The Importance of Entrepreneurship to Economic Development ... za saradnju sa EU/The Importance of... · The Importance of Entrepreneurship to Economic Development in ... • What

The Importance of Entrepreneurship to Economic Development in

Germany

Dr. Branislava Laux-Mali

Outline

•  Short curriculum vitae of the speaker

•  Overview of Germany

•  What is entrepreneurship in general?

•  Why entrepreneurship plays a vital role in the economy?

•  Small and medium-sized enterprises

•  Munich Area and the knowledge importance

•  Summary

15.06.2012 Dr. Branislava Laux-Mali 2

Short curriculum vitae of the speaker •  Study of germanistics and political sciences with PhD (Dr. phil) at Ludwig-Maximilians-University in Munich •  Laux Global Consulting GmbH - trade relations between

Germany and Serbia (www.lauxglobalconsulting.de) •  Lecturer for entrepreneurship and innovation at the University for Applied Sciences in Munich •  Member of the Serbian Chamber of Commerce – business council for diaspora in Germany •  Coordinator of the cooperation between Belgrade and Munich-based University

15.06.2012 Dr. Branislava Laux-Mali

Dr. Branislava Laux-Mali

3

Overview of Germany •  Federal Republic of Germany Population: 82,329,758 •  Ethical groups: Germans 91.5%, Turks 2.4%, other 6.1% •  Capital: Berlin 3,471,756 •  Germany comprises sixteen states •  Reunification: 3rd oct 1990 •  World`s fourth largest economy by nominal GDP estimtate 2011 $ 3,577 trillion, fifth largest by purchasing power parity 2011 estimate total $ 3,099 trillion •  Second largest exporter •  Third largest importer of goods •  Very high standard of living and social security •  National unemployment rate in March 2012: 7.2% •  30 German-based companies are included in the DAX, the German stock

market index


What is entrepreneurship in general?

•  17th and early 18th centuries: Richard Cantillon and Adam Smith

•  20th century: Joseph Schumpeter: „Theorie der wirtschaftlichen Entwicklung“ (1911)

An entrepreneur is a person who is willing and able to convert a new idea or invention

into a successful innovation

•  Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to

replace in whole or in part inferior innovations across markets and industries,

simultaneously creating new products including new business models

•  Entrepreneurship is the process of creating something new with value by devoting the

necessary time and effort, assuming the accompanying financial, psychic, and social

risks, and receiving the resulting rewards of monetary and personal satisfaction and

independence. (R. Hisrich/M.Peters)


Why entrepreneurship plays a vital role in

the economy? •  Provides employment to huge mass of people

•  Contributed towards research and development system

•  Creates wealth for nation and for individuals as well •  Sky-scraping heights of apparent prospects

•  It is a challenging opportunity for the people •  Entrepreneurship provides self sufficiency


Small and medium-sized enterprises in Germany

Small and medium-sized enterprises - the backbone of the Germans economy: •  represent 99.7% of all businesses •  produce 38% of taxable turnover

•  account for nearly 49% of total net value added by companies

•  provide roughly 60% of all jobs requiring social insurance contributions

•  3 636 million enterprises with 25.35 million social insurance employees and a turnover of € 5,362 billion in sales recorded in Germany



•  Share of small and medium-sized enterprises based on choosen characteristics (2007)

employees

enterprises

revenue

Gross fixed capital formation

Gross value added


Small and medium-sized enterprises in

Germany

679,100 companies were founded in Germany in 2011


In total SEM SEM-‐‑share

Number of Companies 2010 3.68 million 3.67 million 99.7 %

Revenue of the companies 4,987.94 billion 1,947.97 billion 39.1 %

Self-‐‑employed persons 4.26 million

Net value added 51.3 %

Praise for Germany as Europe`s best SMEs cut off

•  The best cuts from Germany - One in five medium-sized enterprises in the EU comes from Germany in 2010 (SME Week, Brussels)

•  Germany employes an average of three employees more than the EU average (7.3 versus 4.2)

•  „The recovery in 2010 came from SMEs. This clearly shows how important they are for growth and employment. The SME Week we want to highlight the crucial role of small and medium enterprises for European competitiveness. Europe needs new, creative and highly innovative entrepreneurs who are willing to take risks. This is the main way to overcome the crisis“ (Commission Vice A. Tajani)


Priorities of Germany's SME policy

•  Federal Ministry of Economics and Technology has launched a new SME initiavive called „Building on SMEs: greater responsibility, greater freedom“

•  Seven prioritity areas are crucial for the commercial succsess of SMEs: - Innovation - Skilled workers - Business start-ups and business succession - Market opportunities abroad - Financing - Raw materials, energy, and materials efficiency - Bureaucracy reduction


Federal funding through the KfW SME Bank

•  KfW enrty fee for start-up to apply for public funding

•  Entrepreneurial capital for SMEs to subordinate financing

•  Corporate loans is aimed for the long-term financing of investment

•  Employment Agency/Job Center offer out their own entry fees and grants for business start-ups out of unemployment

•  Nation-wide centralized information center In-house database of over 2,000 funding and grant programs



New Entrepreneurial Iniciative 2009

The more intense the colouring of one region, the higher is the intention to establish a start-up.

The NUI-Indicator sets the number of business registrations of the citys in Germany in relation to the employable population at the 31st dec of the last year.

à Start-ups especially in the south of Germany, in Bavaria.


The Economic Region of Munich

§  Motivation §  Innovation and Leadership-Skills §  Innovation culture


Entrepreneurship knowledge based

Entrepreneurship is neither a science nor an art.

It is a practice.

It has a knowledge base.


Munich as a Centre of Knowledge


Munich as a Centre of E‘ship Knowledge Unternehmer-‐‑

tum gGmbH

LMU EC GmbH

SCE gGmbH

Cetim gGmbH


Munich as a Centre of E‘ship Knowledge

•  At the end of the nineties the first center for entrepreneurship in Germany was establisched

•  Today there are more than 60, the tendency is increasing

•  Support for the establishment of centers for entrepreneurship in Germany is primarly understood as a public task


Germany as a „start-up country“

´Entrepreneurship´ in Germany, especially in Bavaria attaches great importance not only in the teaching field but also in economic and political. As the picture shows is Germany today a „start-up country“.


•  Falk F. Strascheg, founding partner of EXTOREL (venture capital organisation)

•  One of the most experienced and successful venture capitalists in Europe

•  In 1971, before founding TECHNOLOGIEHOLDING, Falk F. Strascheg had founded Laser Optonic in Munich

www.sce-web.de


What exactely is the SCE doing?

Motivation & Qualification

Start-‐‑Up Support

Impulses Network & Partners

SCE


The Incubator: SCE Teams

LivingHub LivingHub LivingHub stands for an attractive socially responsible life style in urban housing with little ecological impact. Life in a LivingHub allows both to express ones individuality as well as to experience a sense of community. The architecture of a LivingHub includes a variety of rooms for communal use; these are managed professionally. Furthermore, consumer goods are provided for communal usage and household-related services are available. Unternimm-dich "Take-up" (Unternimm-dich) has to be THE platform for the target student engagement in Munich. We are pushing for innovative projects and social businesses that produce added value for society. There, students are contributing their expertise. We provide students with their own project ideas, a network to realize their ideas. IceDrake We are currently developing the worlds first funsport sled which features integrated steering and shock absorbers. Because the IceDrake uses carving-skis instead of skids it can perform extremely tight turns – simply by shifting your weight. The shock absorber greatly improves ride control while reducing strain on your back. Siqens Siqens develops a new fuel cell technology that combines the benefits of the direct methanol fuel cell (liquid fuel, availability) with the advantages of hydrogen fuel cells (high power output, low costs). www.siqens.de algeagrowth We focus on the development and production of a cost-efficient photobioreactor, to produce eco-friendly biomass using microalgae. The algae-biomass will be the resource, dependent on the strain of microalgae selected, for the production of e.g. biofuels, pharmaceuticals, cosmetics and animal feed. www.algaegrowth.de SPYRE SPYRE connects innovative LED technology with individual design. Therefore the SPYRE team developed new LED panels and effective control technology for the production of multi-dimensional LED products. Applications include high-quality products such as individual light advertising, equipment for trade fairs or for the B2C market. Unikat Automat Our idea is to sell unique designs and artwork in a vending machine. With "Unikat Automat" we give artists a place to market their products, thus marketing themselves, and therefore make their art and design more easily accessible to the public. www.unikatautomat.com bodyboom bodyboom is developing an interactive control system for fitness programms in the sector of home fitness." www.bodyboom.de FTAPI FTAPI is concerned with data transfer by a technique that is platform independent and geared to companies requirements. Thanks to a new cryptographic technique FTAPI guarantees a save solution - even in case of server theft. www.ftapi.de

sira munich

Eisbox

around 20-30 teams

Phase I Phase II MORE EXIST/ FLÜGGE

Venture Capital

Pre-Incubation Incubation Exit


Summary

•  Promoting entrepreneurship and enhancing the entrepreneurial dynamic of each country should be an intergral element of any government`s commitment to boosting economy. Government policies and programs targeted significantly at the entrepreneurial sector.

•  The higher the levels of entrepreneurship is in the nation the higher is its level of development.

•  Lastly, one can wind up by saying that entrepreneurship strengthens the economic growth of a nation, as well as give power to society, speeds up modernization and transforms way of thinking of the common man.


THANK YOU FOR YOUR ATTENTION

Documents

The Importance of Entrepreneurship to Economic Development ... za saradnju sa EU/The Importance of... · The Importance of Entrepreneurship to Economic Development in ... • What