Brandenburg Growing the European Way

Brandenburg Growing the European Way State Government Report on the Implementation of the Strategy to Boost Innovation and Creativity in Small and Medium-Sized Enterprises (EER Strategy) - Page 1/32 -

1. Context, Background and Structure of the Report On 11 February 2010, the State of Brandenburg received the 2011 European Entrepreneurial Region award (EER award) along with the Spanish region of Murcia and Irish county of Kerry. Against this backdrop, the Brandenburg parliament issued a resolution on 25 February 2010 (Brandenburg: Europäische Unternehmerregion 2011 Innovation und Kreativität im Mittelstand nachhaltig unterstützen!, print edition 5/510 B) that calls for the award to be used to promote SMEs more purposefully and make the public more aware of their importance for the development of the region. The state government was asked to develop a strategy focusing on the following goals: - prioritising support for SMEs; - securing the availability of a skilled workforce; - start-up promotion; - internationalisation of SMEs; - support for innovations and ecological modernisation. Accordingly, the Strategy to Boost Innovation and Creativity in SMEs (print edition 5/2618) was presented to the regional parliament and discussed at its session on 19 January 2011. The Minister of Economy and European Affairs who penned the EER Strategy promised the regional parliament a fresh report. Whereas the first report made by the ministry was merely a record of sorts, the present implementation report is an interim appraisal made after December 2011, i.e. the end of the actual award period. Another report is scheduled as part of the state government s report on SMEs due in 2013. To ensure that the implementation report is comprehensible in itself, its content structure was closely modelled on that of the first report. As the EER award is valid for two years, there will be even more activities bearing this label in 2012. Brandenburg s SME policy is to continue in accordance with the EER Strategy until the end of the current legislative period. As it is necessary to consolidate the Brandenburg budget, the state government shall set priorities and determine which SME support measures could have the biggest impact in the medium to long term. In this respect, the budget proviso applies for the corresponding statements in this report. 2. 2011/2012 EER Award Brandenburg Growing the European Way The Brandenburg government has always understood the 2011 EER award as both an acknowledgement of its SME policy and a stimulus for the further development of this policy within the European framework. The EER award was an opportunity to streamline all the SME support measures implemented by the state government. More than one and a half years later, the news is good: in 2011 Brandenburg grew the European way, both through the further development of strategic elements and the more intensive collaboration with other European regions. Brandenburg has become more conspicuous and tangible in the European Union and vice versa. At the same time, an overview of all the support measures taken by the state government underscores the importance of two EU structural funds (European Regional Development Fund, ERDF; European Social Fund, ESF) and the European Agricultural Fund for Rural Development (EAFRD) for Brandenburg s SMEs 1. The use of ERDF, ESF and EAFRD funding played a key role in the region s European growth during the reporting period. 1 Information on the contribution from these funds is available in the corresponding chapter or the appendix. - Page 2/32 -

The state government s economic and labour policy integrated new or updated strategic elements aimed at supporting SMEs during the reporting period. Particularly worth a mention are: - the new GRW-G directives; - the Brandenburg Microcredit; - the Innovation Vouchers; - the expansion of the ProVIEL innovation programme; - the innobb cross-industry strategy; - the ProIndustrie action plan. Moreover, the Brandenburg Economic Development Board introduced a coordinator for SMEs in the cultural and creative industries (see Chapters 2.1 and 2.2), while established support measures and programmes, such as for the internalisation or promotion of start-ups, were also continued. The labour policy within the EER Strategy focuses on start-up support and business promotion and includes the following programmes and projects: - Gründung Innovativ (see Chapter 2.2); - Innovations Needs Courage; - Directive to Promote Qualification and Coaching Measures (played a key role in the decision of the EU commission to select the Ministry of Labour, Welfare, Women and Family MASF among the finalists of the 2012 RegioStars Award, see Chapters 2.5 and 2.6); - Development of a Skilled Workforce (see Chapter 2.7); - Promotion of Qualified Training in a Combined System (launched in 2011); - Entry-level Time. The state government also implemented the EER Strategy in its infrastructure, environment, education, science and research policies with a double goal: securing the availability of a skilled workforce, the innovative ability of companies and the knowledge transfer between science and industry on the one hand, while improving the region s transport infrastructure and the development of rural areas on the other. The second major thread of the EER Strategy, the collaboration with the other 2011/2012 EER awardwinners and with several other European regions, was fostered intensively during the reporting period. In doing so, Brandenburg has learnt from Europe, but also brought its own ideas and initiatives to the discussion table. The Ministry of Economy and European Affairs (MWE) communicated the award by organising regional conferences and a series of school events entitled School and Entrepreneurial Spirit (see Chapter 3). The EER Strategy should remain valid after 2012: further support for the region s SMEs should ensure that Brandenburg reaches an outstanding European level (see Chapter 4). 2.1 Priority for SMEs Funding, Investment Incentives, Second Chance for Insolvent Companies, Integration in Industry-related Concepts In order to facilitate the access of SMEs to the public and private capital market, the state of Brandenburg supports companies using various tools: - loans at reduced interest rates; - guarantees and investments in new companies; - expansion and acquisition of businesses; - necessary structural adjustments; - overcoming liquidity bottlenecks; - strengthening the equity base. - Page 3/32 -

Moreover, the support for SMEs now includes revolving financial tools: the funds awarded can be reused for support purposes once they have been repaid, thus preserving the companies capital. Brandenburg-Kredit Mezzanine Established SMEs from all industries (including freelancers) can apply for subordinated loans within this programme. The ILB bank provides loans of up to EUR two million per business for investments and operating supplies. The fund volume amounts to EUR twenty million. The rate of interest varies according to the money and capital market developments. Early-stage Fund This fund aims to boost the equity capital base of young, innovative SMEs in the early stages through subordinated loans in conjunction with open investments. The fund volume amounts to EUR twenty million. Joint-stock companies based in or with branches on Brandenburg are eligible to receive up to EUR one million of funding each. Unsecured subordinate loans are available in conjunction with the GRW grant to fund planned investments. The loans run over eight to ten years, do not have to be amortised in the first three years and are interest-free. In 2011, two grant/loan combinations were issued. With investments to the tune of EUR 40.9 million kick-started, grants of around EUR five million and loans of around EUR 14.3 million were approved. Microcredits 2 are especially important for Brandenburg-based micro-enterprises, for which the conventional credit market is often hard to access. Among the microcredits provided by the EU and the federal government are: - the European Progress Microfinance Facility (EPMF, aimed at supporting the unemployed, those not in gainful employment and micro-enterprises, especially in the social economy); - the Mikrokreditfonds Deutschland (the largest microcredit project in Germany, launched by the Federal Ministry of Labour and Welfare); - the ERP Gründerkredit Startgeld credit (formerly KfW-Startgeld ), which is provided by the KfW bank and tailored to the needs of the self-employed, freelancers and SMEs who have just started their activity or existed for one to three years. The Brandenburg Microcredit programme was launched in August 2011 as a complement to the ERP Gründerkredit Startgeld credit. Under this programme, the ILB bank (in conjunction with the Brandenburg Chambers of Commerce and Industry/Chambers of Trade) supersedes the SME s house bank if it rejects an application for funding via the ERP Gründerkredit Startgeld credit. This programme aims to improve the availability of loans for start-ups and is particularly interesting for businesses of the creative industry. The GRW-G directive is Brandenburg s most important promotion tool for industrial businesses. Together with the ERDF, it supports investments aimed at improving the income and employment situation in the region. In 2012 this funding was reorganised and split into two directives: - Under the GRW-G Growth Programme for Small Businesses, companies with less than fifty employees and an investment volume of up to EUR 1.5 million can receive the 2 In the EU, loans under EUR 25,000 are defined as microcredits. - Page 4/32 -

maximum funding regardless of their industry or cluster classification. This guarantees that even SMEs can benefit from the SME support policy. - The Large Company Directive applies exclusively to investments above EUR 1.5 million and companies within the five Berlin-Brandenburg clusters and the four Brandenburgspecific clusters (see Chapter 2.2). Moreover, the directive abolishes basic funding: the grant amount depends solely on achieving structural effects (plus potential SME bonuses). This means that the funding depends more on the expect impact on jobs, wages, innovative potential and energy efficiency than in the past, the aim being to focus on high-quality investments. The state government developed a special tool in order to give honest companies a second chance: The Monitoring Group comprises representatives from the MWE, the Brandenburg Economic Development Board and two banks (ILB and Bürgschaftsbank Brandenburg) and helps companies that have been forced to file for insolvency but have good prospects for continuing operations. It advises the businesses on possible restructuring and stabilisation measures (in particular using state funding tools like credit programmes), the aim being to preserve jobs and prevent plant closures. Other support programmes focus on urban/rural development and the promotion of new business activities for SMEs in connection with the demographic changes: Sustainable Urban Development This programme run by the EDRF and the Ministry of Infrastructure and Agriculture (MIL) aims to stabilise the economic and commercial infrastructures in specific areas of fifteen Brandenburg cities. The programme contributes on one hand towards securing and expanding businesses that already exist in urban areas, and on the other hand attracting new businesses. Directive to Support Investments in Agricultural Businesses This directive was issued by MIL and is financed by the EAFRD and the joint programme Improvement of agricultural structure and coastal protection GAK. It aims to modernise agricultural businesses, improve their competitiveness and develop non-agricultural activities, the overall goal being to secure and create jobs in rural areas. Interreg IV C project DART (Declining, Ageing and Regional Transformation) This project that runs until December 2012 in collaboration with thirteen other European regions identifies new fields of activity for SMEs in the healthcare industry and the silver economy. It also takes into account sound solutions for various issues of demographic change developed in other EU member states to streamline Brandenburg s strategies. The updating of the public procurement legislation and the establishment of a single point of contact for all Brandenburg authorities are two examples of SME support measures outside funding programmes : The legislation sets value thresholds for limited tendering procedures and direct contracts signed by local authorities. In order to accelerate and simplify tendering procedures for construction services and deliveries to such authorities, the legislation valid until 31 December 2010 was amended on 28 July 2010. This is primarily to benefit SMEs. Single Point of Contact for all Authorities of the Federal State of Brandenburg (EAPBbg) This website established by the MWE under the EU services directive simplifies administrative procedures and reduces the obstacles in cross-border trade. It offers comprehensive - Page 5/32 -

information to those who intend to found service companies and helps to handle all the necessary administrative procedures. Prospective entrepreneurs can even carry out the procedures online, which considerably reduces the amount of time invested. After two years in operation, it is telling that primarily SMEs have utilised the EAPBbg website. The ProIndustrie action plan developed by the state government focuses on maintaining Brandenburg s SME-dominated corporate structure, boosting industrial companies and developing new economic sectors and sunrise industries: This action plan aims to improve the framework conditions for industrial production, boost the qualitative and quantitative development of the region s industrial base, increase the proportion of industrial jobs and broaden the industrial value-added chain. Overall, the ProIndustrie action plan aims to establish Brandenburg as a modern, green and internationally competitive industrial hub by the year 2020. Programmes and projects that are already underway (EER Strategy, innobb strategy, cluster policy, RGA process, energy strategy) have been incorporated into the ProIndustrie action plan, which thus became a major tool of Brandenburg s industrial policy. With regard to SMEs, the action plan focuses on the following programmes and projects: - Framework Conditions Infrastructure improvement based on the following measures: - priority projects of the RGA process; - updating of the atlas of the region s commercial and industrial areas; - development of a presentation tool; - securing of the energy supply at stable prices; - development of an innovation chain for renewable energies and raw materials (Clean Tech Initiative). - Network, Cluster and Innovation - Cluster development; - Promotion of cross-industry topics - Innovation management and consulting; - Further development of technology transfer and innovation-oriented projects. - Internationalisation and Product-related Services - Establishing contacts for industrial businesses abroad; - Promoting cooperation among SMEs; - Providing internationalisation coaching services; - Handling complex funding issues and service orientation. - Development of a Skilled Workforce - Improving the qualification of the existing workforce; - Securing the availability of a skilled workforce; - Encouraging the current and future skilled workers to stay in Brandenburg. - Location Communication - Improving the image of Brandenburg s industrial locations through cluster conferences and discussions; - Developing an image campaign within the ProIndustrie action plan; - Organising an industrial summit conceived as a discussion forum. - Page 6/32 -

The ProIndustrie action plan s opening event is due to take place in mid-2012. The Brandenburg government intends to make the German Capital Region a leading media hub in the medium term and Germany s most innovative location for information and communication technology in the long run. Therefore, Brandenburg s numerous SMEs in the creative and cultural industries stand to benefit from governmental support. In November 2011, on behalf of the MWE, the Brandenburg Economic Development Board established a creative coordinator who shall facilitate contacts between the various creative industries, support their contacts with other industries and thus reinforce the entire value-added chain. The creative coordinator s tasks include: - identifying potentials on the submarkets; - recommending suitable support measures; - delivering consulting and supervision services, especially as regards marketing and funding applications; - supporting existing networks and developing new ones with the participation of all the actors. 2.2 Innovation Joint Innovation Strategy Berlin-Brandenburg (innobb), Companyspecific Measures, Interconnection between Science and Industry Innovation is crucial to businesses competitiveness. Consequently, innovation policy is a key element for economic development. The innobb strategy developed jointly by the federal states of Berlin and Brandenburg broadens the structural and institutional framework of the region s innovation policy. Brandenburg has developed a comprehensive programme of company-specific measures that support businesses throughout the lifecycle of innovative products and services and promote the interconnection between science and industry. With the Joint Innovation Strategy Berlin-Brandenburg (innobb) agreed upon by both federal states in June 2011, the German Capital Region is facing up to the rapidly changing conditions in the global competition among industrial locations. The innobb strategy determines a new framework for profiling Berlin and Brandenburg as a competitive, innovative industrial location. To this aim and in accordance with a smart specialisation strategy concept, it focuses on the expansion of the clusters with high development potential set up in 2010 and 2011. The Berlin-Brandenburg clusters relate to the following fields of business activity: healthcare industry, energy technology, transport, mobility and logistics, ICT, media, optics and creative industries. The thematic orientation of the individual clusters goes beyond the purely technological aspects in research and application. The international competitiveness of the German Capital Region feeds on the following principles: - larger cooperative environment for the cluster companies; - closed value-added chains; - greater value-added depth; - improved knowledge transfer; - joint strategic R&D projects. - Page 7/32 -

The clusters are particularly aimed at helping SMEs with limited R&D resources to improve their potential, expertise and competitiveness thanks to networking, thus contributing more intensively to the creation of value added in the region. The innobb strategy anchors the clusters in a broader economic environment via so-called cross-industry topics with growth potential (primarily Materials, Production and Automation Technology, Clean Technologies and Security Industry, but also Bioeconomics ). The following measures are to contribute to the clusters further development: - promotion of knowledge and technology transfer (in particular through innovative startups and securing the availability of a skilled workforce); - international networking; - funding for R&D activities and management structures; - cluster and location marketing as a central element in raising the region s profile. The following innovation policy tools are used to support individual companies: Brandenburg Innovation Vouchers This low-threshold tool developed by the MWE enables SMEs from the manufacturing industry and skilled trades to finance knowledge and technology transfer, acquire specific scientific services and thus satisfy their needs for innovative solutions. The vouchers help SMEs to overcome their inhibitions in collaborating with R&D institutes. The maximum grant was doubled in November 2011 and now amounts to EUR 3,000 for the small vouchers and EUR 15,000 for the large ones. The programme has proved popular among SMEs, who apply for the vouchers at the Brandenburg Economic Development Board or the technology transfer offices run by the Brandenburg universities. ProVIEL (Brandenburg Innovation Programme to Promote the Implementation of New Solutions for More Growth and Employment) This programme aims to develop new business fields and models using innovative technologies. It promotes novel value-added chains, supplier networks, innovative services and process optimisation. It is tailored to the needs of SMEs from the service sector, the skilled trades and the manufacturing industry. The round of tenders was as follows: - 2010: security and geoservices industries; - 2011: innovative services in the material and energy efficiency industries; - 2012: health services that implement standardised state-of-the-art technology and intermediate service-providers that contribute towards improving life and work in rural areas. In the future, the employment of innovation assistants will be supported by grants from the MASF and the ESF in accordance with the Guideline for Support to Brandenburg-based SMEs. The goal is to support the creation of jobs for highly skilled junior employees in small and medium-sized enterprises in order to boost the companies growth and innovation expertise. Directive for R&D Activities in SMEs/Main R&D Directive The MWE supports the innovative skills of SMEs, large companies and research institutes by funding R&D projects aimed at improving the businesses competitiveness. Such projects may focus on: - industrial research; - experimental development of products, procedures and technologies; - process and operative innovations in services. - Page 8/32 -

Moreover, the Brainshell patent office run by the Brandenburg Economic Development Board markets inventions from Brandenburg s universities, while the ProTraC project supports crossindustry transfer and the implementation of R&D projects eligible for EU funding. The following measures improve the interconnection between science and industry: Directive to Promote Economic Technology Transfer This directive issued by the MWE complements the activity of the transfer offices at the Brandenburg universities as it also boosts the interconnection between science and industry. The start-up advisers at the universities provide initial information for prospective entrepreneurs and then refer to the appropriate consultants (e.g. start-up service, Chamber of Commerce, Brandenburg Economic Development Board) to determine a tailored strategy (see Chapter 2.5). Furthermore, the cluster management of the five Berlin-Brandenburg clusters and the four Brandenburg-specific clusters coordinates the technology transfer within the industries of the German Capital Region. EEN BB (Enterprise Europe Network Berlin-Brandenburg) This network helps SMEs to find their way through the wealth of information from Brussels as regards innovation-relevant EU initiatives and programmes. The network also helps companies in search of business and technology partners and organises regular events, such as information days on EU calls for tender, cooperation exchanges and discussion forums. In 2011, for instance, the EEN BB network co-organised a trip to Great Britain for entrepreneurs in the photovoltaics industry to establish contacts with businesses on the British solar market. And in 2012, the network organised the Photonics in Europe cooperation exchange within the framework of the Laser Optics Berlin trade fair that focused on optic and microsystem technologies. Research and Innovation Funding to Boost the Innovative Strength at Brandenburg Universities In 2010 and 2011, as many as 36 thirty-six R&D projects involving Brandenburg universities and businesses (including thirty two-year projects) benefited from funds amounting to EUR 3.4 million granted by the MWFK. Knowledge and Technology Transfer for Innovations Using ERDF funds, the MWFK finances the further expansion of application-oriented research structures. The programme entitled Knowledge and Technology Transfer for Innovations funds R&D projects that boost Brandenburg s research potential and technology. Sustainable R&D structures should contribute towards developing the region s economy, especially in clusters and future-oriented fields. In 2010 and 2011 as many as sixty-one university projects were funded with EUR 6.3 million. In a nation-wide comparison, Brandenburg s universities of applied sciences perform an aboveaverage number of R&D activities, which is evident in the amount of external funding they attract. Through their application-oriented research programmes, the region s universities of applied sciences decisively contribute towards increasing both innovations in industry and the SMEs competitiveness. In order to improve cooperation and knowledge transfer between industry and science, Brandenburg was the first state in Germany to introduce research professorships at universities of applied sciences, a model that has since been mimicked in other states. - Page 9/32 -

Research Platform on Climate Change The MWFK founded this association to promote the interdisciplinary collaboration between research institutes, universities and industry and to establish Brandenburg-Berlin as a model region for understanding climate change scientifically and dealing with its consequences. In July 2012, the association had already twenty-six members. The MWFK s target agreements with the universities are aimed, among other things, at promoting knowledge and technology transfer in order to support existing companies and startups. Directive to Promote Collaboration on Developing New Products, Procedures and Technologies With this directive funded by the EAFRD that is tailored to the needs of businesses in agriculture, forestry and the food industry, the MIL supports businesses that operate in rural areas in the long term. The funding is aimed at a more effective use of market opportunities by propagating innovative methods and concepts for the development of new products, procedures and technologies. Gründung Innovativ Programme This programme funded by the ERDF aims to support innovative start-ups that have trouble obtaining bank loans due to a lack of securities and equity capital. The programme entered into its second phase in July 2011, which will last until December 2013. The introduction of the second phase was an occasion to modify the programme slightly: from now on, only those who found their first business and entrepreneurs who have founded a start-up in the last two years (previously five years) are eligible to apply. The programme alteration also made the incentive dependent on a minimum hourly wage of EUR 7.50. The programme only applies to businesses in Northeast Brandenburg. Between 2009 and May 2012, twenty-five start-ups who created as many as 115 new jobs benefited from incentives amounting to EUR 2.1 million. 2.3 Ecological Modernisation and Sustainable Production Energy Efficiency, Clean Technologies, Environmental Partner Brandenburg Ecological modernisation involves improvements in the energy efficiency of buildings, production plants and goods transportation, while modern energy technology offers great potential for businesses to tap into new markets with innovative products for environmental protection or energy and resource efficiency. These aspects are extremely relevant for both the Brandenburg SMEs and the further development of the Brandenburg economy as a whole. Moreover, ecological modernisation is a fundamental component of the state government s sustainability strategy: sustainable development requires the simultaneous and equitable implementation of environmental, economic and social measures. The state government supports the ecological modernisation of SMEs through a set of measures for information and consulting, as well as through promotion investments aimed at improving energy efficiency: The RENplus programme supports projects aimed at increasing energy efficiency, the use of renewable energies and the security of supply. The new version of the programme is more clearly geared towards the objectives of the Brandenburg Energy Strategy and enlarges the circle of those eligible for funding. Grants are particularly available for heat pumps and energy retrieval systems, and for project planning, implementation and final evaluation. In 2010, thirty- - Page 10/32 -

five projects benefited from funding amounting to around EUR 4.1 million in total, while in 2011 forty-three projects were funded with around EUR two million. As mentioned above, the RENplus programme also provides for the funding of events and measures aimed at increasing the businesses awareness of the advantages of energy efficiency improvement. Industry-specific concepts aimed at increasing energy efficiency in business processes and introducing energy management systems in companies are also funded by the RENplus programme within the framework of the GRW networks. Furthermore, a series of events organised by the Brandenburg Economic Development Board/EnergieAgentur Brandenburg focused on such topics as energy efficiency in municipalities and contracting for hospitals. An evaluation of the networks and institutions working towards increased energy efficiency underscored the central role of the Brandenburg Economic Development Board. The evaluation also took into account the coordination activities and the range of information services provided by the networks and institutions. The creation of a central website dedicated to energy (www.energie.brandenburg.de) was a step in the right direction. The website of Brandenburg s Intermodal Nodes (www.gleisanschluss-brandenburg.de) also aids SMEs in choosing carriers for freight transport. The website includes an interactive map of the nodes and provides information from the infrastructure database run by the state of Brandenburg. The aim is to boost rail cargo and group transports. The development of clean technologies is one of the major current trends, and Brandenburg hosts several clean technology businesses. The term refers not only to technologies, but also products and services that contribute towards increasing energy and material efficiency through resource-saving, sustainable energy production, recycling services and environmentally friendly water/wastewater management. Clean technology is thus a cross-industry topic that generates jobs, innovation and added value in many branches of the region s industry. The innobb strategy defines clean technologies as a cross-industry topic, i.e. growth drivers in the clusters and providers of future-oriented businesses and market trends. They contribute towards increasing the efficiency of companies by incorporating cross-industry technologies and processes. To promote Brandenburg s already strong position in the clean technology sector, the Brandenburg Economic Development Board initiated the CleanTech task force, which supports the individual clusters and contributes towards developing the potential of the green economy. Brandenburg s environmental partnership is based on pragmatism, mutual trust and the willingness to compromise between industry and environmental management: The department responsible for environmental policy involves business representatives in drafting and implementing the environmental legislation and conducts regular consultations on Brandenburg s legal practice. The aim is to improve the economic framework for sustainable development without lowering the environmental standards, for instance. By the same token, the various chambers and associations pledge to implement a sustainable economic approach more strongly in the companies especially in the form of environmental management systems like EMAS. The state government rewards these environmental efforts on the part of companies through public recognition, fee reductions, enforcement relief and the possibility of participating in Brandenburg s environmental partnership. Thus, this partnership offers companies special access to contacts, information and events related to environmental and industrial issues. - Page 11/32 -

Brandenburg s environmental partnership has blossomed into an important instrument of the region environmental and economic policy. This network currently comprises seventy-seven companies from craft businesses to global concerns. In 2011, another five companies including BTU Cottbus joined the network. The dialogue with business representatives has yielded many pro-business solutions in environmental legislation, even if conflicts of interest continue to exist and demands from entrepreneurs cannot always be satisfied par for par. Brandenburg s environmental partnership is to be developed further into an attractive brand for economic activity in terms of sustainable development in years to come. To this end, the network function and external impact of the project are to be improved considerably. Implementation simplification and the organisation of high-value information events by the state government should offer businesses more practical advantages. The network intends to promote sustainable economic activity and should align itself with the efforts of the state government in developing an environmentally friendly industrial policy. 2.4 Internationalisation M 4 Directive, Enterprise Europe Network, Collaboration with Poland, Access to Transnational Markets In the present context, internationalisation primarily refers to support measures aimed at enabling Brandenburg SMEs to gain a foothold on international markets, whether it be within the EU or in the rest of the world, in order to increase their turnover, secure jobs and create new ones. However, internationalisation also refers to the possibility for Brandenburg SMEs to cooperate with foreign businesses and participate in international networks in order to acquire knowledge and perform technology transfer. Programmes for SME internationalisation not only include business-to-business measures, but also transnational projects aimed at improving a region s transport infrastructure. The business-to-business measures include the following tools: M 4 Directive The Directive to Promote the Management, Marketing, Trade-Fair and International Activities of SMEs was issued by the MWE. In particular, it supports small and medium-sized enterprises that intend to: - improve their management, company strategy and marketing activities on the German market; - participate in trade fairs; - develop marketing activities before entering foreign markets; - develop marketing activities tailored to particular markets or industries; - acquire third-party innovation services for the certification and adaptation of products to new markets. Moreover, the directive facilitates the access of Brandenburg SMEs to EU support programmes such as the Seventh Framework Programme for Research, Technological Development and Demonstration Activities. - Page 12/32 -

Berlin-Brandenburg Foreign Trade Conference This conference organised alternately by the Berlin and Brandenburg states is aimed at informing and motivating SMEs with little or no experience of foreign markets. It approaches various topics and problems of regional significance and includes workshops for in-depth information, such as on customs legislation. The conference also includes a forum during which participants have the opportunity to meet representatives of major companies that operate in the Berlin-Brandenburg region and have a wealth of experience in foreign trade. The 10th Berlin-Brandenburg Foreign Trade Conference is to be held in Berlin on 12 November 2012 and will focus on the healthcare industry. Enterprise Europe Network (EEN) This network is a structural measure that provides Brandenburg SMEs with advice and practical services as regards business activities on the European market. Participants in the network can take advantage of opportunities on the EU internal market. The network organises workshops and training sessions on a variety of topics, such as EU project management or EU application management. It also organises road shows to present the services made available to SMEs by the European Union. ProTraC Tailored advice complements the Enterprise Europe Network s range of services. During the next EER year, for example, the Brandenburg Economic Development Board is to run the ProTraC project aimed at providing active support for the region s companies that intend to apply for EU projects or develop internationalisation strategies. JOSEFIN project (JOint SmE Finance for INnovation) With this project conducted within the framework of the Interreg IV B initiative, the ILB bank, the Brandenburg Economic Development Board and their partners intended to support SMEs in search of funding for innovative business ideas and internationalisation activities. The project ended in early 2012 without the creation of a Brandenburg-specific financing tool. However, the participants made extensive use of the tools available, in particular the Brandenburg credit line and the grant programme for innovative start-ups developed by the MASF. Please note that the network of the JOSEFIN partners still exists and remains available to support SME internationalisation projects. 2007 2013 Interreg IV A Programmes A series of business networks and cooperative projects are running to intensify the contacts between SMEs on both sides of the River Oder: Brandenburg and Mecklenburg-Western Pomerania on the German side; voivodships Lubuskie and Zachodniopomorskie on the Polish side. The projects focus on Priority 2 (support for business cooperation and scientific collaboration) and include coaching services, cooperative exchanges and industry conferences. The Wikon project is particularly worth a mention. This coordination network developed by the business support agencies of Cottbus (Germany) and Zielona Gora (Poland) aims to - Page 13/32 -

intensifying business integration in the region of the Spree, Neisse and Bober Rivers, and improving both the competitiveness and collaboration of SMEs on both sides of the border. Collaboration with Poland Outside the Framework of the Interreg Initiative - The MWE directly supports business collaboration between Brandenburg and the Lower Silesia region. In April 2012, for example, a delegation of politicians, entrepreneurs and regional officials from Lower Silesia visited Brandenburg for the second time. The study trip focused on renewable energy sources and talks aimed at developing a joint strategy in this domain, and was based on the common activities of both regions as regards energy production. The state of Brandenburg has been invited to present its economy in Wrocław in the autumn of 2012. - In order to boost ties between German and Polish businesses in the chemical industry, the MWE organises a cooperation forum during the annual Chemika trade fair in Szczecin. The next Chemika is scheduled for the autumn 2012. - As Poland is a partner of this year s Berlin Air Show (ILA), the MWE also plans to contact with Polish businesses during the event. The following transnational projects were developed jointly by the states of Berlin and Brandenburg within the framework of the Interreg IV B initiative to improve the region s transport infrastructure: ScanDria The Berlin-Brandenburg region is a key contributor to this EU-supported project with the following goals: - Improvement of the transport infrastructure in the northern part of the Scandinavia/Adriatic corridor; - Development of innovative and energy-efficient logistics concepts; - Development of logistics solutions to boost the potential of the region s businesses. In particular, Berlin-Brandenburg developed logistics concepts that prioritise railways, interconnect rail and road transport, involve regional SMEs and provide them with growth opportunities. Moreover, the region and its partners in the ScanDria project suggested a reorganisation of the Trans-European Transport Network project to reinforce the Berlin-Brandenburg region. The suggestion was discussed in November during a hearing that involved European deputies and representatives of both DG Move and DG Regio. SoNorA Several institutions in the Berlin-Brandenburg region participate in this EU project aimed at: - providing practical support in the improvement of the transport infrastructure; - improving the range of services for intermodal freight transport; - developing transnational logistics plans; - supporting new regional development potential. All in all, the SoNorA project will improve Europe s transport infrastructure, create competitive logistics solutions all along the Scandinavia/Adriatic corridor and develop implementation - Page 14/32 -

solutions taking into account SMEs as service providers. A major step towards the goals of the SoNorA project was the organisation of a business conference with related workshops within the framework of the North-South Programme initiated by the German Chambers of Commerce and Industry in November 2011. Directive to Support the Transnational Knowledge and Experience Transfer for the Development of Future-oriented Labour Policy The MASF issued this directive in April 2009. Until December 2011, as many as twenty-five projects involving partners from seventeen EU member countries and Swiss partners benefited from support from the ministry. The cooperation projects aimed at securing the availability of a skilled workforce, developing environmental strategies to secure jobs, creating jobs in rural areas, supporting start-ups and facilitating the integration of disadvantaged groups into the job market. The directive is supported by the ESF and remains valid until 31 December 2013. 2.5 Start-up Support Networking, Coaching, SME Takeovers, Technology-oriented SMEs Supporting start-ups is another pillar of Brandenburg s labour and SME policy. In 2011, the selfemployment rate in the region (12.3%) was above the national average (10.9%), which indicates the success of the state government s policy. In the national ranking, Brandenburg was third behind Berlin and Bavaria. In order to guarantee the long-term success of the start-up support, the state government focuses on innovative companies and provides extensive advice for businesses prior to their establishment and in the first phase of their development. Moreover, a close cooperation between all parties involved characterises Brandenburg s start-up support. The successful collaboration of various institutions and organisations within the Gründungsnetz Brandenburg network (four Brandenburg ministries, regional Chambers of Commerce and Industry, BIEM association, LASA agency, Brandenburg Economic Development Board, ILB bank, Bürgschaftsbank Brandenburg, agencies for labour) is being continued. In 2012, contacts are to be established with the Gründungsnetzwerk Berlin to share experiences and examine the possibilities of a collaboration of the two networks. Directive to Support Qualification and Coaching Measures for Start-ups and SME Takeovers in Brandenburg This directive unifies all start-up support measures ever taken by the MASF. It played a key role in the decision of the EU commission to select the ministry among the finalists of the 2012 RegioStars Award aimed at highlighting innovative projects which could be inspiring for other regions. Brandenburg has developed an extensive and differentiated range of incentives for start-ups that is clearly distinct from other regional and national support programmes, although it allows for synergies with such programmes. For example, Brandenburg s Pilot Services are the regional partners of the nationwide Gründercoaching Deutschland programme run by the KfW - Page 15/32 -

bank, so that the new entrepreneurs remain in contact with their regional advisers and, simultaneously, enjoy coaching within the nationwide support programme ( single-source advising ). The directive remains valid until 31 December 2013 and possibly until 2020. With the help of the European Social Fund, the MASF has been supporting qualification and offering advice on support measures for prospective entrepreneurs. Of the 11,000 people advised by the ministry services between 2001 and 2010, seventy-five percent created their own business. The ESF support to new businesses in Brandenburg has a considerable impact on the job market, as increasing the number of stat-ups contributes to reduce the number of unemployed citizens. Moreover, forty-three percent of those supported were women, the figure being considerably superior to that of women founding new businesses or opting for selfemployment in general. According to the MASF guideline aimed at supporting qualification and coaching of entrepreneurs who found or take over a business, the following programmes and measures are to remain in effect until 31 December 2013: Regional Pilot Services, Pilot Services for Immigrants, Start-up Services at the region s universities, IbM ( Innovation Needs Courage ), Start-up workshops for young entrepreneurs, as well as complementary experimental measures. Due to the demographic changes in the region, since 2003 the MASF and Brandenburg s three Chambers of Crafts have also been supporting entrepreneurs planning to take over SMEs. Fit to Take Over an SME With the support of the MWE, the Lower Lusatia Chamber of Crafts and several local businesses launched this pilot project aimed at facilitating the takeover of handicraft businesses, which is due to run until the autumn 2012. degut (German Start-up and Entrepreneur Conference) This is the largest conference organised in Germany for informing prospective entrepreneurs. The 27th degut was held on 21 and 22 October 2011 at the former Berlin-Tempelhof airport and attracted some 6100 visitors more than ever before. As many as fifty-two percent of them were women, which represents an increase by nearly eight percent within five years. The visitors could participate in free seminars and enjoyed well-founded information provided by more than 120 exhibitors and sixty advisers. Moreover, the visitors had opportunities to make contacts with other prospective entrepreneurs, representatives of support agencies and mentors. The 28th degut conference is to take place on 26 and 27 October 2012, once again at the premises of the former Tempelhof airport. Berlin-Brandenburg Business Plan Competition This is Germany s largest and most successful regional start-up competition. As many as 1554 prospective entrepreneurs participated in the 2011 edition and developed 808 business plans. Thirty-six women participated in the third step ( Development of a complete business plan, only - Page 16/32 -

thirty-one in 2010). The Berlin-Brandenburg Business Plan Competition was organised between November 2010 and June 2011 and included 106 events with nearly 7,600 participants. More than 200 coaches and 400 jury members supervised the competition. It was so successful that it is to continue until at least 2014. EAPBbg (Einheitliche Ansprechpartner für das Land Brandenburg, single point of contact for all authorities of the federal state of Brandenburg) This website complements the start-up support services provided by the MWEA as it enables prospective entrepreneurs to complete all the necessary applications, such as business registration or entry in the register of qualified craftsmen, online. Moreover, the EAPBbg website coordinates all processes with the relevant authorities and gives direct feedback to the applicant (receipt vouchers, authorisations, etc.). Before applying online, however, prospective entrepreneurs can obtain information on the legislation that applies to the projected business activity. BIEM (Brandenburgisches Institut für Existenzgründung und Mittelstandsförderung e.v.) This association was founded by nine Brandenburg universities with the support of the MWE to provide long-term support for the region s start-ups. Since early 2011, location managers have been running offices at the participating universities to provide basic information for students who are considering founding a business. The location managers also perform networking and canvassing activities for sponsors at the universities, thus providing interdisciplinary support for the students. IbM (Innovationen brauchen Mut, Innovation Needs Courage ) The MASF supported this pilot project between August 2006 and March 2008, ran an altered version until February 2010, and finally adapted it to the start-up support directive issued on 30 December 2012. Between August 2006 and June 2011, as many as 302 prospective entrepreneurs benefited from the coaching provided by the IbM project and 228 people (including 47 women) founded new businesses. The ratio between prospective entrepreneurs and new businesses is thus seventy-six percent, which means that the project was successful if we consider the financing difficulties, especially for innovative, technology-oriented businesses. Brandenburg s universities collaborate with the MWFK in improving the entrepreneurial spirit of students and alumni and their readiness to found new businesses. In July 2011, Potsdam University was again selected among Germany s top-ten institutes of higher education with the best entrepreneurship promotion programmes. Moreover, Potsdam University won the competition organised by the Federal Ministry of Economics and Technology (BMWi) under the title EXIST-Gründungskultur Die Gründerhochschule. The prize consists in approximately EUR 800,000 a year awarded by the federal government for up to five years. More generally, the MWFK optimises its support for start-ups through targeted contracts with Brandenburg s universities. - Page 17/32 -