Europe has shown to be a leading technology ecosystem in the world. We created a white paper digging into the State of European Technology Report and providing some examples of interesting stakeholders and success cases in each of the national / regional ecosystems.Continue reading
We collaborated with the Free University of Bolzano (Italy) on a research paper regarding Innovation Ecosystems and their critical traits and fundamental dynamics, analyzing well-known ecosystems like the research triangle in Europe or Silicon Valley in USA.Continue reading
In 2015 I had the unique chance to visit Slovenia (for the first time), we were invited by ABC Accelerator in Ljubljana, and tell the story about the startup ecosystem there.Continue reading
Learn more about StartupHighway and their accelerator program in Vilnius, LithuaniaContinue reading
I was born in Venezuela from an Italian father and Portuguese mother and my parents moved back to Europe and Italy, when I was 4 years old. I was grown in a town called Bolzano, in the region of South Tyrol, an autonomous region in Italy with the particularity of being bilingual (Italian and German speaking) and being one of the top 10 wealthiest regions in Europe (by GDP per capita). The region is internationally well known for being a tourist hotspot and for its apple agriculture (the biggest producer in Europe) and grape/wine production (white wines excel in the Italian rankings and we all know, how good Italian wines are).
NB: The featured picture is my hometown Bolzano (Italy)
The Region has some international business leaders, like Leitner Group (one of the duopolists in the ropeway and winter technology business), Technoalpin (50% market share in the artificial snowmaking technology) and Dr. Schär (one of the fastest growing companies in the production of gluten-free products, with very strong markets in Europe and the US) just to name a few.
Because of its high wealth and very low unemployment rate the entrepreneurial activity (both tech or tech-enabled) is lacking behind compared to other regions in Italy and Europe. Also regarding R&D expenditure South Tyrol is strongly behind compared to the neighbor regions. In 2011, the total R&D expenditure was 0.63% of GDP, approximately half of the national average (1.25%) and one quarter of the EU average (2.10%).
By taking the value chain approach of Gibbons – Saxenian – Hinoul to analyze the local entrepreneurial eco-system, I tried to identify interesting insights, strong points and missing pieces of the local ecosystem:
- There is the Free university of Bolzano/Bozen, a pretty young university (roughly 20 years old, maybe 10 years fully operational with all programs) with around 3.500 students enrolled and 10 Master programs and 3 PhDs. In general there are only roughly 500.000 inhabitants living in the region, which limits its overall pool of human resources.
- Biggest challenge: Focusing the programs on core competences of the region, in order to attract and keep international talent (and therefore knowledge) in the region.
- Status: 6 out of 10
- Trend: Bullish
Entrepreneurs & Role Models
- There are plenty of international leading companies, but in my opinion they are still not acting as strong role models to the entrepreneurs in the region. Graduates and researchers find it more attractive to work for international players in the nearby Swiss, Northern Italian and Southern German companies.
- Biggest challenge: How to connect talent with entrepreneurs, in order to create more entrepreneurs and keep IP and knowledge in the region? FFA is structuring an acceleration program with focus on the core competences of the region, in order to provide an effective way to empower entrepreneurs.
- Status: 7 out of 10
- Trend: Strongly bullish with the right incentives
- South Tyrol doesn’t lack money, neither private nor governmental funds, having the highest GDP pro capita in Italy and being on the top of Europeans GDP pro capita regions. One of the biggest problems is the lack of experience in innovation and entrepreneurial financing by both on the private and governmental side.
- Biggest challenge: Get stakeholders to start looking in focused entrepreneurial finance tools, like seed funding, startup investment tax incentives, soft-landing platforms, acceleration programs
- Status: 6 out of 10
- Trend: Strongly bullish because of huge potential
- Italy is generally lacking a modern capital markets structure, with SMEs’ balance sheets being dominated by debt financing and with very little influence of equity capital markets (Private Equity Investments and Venture Capital). South Tyrol completely lacks both an informal and formal Venture Capital structure. The negative spiral started, when the few Business Angels took a hit during and after the last dot com bubble burst in 2000. The region was and is also presently very much relying on debt financing from wealthy local and regional banks.
- Biggest challenge: Bringing the culture of equity investments into the region, not only related to entrepreneurial finance, but also for later stage funding like private equity investments.
- Status: 4 out of 10
- Trend: Neutral (one of the toughest challenges in the region)
- Regarding IT-infrastructure: There is barely high-speed internet (only main city has some optical fiber connection). The local government is pushing investments in the region, but overall development takes a long time, while the digital and internet trends move and change very quickly.
- Regarding logistic infrastructure: The region is very poorly connected to international hubs, because of the lack of high-speed trains to main cities in Germany, Austria and Italy and the lack of a functioning regional airport hub.
- Biggest challenge: Developing both a sound IT-infrastructure and tackling the poor connection to international hubs is vital for the further development of the region.
- Status: 4 out of 10
- Trend: Neutral, because of slow decision making of the stakeholders around these projects.
- The Cluster Policy could be a very strong point in favor of the region, since it can create and apply local laws and policies (for example regarding innovation, or export support) that can suit the environment. Still, the lack in policymaking experience on innovation, R&D and entrepreneurial finance make it difficult to deploy strong incentives to the local ecosystem.
- Biggest challenge: Ability of the local government in deploying policies that combine international best practices with the local needs and competitive advantages.
- Status: 7 out of 10
- Trend: Bullish
Presence of International Companies
- There are a number of international companies that have been founded in the region and have international operations, but there are very few global blue chip offices in the region. This is one of the most critical points, when it comes to retain talent in the region and become a long-term magnet, since leave to accept high-paid jobs in Germany, Switzerland and the main cities in Italy (like Milan).
- Biggest challenge: Bringing companies to establish an office in the region or establishing strong entrepreneurial base.
- Status: 5 out of 10
- Trend: Neutral/Bearish, will be difficult with missing infrastructures and lack of strong soft-landing policies.
- The local innovation center TIS innovation park has the goal to support local companies, entrepreneurs and innovation stakeholders to connect with the needed networks, resources and people. Unfortunately the lack of talents in the region has a similar impact on the operations of local agencies and innovation centers as for the entrepreneurial scene, limiting their overall potential.
- Biggest challenge: Attracting talent with international experiences and networks to help develop the local eco-system.
- Status: 6 out of 10
- Trend: Bullish, if the problems around the diaspora and talent attraction are tackled.
- One of the biggest advantages of the region is the local government that can create local laws and policies that can fit the local ecosystem. The government has a very high budget (compared to other regions in Europe), given by the high pro capita GDP and once political consensus is found, could enable strong investments in the strategic areas such as innovation and R&D. Furthermore there has been political stability in the last decades, which could help to create long-term programs, policies and incentive schemes.
- Biggest challenge: Helping government to accept the power of entrepreneurship, entrepreneurial finance and generally pushing certain industrial policies and structural reforms.
- Status: 8 out of 10
- Trend: Strongly bullish
Quality of Life
- Very high quality of life, one of the strongest levers of the region! Just see it yourself here!
- Biggest challenge: None
- Status: 10 out of 10
- Trend: Neutral and stable.
Overall the biggest points given by the region can be wrapped up in three main topics:
1) Attract corporations and establish entrepreneurial activities around the core competences of the region.
2) Roll-out the structural changes in logistics, finance and IT/services.
3) Attract and retain talent directing them to entrepreneurial activities and qualified international job positions and at the same time leveraging top quality of life, which the region offers.
FFA will try to tackle a few points around entrepreneurial finance, by providing know-how and our management team and present an acceleration program around the core competences of the region, involving all stakeholders in the economy, from government and entrepreneurs, to the international companies and universities. We will also use the help of the network provided during the Startup Generation program (like Brad Feld, which is one of the major experts around startup communities and the building of entrepreneurship ecosystems).
There are three project two witness our activities in the area and try to enable the entrepreneurial and innovation eco-system in the region:
- Idea!tailors – Framework to spark x-functional and x-cultural tech entrepreneurship (http://ideatailors.strikingly.com/)
- Innovation Südtirol – Alto Adige – Supporting the development and adoption of innovation related tools and services in South Tyrol (http://innovazione-altoadige.com)
- Research work at the Free University of Bolzano regarding innovation support in local eco-systems in Europe.
written by Frank M. Saviane (CEO)