Description
Entrepreneurship Promotion In Germany
Leipzig , Januar 2003 1
Entrepreneurship Promotion
in Germany
Dr. Utz Dornberger
Leipzig, Januar 2003
small enterprise promotion & training
Leipzig , Januar 2003 2
Agenda
2. Entrepreneurship Support Network
1. Entrepreneurship-Management in Germany
3. Comparison of Regions: Leipzig & München
Leipzig , Januar 2003 3
Germany & GEM
Results of the Global Entrepreneurship-Monitors (GEM):
www.gemconsortium.org
Entrepreneurial activity in Germany: 7 % (lower than in
USA: 11 %)
more opportunity-based entrepreneurship than necessity-
based 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
Leipzig , Januar 2003 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
Leipzig , Januar 2003 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)
Leipzig , Januar 2003 6
Parastatal banks
„cheap“ loans for equipment investments
Example:
DtA supported 45.000 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
Leipzig , Januar 2003 7
VC support programmes
0,56 0,57 0,56 0,58 0,59
0,67 1,32
1,85
3,06
4,83
5,06
4,91
5,25 5,46
11,18
17,41
21,69
0,52
59,53
89,57
3,26
2,43
1990 91 92 93 94 95 96 97 98 99 00
Germany USA
Comparison USA – Germany
private /VC investments (in billion US$)
Leipzig , Januar 2003 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
Leipzig , Januar 2003 9
0
100
200
300
400
500
600
1993 1994 1995 1996 1997 1998 1999 2000
U
S
$
M
i
o
.
Example tbg
Tbg – Technologiebeteiligungsgesellschaft of DtA
Investment volume since 1993
Leipzig , Januar 2003 10
Example tbg
0,00% 5,00% 10,00% 15,00% 20,00% 25,00%
Biotechnology
Medical Technology
Electronics
Software
Average
Comunication
Multimedia
Enviromental Technology
Error Rate
Leipzig , Januar 2003 11
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Seed
Start-up
Expansion
Replacement
Turnaround
Bridge
MBO/MBI
LBO
ohne Angaben
Results I
Long term development of VC investments
invesment for seed and start-up fases increased strongly
Leipzig , Januar 2003 12
Results II
Expansión
35%
Start-up
27%
Seed
9%
LBO
9%
Bridge
9%
MBO/MBI
8%
Otros
3%
Investments in Germany for 2000
36 % of invesment for seed and start-up fases
Leipzig , Januar 2003 13
Results III
Growth of
biotech firms
UK
Germany
France
Sweden
538 biotech firms
more than 16.500
jobs
turnover: 1,5 billion
US$ (without pharma
industry)
Leipzig , Januar 2003 14
Entrepreneurship promotion at universities
EXIST Initiative of BMBF, www.exist.de
awareness programmes
business plan competitions
incubators at universities
Leipzig , Januar 2003 15
Incubator network
services
research &
education
public
institutions
high tech firms
existing industries
Business
Incubators
Leipzig , Januar 2003 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
30.000 employees resided in incubators
• In East Germany more than 60 incubators were constructed
after 1990
Leipzig , Januar 2003 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 fromuniversities
Problem:
Most incubators only provide good infrastructure. Networking
and consulting capacities are relatively low. Enterprises look
for specialized services.
Leipzig , Januar 2003 18
Business and I nnovation Centers en Leipzig
Infrastructure:
founded in 1998
5.500 m2
conference halls
reception desk
connection to Internet (2 Mbit/s)
Services:
Unternehmergründerbüro
post service
business angels
Example: Leipzig
Leipzig , Januar 2003 19
www.bertelsmannvalley.de
Incubator of Bertelsmann Group – Multi Media
Coporate Venture Incubators
founded in 1999, Investement 7 start-ups (9 Mio. US$)
Incubators pays salaries for entrepreneurs up to 9 months
Leipzig , Januar 2003 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
Leipzig , Januar 2003 21
Example: Leipzig
potential Entrepreneurs: 2,8 %
entrepreneurs: 8,8 % (young entrepreneurs: 2,8 %)
Strengths
high support fromthe 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
doc_187057222.pdf
Entrepreneurship Promotion In Germany
Leipzig , Januar 2003 1
Entrepreneurship Promotion
in Germany
Dr. Utz Dornberger
Leipzig, Januar 2003
small enterprise promotion & training
Leipzig , Januar 2003 2
Agenda
2. Entrepreneurship Support Network
1. Entrepreneurship-Management in Germany
3. Comparison of Regions: Leipzig & München
Leipzig , Januar 2003 3
Germany & GEM
Results of the Global Entrepreneurship-Monitors (GEM):
www.gemconsortium.org
Entrepreneurial activity in Germany: 7 % (lower than in
USA: 11 %)
more opportunity-based entrepreneurship than necessity-
based 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
Leipzig , Januar 2003 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
Leipzig , Januar 2003 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)
Leipzig , Januar 2003 6
Parastatal banks
„cheap“ loans for equipment investments
Example:
DtA supported 45.000 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
Leipzig , Januar 2003 7
VC support programmes
0,56 0,57 0,56 0,58 0,59
0,67 1,32
1,85
3,06
4,83
5,06
4,91
5,25 5,46
11,18
17,41
21,69
0,52
59,53
89,57
3,26
2,43
1990 91 92 93 94 95 96 97 98 99 00
Germany USA
Comparison USA – Germany
private /VC investments (in billion US$)
Leipzig , Januar 2003 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
Leipzig , Januar 2003 9
0
100
200
300
400
500
600
1993 1994 1995 1996 1997 1998 1999 2000
U
S
$
M
i
o
.
Example tbg
Tbg – Technologiebeteiligungsgesellschaft of DtA
Investment volume since 1993
Leipzig , Januar 2003 10
Example tbg
0,00% 5,00% 10,00% 15,00% 20,00% 25,00%
Biotechnology
Medical Technology
Electronics
Software
Average
Comunication
Multimedia
Enviromental Technology
Error Rate
Leipzig , Januar 2003 11
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Seed
Start-up
Expansion
Replacement
Turnaround
Bridge
MBO/MBI
LBO
ohne Angaben
Results I
Long term development of VC investments
invesment for seed and start-up fases increased strongly
Leipzig , Januar 2003 12
Results II
Expansión
35%
Start-up
27%
Seed
9%
LBO
9%
Bridge
9%
MBO/MBI
8%
Otros
3%
Investments in Germany for 2000
36 % of invesment for seed and start-up fases
Leipzig , Januar 2003 13
Results III
Growth of
biotech firms
UK
Germany
France
Sweden
538 biotech firms
more than 16.500
jobs
turnover: 1,5 billion
US$ (without pharma
industry)
Leipzig , Januar 2003 14
Entrepreneurship promotion at universities
EXIST Initiative of BMBF, www.exist.de
awareness programmes
business plan competitions
incubators at universities
Leipzig , Januar 2003 15
Incubator network
services
research &
education
public
institutions
high tech firms
existing industries
Business
Incubators
Leipzig , Januar 2003 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
30.000 employees resided in incubators
• In East Germany more than 60 incubators were constructed
after 1990
Leipzig , Januar 2003 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 fromuniversities
Problem:
Most incubators only provide good infrastructure. Networking
and consulting capacities are relatively low. Enterprises look
for specialized services.
Leipzig , Januar 2003 18
Business and I nnovation Centers en Leipzig
Infrastructure:
founded in 1998
5.500 m2
conference halls
reception desk
connection to Internet (2 Mbit/s)
Services:
Unternehmergründerbüro
post service
business angels
Example: Leipzig
Leipzig , Januar 2003 19
www.bertelsmannvalley.de
Incubator of Bertelsmann Group – Multi Media
Coporate Venture Incubators
founded in 1999, Investement 7 start-ups (9 Mio. US$)
Incubators pays salaries for entrepreneurs up to 9 months
Leipzig , Januar 2003 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
Leipzig , Januar 2003 21
Example: Leipzig
potential Entrepreneurs: 2,8 %
entrepreneurs: 8,8 % (young entrepreneurs: 2,8 %)
Strengths
high support fromthe 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
doc_187057222.pdf