Press release | 17 August 2020 | bk

Berlin university startups create 62,600 jobs and achieve a turnover of 8.4 billion euros in 2019

The results of the third analysis of start-up businesses with connections to 10 universities in the Berlin metropolitan region provide fresh evidence of the huge significance of university spin-offs for the region’s economy

University spin-offs have an enormous economic significance for the Berlin metropolitan region. In 2019, startups with a connection to the participating universities employed on average 17 members of staff and achieved an average turnover of 2.37 million euros. 71 percent of the startups taking part in the survey are already achieving a profit.

80 percent were set up in the Berlin-Brandenburg region. A look at the areas in which the businesses are active reveals the following: 61 percent of the companies who took part work in the areas of knowledge-intensive consultation services, as well as creative and ICT services.

62,600 employees and a turnover of 8.43 billion euros in 2019

The online survey targeted 5,210 businesses and self-employed individuals, with 750 businesses taking part in the survey. The number of companies targeted provides an indication of the total number of startups with a connection to the ten participating universities.

Based on the total number of businesses and the information provided, the overall economic impact for 2019 can be estimated at 62,600 employees and a combined turnover of 8.43 billion euros.

This combined turnover equates to more than four times the state funding for Berlin universities: In 2019 the allocation for universities in the Berlin budget was approximately 1.9 billion euros. These figures clearly demonstrate the impact science has on the economy of the region.

Berlin’s governing mayor and senator for science and research Michael Müller reinforces the message: “Every euro invested in science and research benefits the whole of Berlin. Our universities have become true mines of ideas where creative thinkers from all over the world gather. They create an environment of innovation, resulting in numerous startups and a powerful knock-on effect for established businesses. This is important for creating new jobs and a sustainable economic growth in our city.”

“Universities play an important part in Berlin’s role as a startup capital. With the support of the state of Berlin and the federal government, universities have been increasingly involved in helping startups over the past fifteen years. The impact their efforts have had is clearly evident in the data provided by the 2020 Startup Survey: The support for startups provided by universities has an innovative and sustainable impact on the Berlin region,” said Ramona Pop, senator for economics, energy and public enterprises, at a video press conference to present the study on 17 August 2020.

Trending topics of internationalization, sustainability and artificial intelligence

Internationalization

Approximately one quarter of the businesses were made up of international teams at the time they were set up. 29 percent of the surveyed companies achieve most of their turnover in international markets. The main sales markets targeted by the participating companies are the DACH region (64 percent) and Europe (61 percent).

Beyond Europe, the most important regions are North America(30 percent) and Asia(23 percent). The factors identified as contributing to a successful internationalization include adapting to local conditions, good knowledge of markets, developing contacts and a close relationship to customers, using fairs as a marketing tool as well as having a niche product/leading quality product.

Bureaucracy, customs/visa regulations, trade barriers, lack of resources such as capital, time and staff as well as limited knowledge of markets were all identified as factors restricting the process of internationalization.

Sustainability

For the first time, the survey has demonstrated that scientific startups connected to universities believe they contribute significantly to the fulfillment of the Sustainable Development Goals (SDG) of the United Nations. The following SDGs in particular were referred to by the companies: SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), SDG 4 (Quality Education), SDG 3 (Good Health and Well-Being) as well as SDG 12 (Responsible Consumption and Production).

According to the Sustainable Development Goals Report 2019, Germany still has some way to go in the areas of Industry, Innovation and Infrastructure, and Sustainable Consumption and Production if it is to achieve the goals in 2030. In addition, economic, social and ecological aspects play a major role for the majority of the management of the companies surveyed.

92 percent of the companies stated that economic aspects are significant (important, very important), followed by social aspects at 79 percent. Although still regarded as important by the majority of companies, ecological aspects are slightly less relevant at 67 percent. Social and ecological sustainability are most important for new businesses (founded within the last three years).

Artificial intelligence

15 percent of the surveyed companies work in the area of AI. Their main areas of activity are business intelligence/process management, health intelligence and mobility. Aspects reported as important during the initial phase for AI startups are network contacts, capital (e.g. for cloud access and online computing power), coaching, mentoring, know-how and training, as well as access to data sources.

Trending topics of financing and support

Funding and support

23 percent of the surveyed companies stated that they had made use of venture capital. On average, they had received venture capital amounting to between 250,000 and 2 million euros. This funding was primarily provided by business angels and other private investors as well as independent venture capital businesses.

49 percent of the participating startups received helpful support from a university when setting up their business. 41 percent answered that they had been given funding to set up their business. Regarding funding, particular mention was made of the Federal Ministry for Economic Affairs and Energy’s EXIST startup grant, as well as programs offered by the Berlin Brandenburg Investionsbank, the Berliner Startup Stipendium of the state of Berlin /European Social Fund and the Agentur für Arbeit.

 

Support provided at universities

The importance of university incubators

The results of the survey make clear the role played by the university incubators: 72 percent of the businesses have been set up in the past decade, with 35 percent established since 2017. Over the past 15 years, the universities have increased their commitment to a startup culture and have helped different types of startups set up business.

Those businesses set up within the last ten years placed great value on the support provided by the universities: 96 percent stated that the funding programs they used were either “very important” or “important” for their startups. 87 percent answered that the possibility to use rooms, labs and prototype workshops was very important in setting up their businesses. And some 86 percent reported that the support they received in finding ongoing financing was relevant. 70 percent of the businesses continue to have contact to or work together with their alma mater. 76 percent of the businesses surveyed would like to share their experiences with the next generation of startup entrepreneurs, for example in the form of mentoring, support with developing a business model or as an investor.

The survey: 10 universities, 750 businesses

This is the third time that the activities of startups connected to a total of ten universities have been systematically and uniformly surveyed as part of a cross-university initiative. At the start of 2020, ten universities from Berlin and Brandenburg participated in the survey: Beuth University of Applied Sciences Berlin, University of Applied Sciences Potsdam, Hochschule für Technik und Wirschaft Berlin, Berlin School of Economics and Law, Humboldt-Universität zu Berlin, University of the Arts Berlin, Freie Universität Berlin, University of Potsdam, Hochschule für Schauspielkunst Ernst Busch, and Technische Universität Berlin.

 

A standardized questionnaire was created to obtain and analyze relevant key data concerning startups connected to universities. The data were obtained prior to the outbreak of the coronavirus pandemic and refer to 2019. The collection and analysis of data was coordinated by the Centre for Entrepreneurship at Technische Universität Berlin. The survey was supported by funding from the Senate Department for Economics, Energy and Public Enterprises, Projekt Zukunft and the Chamber of Commerce and Industry Berlin.

Joint media information of Beuth University of Applied Sciences Berlin, University of Applied Sciences Potsdam, Hochschule für Technik und Wirschaft Berlin, Berlin School of Economics and Law, Humboldt-Universität zu Berlin, University of the Arts Berlin, Freie Universität Berlin, University of Potsdam, Hochschule für Schauspielkunst Ernst Busch, and Technische Universität Berlin