparkasse) large companies (Coporate Venture Incubators) 5

parastatal regional banks municipalities business incubators

6 Parastatal banks cheap loans for equipment investments Example: DtA supported entrepreneur only in 1997 with 9 billion DM support for Hightech start-ups direct subsidies (FUTOUR programme) parastatal Venture Capital funds cheap loans for private Venture Capital funds 6

000 entrepreneur only in 1997 with 9 billion DM support for Hightech

7 VC support programmes Comparison USA Germany private /VC investments (in billion US$) 89,57 Germany USA 59,53 17,41 21,69 11,18 3,26 2,43 5,06 4,91 5,25 5,46 0,52 0,56 0,57 0,56 0,58 0,59 0,67 1,32 1,85 3,06 4,

21,69 11,18 3,26 2,43 5,06 4,91 5,25 5,46 0,52 0,56 0,57 0,56

8 Public Venture Capital At the beginning of the 90s the Ferderal Government concluded that the key to revitalizing commercializable hightech products would be to nurture small startups. Objectives: support of private investment in seed and start-up fases of hightech enterprises development of a VC market in Germany which in long terms not depends of the public sector Instruments parastatal banks invest up to 50 % in a hightech company in the case that a private lead investor provides the other 50 % public garanties for private investors refinancing of private VC funds 8

Objectives: support of private investment in seed and start-up fases of hightech enterprises development of a VC market in Germany which in

9 Example tbg Tbg Technologiebeteiligungsgesellschaft of DtA Investment volume since US$ Mio

DtA Investment volume since 1993 600 US$

10 Example tbg Error Rate Enviromental Technology Multimedia Comunication Average Software Electronics Medical Technology Biotechnology 0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 10

11 Results I Long term development of VC investments Seed Start-up Expansion Replacement Turnaround Bridge MBO/MBI LBO ohne Angaben invesment for seed and start-up fases increased strongly 11

12 Results II Investments in Germany for 2000 MBO/MBI Bridge 8% 9% LBO 9% Otros 3% Expansión 35% Seed 9% Start-up 27% 36 % of invesment for seed and start-up fases 12

13 Results III Growth of biotech firms UK Germany France Sweden 538 biotech firms more than jobs turnover: 1,5 billion US$ (without pharma industry) 13

14 Entrepreneurship promotion at universities EXIST Initiative of BMBF, awareness programmes business plan competitions incubators at universities 14

15 Incubator network services Business Incubators high tech firms existing industries public institutions research & education 15

16 Incubator network in Germany Business Incubators Business and Innovation Centers there are more than 200 Incubators in Germany approximately 4000 start-up companies with more than employees resided in incubators In East Germany more than 60 incubators were constructed after

17 Objectives of incubators Promotion of hightech start-ups via supply of infrastructure and business services Creation of regional networks between research institutions and enterprises Creation of new jobs in hightech areas to prevent the brain drain facilitation the creation of spin-offs from universities Problem: Most incubators only provide good infrastructure. Networking and consulting capacities are relatively low. Enterprises look for specialized services. 17

the brain drain facilitation the creation of spin-offs from universities Problem: Most incubators only provide good

18 Example: Leipzig Business and Innovation Centers en Leipzig Services: Unternehmergründerbüro post service business angels Infrastructure: founded in m2 conference halls reception desk connection to Internet (2 Mbit/s) 18

business angels Infrastructure: founded in 1998 5.

19 Coporate Venture Incubators Incubator of Bertelsmann Group Multi Media founded in 1999, Investement 7 start-ups (9 Mio. US$) Incubators pays salaries for entrepreneurs up to 9 months 19

20 Example: München potential Entrepreneurs: 4,9 % entrepreneurs: 14,4 % (young entrepreneurs: 4,3 %) Strengths high entrepreneurial activities, self-confidence high number of research institutions and universities good infrastructure for technology transfer very good infrastructure in financing start-ups (VC, business angles) Weakness: low number of comercial buildings limited housing space 20

and universities good infrastructure for technology transfer very good infrastructure in financing

21 Example: Leipzig potential Entrepreneurs: 2,8 % entrepreneurs: 8,8 % (young entrepreneurs: 2,8 %) Strengths high support from the local government Very active support institutions (ugb) good infrastructure in comercial buildings high level of qualified employees Weakness: low enpreneurial activities low availability of external capital low number of technical-oriented reserach institutions 21

THE ITALIAN STARTUP AGENDA

THE ITALIAN STARTUP AGENDA POLICIES AND STRATEGIES FOR STARTUPS STEFANO FIRPO ITALIAN MINISTRY OF ECONOMIC DEVELOPMENT, HEAD OF THE MINISTER S TECHNICAL SECRETARIAT LAST UPDATE: 10 FEBRUARY 2015 #RESTARTITALIA