Thoughts on the European start-up ecosystem and the Entrepreneurial university role model

Start-ups and innovation are a hot topic in Europe. As they might increase growth and create jobs, it is no wonder that politics and universities alike are very much interested to understand with what tools they can simulate more of it.
Thus, the last six to twelve month have been filled with discussions and talks about tools and there implementation, intensifying as I outspoke some opinions about a local ecosystem and a university initiative in e.g. a public discussions about entrepreneurship.

Start-up ecosystem Europa Universitaeten Bolzano BozenThe need of a qualified ecosystem discussion

Key issue in most discussions is that the systemic, data based view of a consultancy designing such programs is different from the "we need tools" driven view in a situation determined by a catch up sentiment.
Tech Transfer Offices, Spin-offs, Incubators, Accelerators just to name a few – we know all these tools, studied them all.
But, what about the underlying context of the ecosystem of origin and the underlying context of the ecosystem of application?

The chance to define the ecosystem of the next 20 years

In short, we are in a situation of emerging European startup ecosystems, where we can define the ecosystem, the trajectory and the innovation we think might be desirable. But - for that, we need a qualified discussion about ecosystems and its various stages prior to derive at the tool implementation.
As this view is sometimes difficult to explain, I much welcome the occasion of an upcoming workshop about "Incubators and the Entrepreneurial University" at the Free University of Bolzano (see the interesting program here) to discuss three key issues.

Using the workshop program @UniBZ as an indicator for the discussion

First, congratulations for setting up this two-day program. At the same time, I think the workshop program is a very good example and proxy of the missing elements of the discussion as it lists a lot of individual experiences and case studies, but no integration of them in an ecosystem view and the topics discussed by ecosystem participants. I admit that it is judging by program titles only. I e.g. would like to know the content of Prof. Lecher's presentation who probably might address the point, but it is worth to take the risk here to contribute to the discussion.

Obstacles for the European entrepreneurial university and program design

Since it is a complex topic, I will narrow down the arguments to universities and their ascribed role as "entrepreneurial". This, first of all, is a desirable role model, but can European universities deliver?
I am just quoting a professor when stating that technology transfer does not work in Europe (and in the US to a certain extent). So, why go for e.g. university incubators, when tech transfer needs to be fixed first? Can they really go onto this mission path?
Books could be filled with this discussion, but the short answer is: Yes, but! The success depends on factors e.g. if the programs are designed properly and the surrounding stakeholders understand the limits of European universities. The three key issues for more quality in such initiatives and therefore for the ecosystem are:

Issue number one – governance structure

It is important to understand that the governance structure of (most) European universities is not designed for entrepreneurship and start-ups. Moreover, it does not really have to, since its mandate is today for higher education in form of an insurance product; the degree, meaning a laurea/diploma shows that a student might be employable, but not that he/she is an entrepreneur.

The best proxy, to pin this point about issues coming from structure down, is "time to take decisions". Having done a university spin-off, as well as worked with institutions on an entrepreneurial program design, and having realizes one ideation project in Alto Adige I can tell that it is excellent to have a workshop like this in 2014. Nevertheless, with the eyes of the private sector participant and some background knowledge, we could have had it in 2010/2011, already, hadn't we? This is just to point out that larger organizations have very different time horizons for decisions compared the decision making process of start-ups and entrepreneurs.

In conclusion, while the decision making structure might be fine to run a university, it is not fitting to engage in entrepreneurial projects and there is a danger of copying the same structure to the new program, institute or entity which then applies it to its "customers", too. My advice: Address the issue accordingly in a program design in correspondence to the expected output. There are interesting structures available.

Issue number two – what to transfer, incubate or accelerate?

As much as I am convinced that every university can support entrepreneurs or generate them with education, I am more skeptical about the ability of every university to generate technology at a scale to incubate or venture finance it.
This is not necessarily a matter of research quality, but much a question of surrounding factors, named the individual local and national innovation ecosystem and its current stage of development. Just a catchword: Do you remember the economic science part of Porter's work? Financial resources play a role as well as available research partners, job opportunities and regulation.
To give an example from Germany, Munich: As much as the fund of TU Munich is a courageous step in the right direction, as much one has to understand the deal flow issues in an developing ecosystem (contrast that with Berlin). Project it back to the workshop agenda and one sees the implications to the Italian situation.
Such an analysis should be part of a tool evaluation and design, also on academic level, which might lead to very different measures and action points in a program. They might be e.g. much more informal, which is already contradicting with the first point, as spending budget on such activities has to be justified. The list could be continued here. Just one more question as food of thought: why incubate when you can accelerate?

Issue number three – Interaction with the private sector

That point is partly a logical derivation from point one and two. As universities are asked (not only) by politics to deliver "entrepreneurship", they need institutions as a proof for their being entrepreneurial.
Besides the level of quality one can reach within them, this implementation sets boundaries to interaction with private ecosystem stakeholders.

These are however, speaking out of experience, much needed. Not to teach students and researchers about economic models or research, but to align the academic outlook with a day-to-day market driven view. After having seen a double-digit numbers entrepreneurship centers/incubators in several countries and their results, the reader might understand that the enthusiasm for the "local" next big thing is low as it is not as unique. This remark does not downplay the need and quality of local "fabric"; it just shows the feedback issues involved, by institutional boundaries.

The optimal degree of interaction of course depends on the many factors, but especially in emerging systems, it could make much more sense to make budget for private partners available that can compete for it with the best-designed project. In such a way, a university fully uses its competence of choice and evaluating didactic quality, while the start-up end entrepreneurial part is left to the real world entrepreneurs and experts.
In addition, the dynamics of an evolving ecosystem are much better integrated than by trying to do catch up again with the fast moving world of start-ups that do not have the time for basic research.

The bottom line of it ... let's do it right

There are many more, important variables, but for this short blog post to stimulate discussion it is time to come to the bottom line.
Now you have three examples out of many important items that are often problematic in program implementations. You as reader should now understand the wider context of a start-up ecosystem: You saw the possibilities and limits of universities in contributing to it. Maybe I could also convince you that this framing of context should be the framework for a general discussion (and e.g. the workshop agenda to stay in the example). Because only then the European ecosystem evolves.

Concluding I hope, I could illustrate the point why a now a quality discussion not only of tools and programs, but the context of tools, our innovation ecosystem, is necessary.
In case I can help you with your program or a contribution, just contact me.

Thanks for reading and to all participants – have two great days.


Start-ups can make use of eine Stunde Start-up Beratung

Iceventure, own work

A. Eggerz is entrepreneur and managing director of Iceventure.

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