A short status quo, from inside tech entrepreneurshipBerlin, Septmber 17th

This presentation is written from the perspective of an entrepreneur, an advisor and angel investor to many young companies.

One result of my experience is the Factory Campus in Berlin, in a very early stage Ecosystem, not only bringing together Startups at various stages, but also policy makers, academia and corporations to more directly develop innovative products.

This diversity and interaction is designed to positively impact the local and eventually the European economy.www.Factoryberlin.com

Assumptions

The transformation of society and innovation in the digital industrialization is largely driven by the consumer’s choice of products, and the immediate iteration through direct interaction with its creators.

Innovation therefore is happening in an “open-heart-operation”: small and agile companies have the means to create better products successfully gathering immediate feedback for faster and more targeted business development.

Innovation Through Entrepreneurship (ITE)

The verticalisation of the digital economy is changing: ITE in the future is not in social, hardware, or health tech alone, it is where all these things are being interconnected.

The rise of the “Internet of Things” and “Industry 4.0” as a result is an early indicator for this change in the ITE landscape.

Entrepreneurship is the driving mechanism connecting verticals

Successful ITE is a question of scale: thousands of companies need to be created and most of them will fail in order for the unicorns of tomorrow to succeed.

Successful ITE is a question of scale: thousands of companies need to be created and most of them will fail in order for the unicorns of tomorrow to succeed.

S.W.O.T.On the ITE Ecosystem

The cultural diversity of the European Union can positively impact building truly global companies.

Entrepreneurs require support and incentives to understand that early internationalization in Europe is an opportunity to build global companies in a very large home market. Europe, currently recognized as a challenge in Entrepreneurship, could be redefined as its most significant strength.

Strength

The most apparent EU weakness is the lack of an integrated market.

A successful European rollout of a product and addressing a European market from start is not today`s priority when scaling a fast growing business.

Weakness

A strong focus and support for early stage (scale!) and incentivizing cultural diversity as an opportunity to build businesses inside Europe that can then easily scale globally is the real opportunity at hand.

Utmost innovative policies can make that possible, and the political awareness of the need of a strongEuropean Digital Ecosystem as a continental counter balance has never been greater in the member states.

Opportunity

The current privacy uproar in member states and a lack of understanding in the political sphere of thedigital economy could lead to a nationalization of the Digital Economy activities.

This could even gather local support from national tech players such as telecommunication companies, prohibiting innovation at scale in Europe as a continent.

“The Open Internet” and “One European Market” - as visionary as they still seem - are a prerequisite for all activities in the future of ITE in Europe, and if not successfully implemented the most immanent threat.

Threat

ITE EcosystemThe three key contributors and their roles

Policy can make or break the future of the ITE Ecosystem: creating a legal and social framework that not only supports but increasingly incentivizes all stages of Entrepreneurship individually is a huge opportunity.

The first requirement is for policy makers to understand the Digital Economy, to not overregulate the Internet, and prevent nationally containing activities in the member states. The speed for implementation of new ideas in policy making for the ITE Ecosystem needs to be highly intensified.

Policy

Policy can make or break the future of the ITE Ecosystem: creating a legal and social framework that not only supports but increasingly incentivizes all stages of Entrepreneurship individually is a huge opportunity.

The first requirement is for policy makers to understand the Digital Economy, to not overregulate the Internet, and prevent nationally containing activities in the member states. The speed for implementation of new ideas in policy making for the ITE Ecosystem needs to be highly intensified.

The academic world has the task to not only educate people in becoming Entrepreneurs, but also for Scientists to open up their magic box of potential products in research status to Founders.

The Academic Institutions need to become more entrepreneurial in that: not only moderating the aforementioned process but also participating in risk and thus generating additional funding at scale.

Academia

Successful Entrepreneurs have to take the time for extensive exchange with policy makers, to help design a functioning framework with their knowledge. Founders need to be incentivized, but also actively accept the challenge of early internationalization of their products in a culturally diverse and huge market: Europe.

Large Corporations in Europe have the responsibility to participate in the ITE Ecosys-tem: not only to adopt to the changing landscape, but to support innovation for their home market and actively further support an intercontinental balance, with a long term Return On Investment strategy.

Our society has to adopt culturally for people to undertake the challenge of founding a business more often, for the ITE Ecosystem to function at scale.

Entrepreneurs & Corporations

Successful Entrepreneurs have to take the time for extensive exchange with policy makers, to help design a functioning framework with their knowledge. Founders need to be incentivized, but also actively accept the challenge of early internationalization of their products in a culturally diverse and huge market: Europe.

Large Corporations in Europe have the responsibility to participate in the ITE Ecosys-tem: not only to adopt to the changing landscape, but to support innovation for their home market and actively further support an intercontinental balance, with a long term Return On Investment strategy.

Our society has to adopt culturally for people to undertake the challenge of founding a business more often, for the ITE Ecosystem to function at scale.

Conclusion

If anything by 2020 we could hear investors globally say to Founders: “If you want to build a globalcompany, start in Europe.” Today you hear: “Move to the Valley, or find local money.”

We believe scale at early stage and thus Innovation Through Entrepreneurship not only creates the jobswe need, but has the potential to transform our European society responsibly, creating wealth anddistributing knowledge.

To positively influence the development of ITE one has to think outside of the box like an innovator,have the guts to experiment like a Founder, and iterate like an Entrepreneur along the path ofsuccess.

One has to “eat your own dog food”.

Further Readings & Publications

Policy Brief on the Startup Ecosystem from Germany

1 A startup can defined as every lawful business, that

1.1 is funded at least 80% by its own capital or similar matters 1.2 (i) does not have more that [30] employees and was not

founded more than five years ago; or (ii) shows a significant growth in employees, volume of sales, or profit with in a period of 24 months

1.3 has increased its volume of sales or profit by a minimum of x%

A key finding of the group Forum Digitale Agenda is, that creating a regulatory definition in law textbooks to define startups, similar to the definition of SMB‘s that has widely been adopted by the member states, would significantlyboost early stage growth and thus Innovation Through Entrepreneurship.

The policy brief has been published here: http://www.stiftung-nv.de/152485,1031,111427,-1.aspx

Policy Brief on Fostering a Startup Ecosystem by Up Global

While supporting thousands of community leaders over the past six years, UP Global has consistently found itself at the center of larger conversations about what makes entrepreneurial ecosystems thrive.

Fundamentally, the goal is to provide a global framework for these conversations, that can be adapted to support the unique efforts of the community leaders and entrepreneurs - wherever they may be.

The white paper has been published here: http://blog.up.co/2014/09/08/white-paper-announcing-5-ingredients-fostering-thriving-startup-ecosystem/

Talent DensityPrograms like the proposed US “Startup Visa” and Startup Chile, the government’s successful pilot program to bring global innovators to contribute to their economy, are ways governments can invest in human capital.

Supporting innovation hubs as we have seen in New York and Berlin, driving private sector invest -ment in Tech City in London, and creating physical hubs such as iHub in Nairobi can foster startup density.

Culture Capital Regulatory EnvironmentBy celebrating failure through conferences like Failcon, opening a dialogue between entrepre -neurs and policymakers like the breakfasts at 10 Downing Street have done, and promoting jobs for startups, governments can help create an entre -preneurial culture.

Israel’s subsidized incubator programs provide access to capital, which is critical for new and growing businesses.

Finally, a stable, predictable, and supportive reg -ulatory environment is crucial to creating the nec -essary conditions for a thriving startup ecosystem. Tax policies can help companies start and grow, safe harbors allow companies to flourish, the free flow of information enables companies to com -pete globally, and intellectual property protection with flexible limitations to copyright and patent protections support innovation.

Study on german ecosystem by KPMG BvDS

The study DSM has been published here: http://deutscherstartupmonitor.de/fileadmin/dsm/dsm-14/DSM-2014.pdf

Study on Berlin ecosystem by McKinsey

The study „Berlin Gründet“ has been published here: http://www.mckinsey.de/berlin-gruendet

QUELLE: Bundesagentur für Arbeit; McKinsey

Erwartete Arbeitsmarktentwicklung in BerlinZusätzliche sozialversicherungspflichtig Beschäftigte seit 2010

100.000 neue Jobs durch Initiativen

20202010

Ziel:500.000

+3,1% p.a.

430.000 neue Jobs durch Fortschrei-bung der aktuellen Wachstums-dynamik

Rund 40.000 neue Arbeitsplätze in inno-vativen Branchen durch

1. Erhöhung der Neu-gründungsquote

2. Senkung der Liqui-dationsquote bei Start-ups

3. Beschleunigtes Mitarbeiterwachs-tum in neuen und bestehenden Start-ups

Rund 60.000 neue Arbeitsplätze über Multiplikatoreffekt1

1 Jeder neue Arbeitsplatz in einer hochproduktiven Branche schafft die Basis für 2 - 3 weitere Arbeitsplätze

Berliner Arbeitsmarkt – mit Gründungsinitiativen die von „Berlin 2020“ prognostizierten 500.000 Arbeitsplätze erreichen

Thank you.Contact simon@factoryberlin.com