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“Germany stands in its own way because of its incomparable jungle of rules and regulations”

TRANSFER magazine talks to Dominik Fehringer, director of the Economic Region of Ortenau (WRO)

The concept is in place – but will it translate into a business enterprise? This is just one of the many questions the Economic Region of Ortenau (WRO) looks at every day under the leadership of Dominik Fehringer. TRANSFER talked to Fehringer about the requirements of the young generation of business founders and the challenges of regional economic development.

Hello Mr Fehringer – according to a recent study by McKinsey, the German economy could be growing 0.3 percent faster if small and medium-sized enterprises in Germany systematically exploited the opportunities presented by digital transformation. But only one in two SMEs is actually exploiting opportunity properly. To move things forward, the WRO is now increasingly involved in forging networks between the core economy and the startup scene. This is good – but why did things take so long?

Starting at the beginning, I believe in the power of small and mediumsized business in Baden. Maybe McKinsey also has to ask the right people. Every day I get to see the energy that Ortenau companies invest in digital transformation. We actually organized the first Industry 4.0 events several years ago, when the term hadn’t even gone international. A large proportion of our roughly 70 annual events now deal with digital topics.

The voluntary help given to people setting up a business has shifted to the fast lane in recent years. As a result, our members, the firms that form our advisory committee, and the regional Volksbank and Sparkasse institutions have decided to establish a professional framework. Since last year, the WRO has been responsible for business startups in the region. I can think of no other model anywhere in Germany offering such a fast-track package of options to both parties – companies and startups.

You now have a central port of call for young business founders – startUp.connect Ortenau, headed up by Florian Appel. What’s the concept behind this and what are your expectations?

WRO being given responsibility for supervising the startup scene was not something anyone could bank on. But the option came along to use this strong network to do it. Everybody in the region who had already been involved in promoting business startups said it was the right way to go. That included the district authorities, the cities and municipalities, but also the banks, the chambers of commerce, the universities, transfer organizations, and other key players. There was an intensive one-year set-up process before things got underway. Everyone invested a lot of energy and know-how. For those involved, the results are something they can be proud of. Once again, the region has shown that people don’t compete against one another here in terms of know-how, they all pull in the same direction. This puts us a long way ahead of other regions. Now that the new startUp.connect brand is in place, we expect more awareness of the startup scene, the best possible supervision, different ways for startups to network with established mediumsized businesses, and thus also the transfer of innovations.

What’s been achieved so far? Are there any promising startups working with you – about to get out of the starting blocks?

A lot’s happened! startUp.connect is actively involved in three regional startup centers: the technology park in Offenburg (TPO), the innovation and technology center in Bühl (BITZ), and the center for trade and industry in Hornberg (ZIG). We’re also receiving support from private initiatives. Florian Appel is going full steam ahead establishing a startup scene. At the TPO, a co-working space has been set up and the first tenants have already moved in. We’ve set up the first part-time accelerator in the whole of Germany. This is a place for schoolchildren, students, and people in employment to work in their spare time on good ideas. They also have access to the network established by the WRO, which consists of experienced mentors. We call this network the Black Forest Accelerator and it got underway last November. It’s being moderated by Uwe Baumann. On top of this, we’ve also set up a series of events to offer plenty of variety for startups and different ways to get to know each other and exchange ideas. These include a series of start- Up.connect nights. On every last Wednesday of the month, the startup scene meets up at Brauwerk in Baden, which is also a member of the WRO. The startups introduce themselves to the others and get to hear about all the new ideas. Over and above this series of events, there are also things like the hackathon, where programmers research and work together on special topics. The important partners who helped us with this were Offenburg University, the Volksbank in Ortenau, sevenit, the AOK, and the city of Offenburg.

Most companies are set up in big cities. As a result, lots of medium- sized businesses find it difficult bringing experts in digitalization or IT on board to work on new digital technology projects on site. What can the Ortenau region offer from its repertoire that cities like Hamburg, Munich, Cologne, or Berlin can’t?

It wouldn’t be wrong to say that there’s been a strong tendency for startups to uproot and leave. People who have grown up in Ortenau can set up a business in lots of countries in the world or European cities after school or university. We know a number of business founders who’ve left the area. The urban areas appeal to them with their hip culture of business startups. And a lot of exceptional things have happened there. But a lot of it is just hot air. If you’re setting up a business and you’ve got a great idea for a digital innovation in manufacturing, you’re not going to bump into your customers in a hipster coffee lounge in a trendy suburb of Berlin. That might be the place you feel most comfortable in at first with all its app developers, but at the end of the day you’re going to have to get on a plane and fly to Baden-Wuerttemberg to have a meeting with manufacturing companies. From the very first day, we offer a direct line to world-leading industries in the powerful home of medium-sized businesses in Ortenau. This is a USP. It’s how we plan to keep smart people in the area, but also attract founders from other places to Ortenau.

When people first think of startups, most associate it with Silicon Valley – where even teenagers earn millions on tech. It’s much more difficult being innovative and successful in Germany. What are the differences between the startup scenes in Germany and the United States?

It’s no more difficult being innovative in Germany. It’s just more difficult translating ideas into products. I’ll illustrate this with two examples. The travel services offered by Uber could never have been invented or gotten off the ground in Germany. The legal framework in the taxi industry wouldn’t have allowed it to. The next example: Imagine you’ve got a good idea in an area like digital networking, something like social media, and then you apply your idea under German data protection rules; in all likelihood there’ll be nothing left of your business concept, not even a business model. Germany stands in its own way in this regard because of its incomparable jungle of rules and regulations. What else are you supposed to do if you’re in doubt as a business founder? Turn your back on the country, maybe even be received with open arms in Silicon Valley?

In the past, the most successful German “serial founders” focused first and foremost on making a good copy of existing concepts. Are we simply not creative enough?

There’s nothing disgraceful about tweaking things. China has built a successful economy based on that principle over the past decades. But we do need to get more creativity and introduce more digital knowhow, especially in schools. We have a Regional Education Association in Ortenau, which we use to work up suitable concepts that go beyond rigid curricula. But I want to expressly thank our members of the regional parliament who are working in Stuttgart to establish a framework for future-oriented education. I specifically refer to the state secretary Volker Schebesta, who listened to our appeals from the business community. A couple of weeks ago, the state made a big leap forward in terms of digital education. Any idea that promotes creative digital education and action is good for our future.

What in your opinion can we learn from the international startup scene?

Two things in particular: The environment has to be right. This includes all of the activities we cover with startUp.connect. It also includes removing some of the red tape for business founders. That’s a job for the politicians. Eliminating bureaucracy, swiping the tightly interwoven cobweb of legal clauses off the table and giving credit to the young digital generation. That would do a lot to help. But the other thing that’s also missing in Germany is the range of possibilities to attract startup funding. We’ve got to stop pointing the finger at the banks the whole time. Banks aren’t venture capitalists. It would be helpful if we could change the mindset in society. Even in the international startup scene they have this rule of thumb that only one in ten new companies scales up successfully. But that shouldn’t be a deterrence to investors. In the United States, failure is culturally acceptable. And ultimately, the investors and private equity companies there are still successful.