30 Aug 2012   |   News   |   Update from TU Berlin
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TU Berlin finds the right formula for nurturing entrepreneurs

Spin-outs from TU Berlin are multiplying despite the tough economic climate. This success holds lessons for other universities on how to promote entrepreneurship

The Technical University of Berlin excels at churning out top engineering and science graduates, but lately it has started minting something new – technology entrepreneurs. Over the past four years, TU Berlin students and researchers have created an average 33 start-up companies a year, more than double the rate of the previous four years.

That’s a company-creation pipeline that ranks among the best for any European university, including those where entrepreneurship has a longer and deeper tradition, such as Cambridge University or ETH Zurich. The relatively rapid creation of a hotspot for entrepreneurship at TU Berlin - despite a tough economic environment - holds valuable lessons for other universities keen to support the same dynamic.

Most important is getting the ecosystem right, says Agnes von Matuschka, co-director of the TU Berlin Centre for Entrepreneurship. In addition to courses and incubator space, company founders need regular contact with business angels, venture capitalists, entrepreneurs, service providers, role models, developers, analysts, headhunters, alumni and corporations – a networking community to help guide their idea to market. 

The three-year-old Centre for Entrepreneurship, is a one-stop shop for students and researchers and a key catalyst. The number of start-ups at TU Berlin rose sharply after the first supporting activities were launched in 2007. At one-day business modelling workshops, for example, five external experts evaluate students’ business plans and help them tackle any problems.

It’s not a miracle

Before designing the TU Berlin Centre for Entrepreneurship programme, its staff benchmarked successful counterparts at Stanford, the Massachusetts Institute of Technology and ETH Zurich. Sixty per cent of TU Berlin’s start-ups are information technology companies. “It’s not a miracle what we do. The US tested the approach 20 years ago, and we took it over,” says Jan Kratzer, chair for entrepreneurship and innovation at TU Berlin and co-director of the Centre for Entrepreneurship.

The TU Berlin center now employs a staff of 25 professionals who coach TU students, researchers and professors on how to set up a company, obtain venture capital and win government grants to commercialise their technology. Kratzer and von Matuschka also personally contact 50 professors a year for new ideas and help in mentoring students keen to create a company. “The strategic cooperation between my chair and the start-up service was a milestone,” says Kratzer. “It linked the faculty to the administration.  Entrepreneurship became more popular and more professors became aware of the centre’s programme.”

International financing

Equally important, the centre connects entrepreneurs with the community of investors and external players interested in backing new technologies and innovation, including international contacts. “A community has formed with events and places where entrepreneurs can meet,” says von Matuschka, noting a small core of promising companies have received international financing.

Bringing alumni closer to the university and its start-ups is another key to TU Berlin’s success growing start-ups.  The centre’s staff compiled a book profiling TU Berlin’s successful entrepreneurs and they are regularly invited to participate in lectures and workshops. “We’ve succeeded in opening doors and winning them over as mentors, teachers and angels,” says von Matuschka.

In 2011 TU Berlin garnered an accolade as one of Germany’s top three entrepreneurial universities. Each received a  €3.2 million grant from the German Ministry for Economy and Technology to improve the culture for start-ups. “It’s an excellence programme in entrepreneurial climate and support,” says Kratzer.

Creating a prototype

In fact, German government programmes are now better designed and more effective at supporting the efforts of universities such as TU Berlin. They include monthly stipends of up to €2,500 for researchers interested in commercialising their technology, an accelerator programme to help German start-ups establish US subsidiaries and apply for US patents, and a matching-funds programme for business angels.  Students who win the so-called EXIST start-up awards receive up to €17,000 for creating a prototype and €5,000 euro for coaching.

Since 2010, TU Berlin also has benefitted from European Commission efforts to promote entrepreneurship on campus through the European Institute for Innovation and Technology (EIT). In 2010, the EIT launched three pan-European Knowledge and Innovation Communities (KICs) that link universities and industry and promote innovation and start-ups. TU Berlin participates in two of those communities – EIT ICT Labs and Climate-KIC. “Through the KICs, we have close partnerships with industry – it’s is a door opener,” says Kratzer.

Each KIC runs a summer coaching and pitching competition for student entrepreneurs including sessions on partner university campuses to build international ties. “The KICs have provided an opportunity to enlarge the scope of our world,” adds Kratzer.

More to do

Despite TU Berlin’s achievements, Kratzer and von Matuschka say there is more work to do. Fifty per cent of the centre’s work still focuses on inspiring students and researchers to consider an entrepreneurial path, whereas at universities in the US or Israel, the interest is already there.

“Germany started developing an entrepreneurial culture on campus quite late,” explains Kratzer, noting that the country’s first professor for entrepreneurship was created in 1999. His own chair for entrepreneurship at TU Berlin was created in 2009. “For 10 years [of effort], we have a fine result. Ten years from now, I think we will be able to overcome the negative image of entrepreneurship in Germany,” he says.

Of course, the real test is making sure university start-ups survive and grow. TU Berlin recently linked up with the University of Karlsruhe and the Technical University of Munich to study the survival rate of their combined pool of start-ups. The first assessment is due in November. If the survival rate for the first five years is high, this new crop of start-ups will mark not only a breakthrough in teaching entrepreneurship, but also a critical shift building a more innovation-driven European economy.

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