Entrepreneurship, Cluster Building and the Role of the Public Policy

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1 technische universität dortmund Entrepreneurship, Cluster Building and the Role of the Public Policy Dr. Norbert Jesse Department of Computer Science TU Dortmund University Germany

2 Content 1. Preliminary Note 2. Entrepreneurship 3. Cluster Policy 4. Role of Policy Intervention 5. Summary

3 Bottrop 1976

4 Economic Background Development of Employment in Traditional Industries In Thousand Coal Steel Beer 4

5 Creating jobs in growth branches Software & IT MEMS e-logistics & established branches Secondary effects Job potential * given in 1000

6 RuhrCity Transformation Coal Steel Transport Structural Change through innovative Rearrangement Energy Basic Material Logistics

7 Content 1. Preliminary Note 2. Entrepreneurship 3. Cluster Policy 4. Role of Policy Intervention 5. Summary

8 No. of Enterprises and Average Firm Size European SMEs under Pressure. Annual Report on EU Small and Medium-Sized Enterprises 2009, EC, Mai 2010

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10 Size range of companies in Germany

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12 Spirit of the Entrepreneurial: 5 Characteristics Passion: Richard Branson Business are like busses. There s always another one coming. Positivity: Jeff Bezos and Amazon Adaptability: Sergey Brin/Larry Page and Google Leadership: Mary Kay Ash and Mary Kay Cosmetics Ambition: Debbi Fields and Mrs. Field s store

13 Entrepreneurial Spirit However, don t forget that you are the CEO of your life: Your everyday choices will decide how you accumulate either assets or liabilities. Taking the plunge (committing yourself to a new startup, N. J.) is very hard. If you want to be an entrepreneur, you have to learn to take that plunge and be fully prepared to accept the consequences. it is a very lonely feeling. It is true that the world is unfair. Don t get trapped into thinking that you need to pick something where you can be successful and happily live ever after. You have to constantly reinvent yourself Therefore accept the process of renewing yourself as a life-long exercise until your last breath. Dr. Deshpande, chairman & co-founder of Sycamore Networks, USA, founder of numerous further companies, Aug. 28, addressing graduands at Amrita Vihwa Vidyapeetham University, India

14 Surprising Fact From 400,000 newly founded start-ups in 2008 only? 15,300 = 3,8 % with participation of someone with university degree Spiegel Online: Bitte inkubieren Sie,

15 Delivering a Modernization Agenda for Universities: Bridge the Gap Granting sufficient autonomy to develop own strategies Structured and strategic partnerships between universities and business By exchange of staff, teaching and encouragement of entrepreneurship in universities Establishment of science parks around universities With adequate finance available to support research spinoffs Putting knowledge into practice: A broad-based innovation strategy for the EU EC, Sept. 2006

16 SMALL BUSINESS ACT: Think small first 10 principles to guide the conception and implementation of policies both at EU and Member State level: I. Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded II. Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance III.Design rules according to the Think Small First principle IV. Make public administrations responsive to SME s needs V. Adapt public policy tools to SME needs: facilitate SME s participation in public procurement and better use State Aid possibilities for SMEs Brussels,

17 Think small first VI. Facilitate SME s access to finance and develop a legal and business environment supportive to timely payments in commercial transactions VII. Help SMEs to benefit more from the opportunities offered by the Single Market VIII.Promote the upgrading of skills in SMEs and all forms of innovation IX. Enable SMEs to turn environmental challenges into opportunities X. Encourage and support SMEs to benefit from the growth of markets 17

18 Think small first Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded Translate into practice Commission Enterprise education/entrepreneurial culture European SME Week Erasmus for Young Entrepreneurs initiative Network of female entrepreneur ambassadors/mentoring schemes Member states invited to entrepreneurship as key competence in school curricula correctly reflected in teacher training taxation does not unduly hamper the transfer of businesses provide mentoring & support (business transfer/women/immigrants) 18

19 Think Small First Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance Translate into practice Commission second chance policy by facilitating exchange of best practice between Member States Member states invited to positive attitude through information campaigns complete all legal procedures within a year 19

20 Content 1. Preliminary Note 2. Entrepreneurship 3. Cluster Policy 4. Role of Policy Intervention 5. Summary

21 Cluster policy in Germany

22 Key factors for success Strong cooperation Research commercialisation Critical human capital mass Skill enhancement Strong commitment of the public sector Strong partnerships and leadership High quality of life Social capital

23 Barriers hindering cluster development Weak entrepreneurial cultures and incentives in research Weak involvement of small firms in cluster projects Lack of seed capital Shortages of qualified labour Problems of congestion and social divisions Poor co-ordination of policies

24 What-Questions Nature of the cluster and how has it evolved? Key drivers of competitiveness / factors behind success? Impact of cluster on entrepreneurship? Obstacles for further development? Role of public police on all levels? Future policy challenges? Lessons of the experiences elsewhere?

25 Policy recommendations Encouraging entrepreneurship Supporting spin-outs and small firm collaborations Leading a transition to the entrepreneurial university Supporting the launch and growth of start-ups Stimulating innovation and collaboration Fostering industry research collaboration Encouraging enterprise networks Stimulation spin-offs Better marketing of products

26 Coordination public policies and local initiatives Strengthening public-public and public-private partnership Encouraging evolution in cluster activities Ensuring quality human capital Updating education and training to meet the requirements of the cluster Ensuring availability of talent locally Ensuring the appeal of the area and a good quality of life

27 Facilitating access to financing Encouraging private investments Facilitating access to public funding Creating forums to seek financing Reducing congestion and social devision Tackling congestions and social inequalities resulting from the emergence of the cluster Creating mechanisms to inform about the activities of the cluster

28 Content 1. Preliminary Note 2. Entrepreneurship 3. Cluster Policy 4. Role of Policy Intervention 5. Summary

29 TechnologyCenter & Parc

30 TechnologyCenter: Basic tasks Promoting the establishment of businesses Providing infrastructures Co-operating between science and economy Trapping regional developement potential Promoting regional economic development Imparting and qualifying information Initiating promotional projects and co-operation Installing technical early warning systems Developing business concepts Improving the innovative climate

31 McKinsey I: Goals Setting up new leading industries: information technology, Microsystems technology and e-commerce / e-logistics Strengthening resident companies Expanding training, qualification, science and research opportunities Developing Dortmund into a modern business metropolis offering a high quality of life and leisure time One-stop-shop for those starting up a new business or settling in Dortmund A considerable increase in the level of employment

32 McKinsey II: Requirements Visible leadership and leading persons with clear commitment Transparent vision and clearly defined processes and projects Quantitative goals with metric and success evaluation Focus on growth aiming to become the best Support of the innovative fundament and city attractiveness Igniting self-enhancing effects (cluster building) Invest instead of subsidize Early wins and stamina Public-Private-Partnership Regional coordination activities

33 McKinsey III: Make it Work Top-class steering committee Vision and clear priorities Objective: > 70 Tsd. Jobs and GDP/Inhibit + 50 % E-Commerce, MST, Logistics Foster network btw universities/holistic concept Support of networks/new dimensions of projects & activities Business Plans Prioritised projects Cooperation btw TK, city, media, universities

34 Dortmund Provides Room to Boom

35 Dortmund Project New industries start2grow (formation and growth) Locate IT (establishment) MST.factory (microsystem and nanotechnology) e-port-dortmund (logistics) TZDO und ECC (information technology and communication) People and competences Dortmund as location for universities/ colleges IT-Center JOY IT training campaign Education network microsystem technologies Agency for personnel services Locations Phoenix Harbour Technology park Stadtkrone Ost Westfalenhütte Old airport Dortmund- Brackel City

36 Start2grow competitions Formation competitions Growth initiatives IT Microsystem technologies all branches IT all branches Initial event May Initial event June Initial event November Initial event May Initial event November Final event September Final event November Final event April Final event Oktober Final event April

37 start2grow-competitions: Network for Founders Experts Logistics Business consultancy 240 Tax consultants Accountants 113 Experts organization/ staff 211 Experts marketing/ sales Product design Founders Research and development Lawyer 83 Procurement system Start-up advice Experts finances VC/ Banks 45

38

39 SWOT-Analysis

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41 4. Summary 41

42 10 Recommendations Consensus Universities and research institutes are at the centre Fair analyse facts and figures - no wishful thinking Identify competences that offer prospects of growth and competitiveness Encourage entrepreneurship Cluster initiatives on a federal and state level complement local activities Financial partners Improve the quality of life Invest in infrastructure (atmosphere of dynamic) KM and change management is a process (evolutionary perspective)

43 Thank You for Listening!

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