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Digital founders settle in collaborative ecosystems

Silicon Valley draws innovative digital startups like moths to a flame. Politics are watching with a wary eye, but the supporting frameworks currently in action do not reach the founders anymore. How can the newly incepted middle sector be tied down?

13 Jan. 2017
SCALE11 founder
SCALE11 allows for networking between startups, investors and established companies. (Photo: Deutsche Messe AG)

Cloud services and collaboration serve to detach work from specific locations. But among ITK founders in particular, who use these tools to develop new business models, a clear tendency for geographic clustering can be detected: A startup that does not move straight to Silicon Valley will at the very least relocate to London or Berlin. The Institute for the Analysis of Small and Medium-sized Enterprises (Institut for Mittelstandsforschung, IfM) therefore suggests a change of policy concerning subsidies that is intended to have more reach.

Other voices are also urging founders not to follow the lure of Silicon Valley. "I think many startups would enjoy better odds of success by resisting its gravitational pull", Reggie Bradford, Senior Vice President of Product Development at Oracle, recently told Forbes online . "I see great companies on the rise in London, Tel Aviv, and São Paolo, not to mention my old stomping grounds in Atlanta, where companies like MailChimp are going strong."

The location issue is important for Germany not least because according to the international comparison in the European Startup Monitor 2016 , it can boast the largest rate of founders that are natives to the country (92%); with the focus in Germany being on IT and software development. But the traditional SME policies, which are focused mainly on individual support and consulting, do not reach these startups anymore. According to the IfM the federal states, which act locally and could create framing conditions that retain newly-founded enterprises, are now called upon. Among other things, the IfM calls for networking, exchange, cooperation as well as regional knowledge and know-how platforms, and is thus in line with the CeBIT, which for 2017 is again expanding its startup hall SCALE11 , introducing a co-working space and bringing the “culture of failure” to Hannover through the Fuckup Nights. SCALE11 allows for networking between startups, investors and established companies, though judging by past experience, this usually takes place on the periphery, away from the official program. About 400 digitally-focused startups from 40 nations will be represented there in 2017.