A sector report about Germany's industrial heartland North Rhine-Westphalia

The industrial revolution transformed Germany in the late 18^th century from a predominately agrarian society into the economic powerhouse in Europe. The seed for this rapid metamorphosis was planted in the coal rich regions of the Ruhr and Rhine, modern North Rhine-Westphalia. Till this day, the landscape of NRW is dominated by its industrial history. Facing ever stiffer competition globally as well as further challenges, NRW is determined to revolutionize and vitalize its industry, actively placing itself at the forefront of technological innovation for industrial solutions.

Facts & Figures

Today, with its nearly 18 million inhabitants, nearly one in five people of workforce, roughly 1.2 million people, in NRW is currently working in the industrial sector, mainly as mechanical engineers. In 2020, the industry generated roughly 320 billion euros in sales alone. That is 18% of Germany’s industrial sales concentrated solely in one single state. Furthermore, with its 710,000 SMEs, the German “Mittelstand” is still the backbone of the region’s economic force, contributing to more than 20% of Germany’s GDP. In addition, one in four market champions or hidden champion is at home in NRW, which further underscores the state’s economic strength.

But besides the classical industry actors and fields, NRW is also home to innovation which is greatly appreciated by the local industry. For instance, already 25,000 ICT companies have settled in NRW, generating nearly a third of all ICT generated revenue in Germany, totaling over 103 billion euros. Going even beyond that, NRW has already attracted 20% of all startups active in Germany, supplying even more radical innovation to the local industry, allowing local businesses to fully harness the practical insights and modernizations associated with the startup scene.

 One example of such radical innovation is the nano-technology sector. Already 22% of Germany’s nanotech firms have set-up a business in NRW as well as 28% of all microsystems and technology companies.

Pioneering Germany's Industry 4.0

NRW is offering immense opportunities for any company and startup that is seeking to contribute to innovative industrial solutions and making the fourth industrial revolution not only a reality but also a success story. Being the industrial core of the continent and Germany, NRW is home to a truly broad industrial customer base from chemistry to machine manufacturing to electronics and electrotechnology, NRW has it all. Hence, there will be a niche for everyone to drive forward and build up owns company. Going even beyond the potential German industrial customer base in NRW, the state also offers quick access to over 160 million people in 500km radius, possessing roughly 3.5 billion euros in purchasing power.

In addition to its industrial advantages, NRW has plenty more to offer such as its leading research and education institutions. The former provide the perfect fertile ground for young and innovative companies to test and further improve their ideas, benefiting from the exchange between academic insights and practical needs and applications. These research institutions include, above all, the Fraunhofer Institutes such as Fraunhofer FIT or the Centrum Industrial IT (CIIT e. V.). Currently, there are over 780,000 students in NRW, studying at one of the 68 universities in the region such as the TU Dortmund, Ruhr University of Bochum or the RWTH Aachen. Roughly 27% of these students are attending classes and programs at technical colleges, guaranteeing a talented and well-educated workforce. Thus, it is little to no surprise that NRW is already leading in language modes research and quantum machine learning. Going even further, NRW is soon to be the home to Europe’s fastest computer, based on exascale computing, enabling faster and more accurate processing and numerous applications for forecasting models.

Pushing and facilitating the transformation of its industry and cities in the digital age, NRW is keen on rolling out flagships and other initiatives to foster innovation. One player in the region that is dedicated to harnessing the advancement of artificial intelligence is KI.NRW. Working together with local stakeholders from politics to civil society, companies, and academia, KI.NRW is actively applying AI. One such program is the application of AI to hospitals or mobility, transforming not only the industries, but also creating smart cities.

Ecosystem Industrial Solutions

Another prime example of the great ecosystem are the co-operations between businesses and research in the state is the technology network “it’s OWL” (focusing on the region of Ostwestfalen-Lippe). Founded by government support as a technology network in 2012, “it’s OWL” has realized over 47 projects worth 100 million euros already and is currently planning to double the funding to 200 million euros over the next rounds of projects. One flagship project is the building of a smart factory with the Fraunhofer IOSB-INA, allowing for the testing of automatization and digital applications to the production processes. In its next round of projects, the “it’s OWL” is dedicated to further explore the potential for AI in optimizing and enhancing industrial manufacturing. These factors have greatly contributed to settling advanced industries and innovators in NRW. Furthermore, Dortmund, one of the urban centers of NRW, has been transformed to Europe’s biggest micro-tech cluster, employing over 2,200 employees among 40 companies in the industrial sector.

Trusted Partners

For any company, but especially for international ones seeking to expand or settle in new markets, reliable partners are key. Luckily, NRW provides such networks of great partners, sharing their access, resources, and insights with their respective networks. In the area of funding, NRW’s most trusted source of finance is the NRW.BANK, providing low-interest loans to both startups and SMEs north of 10 million euros as well as seeding capital for young founders. One dedicated program by the NRW.BANK is the “NRW.BANK.Digitalisierung und Innovation” program. As previously mentioned, one key partner is the “it’s OWL” in the industrial solutions sector, raising their funding capacity up to 200 million euros for future projects. Another source of funding, although at a smaller rate offers the “regional economic promotion” programs (RWP) in NRW, seeking to vitalize urban economies by allocating cash grants to businesses. Other partners are also participating in the Start.up! Germany Tour such as NRW.Global Business, the federal investment agency of the state. Or the Institute for Digital Future Technologies e.V., seeking to raise awareness and provide key access to an extensive network of potential customers and partners in NRW. And last but most certainly not least, there is the network of local chambers of industry and commerce (IHK) in Germany. The chambers, such as the ones organizing and participating in the tour are vital business partners in Germany, offering a wide array of services and advice for their local businesses, reaching even to the political centers in Berlin and Brussels.

If you want to hear more about this excting sector feel free to rewatch our corresponding webinar here:

A sector report about the infrastructure of sustainable technologies in North Rhine-Westphalia

The industrialization introduced radical change to the world, its people and to the economy, mostly at the expense of the environment. Germany is no exception to this rule. However, the country is determined to embark on the transition to carbon neutrality till 2045, signaling that economic progress does not have to be at the environments expense. North Rhine-Westphalia, the cradle of Germany’s industrialization is vital to this process. Having greatly benefitted from its natural riches of coal and steel production, NRW has been the engine of Germany’s industrial progress and forms till this day Germany’s industrial core. Confronting its industrial heritage, NRW seeks innovative solutions in greening its economy while maintaining its prosperity.

Facts & Figures

Building on its industrial history, NRW’s local economy is the 6^th largest in Europe and even the 18^th in the world, making it an economic powerhouse. Already today, the green tech sector contributes 6% to the gross value added in NRW, adding value north of 35 billion euros. Similarly, the sector has steadily grown by 1,9% annually since 2009, employing 468,000 people, predominantly in the service, construction and manufacturing sector. Further, one third of its revenue is generated through exports, indicating rising demand for greening services among NRW’s neighbors. Additionally, with the ongoing pressure to shift away from energy generated by fossil fuels, the domestic industry, consuming nearly 30% of Germany’s energy, is looking for alternative, green and innovative solutions, reducing the consumption of fossils while gaining efficiency as well as green sources such as hydrogen. Hence, to meet the current demand of 104TWh annually and 42TWh from its industry alone, the government of NRW has launched its own variant of a hydrogen roadmap, aiming to foster a domestic hydrogen market.

Greening Germany's industrial core - NRW

In addition to an immense potential of serving to a broad variety of industrial customers, NRW also offers some of the leading institutions in scientific research and education the country, such as the Wuppertal Institute or the Fraunhofer institutes Umsicht and IAIS. Similarly, in education, nearly 800,000 students are currently learning and researching in NRW. 40% of which are coming from the MINT-fields, promising a rich pool of talent for the green tech sector. Furthermore, NRW hosts more than 30 courses and programs that are directly targeting green tech. Leading education facilities are the TU Dortmund, the RWTH Aachen or the Ruhr Universität Bochum. Next to the supply with leading talents, the research and education institutions in the state are also open to foster common exchange and projects with the companies, enabling the transfer and application of newest insights from the scientific frontier to the practical needs of the companies.

Finally, being aware of the great challenges in transitioning the local economy to carbon neutrality and energy efficiency, the central as well as local government is actively supporting the settlement of innovative green tech companies in the region. For instance, there is the previously mentioned initiative to create a domestic production and industry of hydrogen, being supported by the Package for the future, allocating over 7 billion eurps in building up this market as well as 2 billion euros to foster international partnerships to meet the increasing demand and compensate for the lack of domestic supply. Besides the hydrogen roadmap, the public sector is also keen in supporting the construction sector in becoming greener and more energy efficient by launching new building projects for commercial properties, harnessing the innovative solutions and material provided by the green tech sector.

Ecosystem Green Tech

Due to its many advantages, NRW is home to a perfect ecosystem for green tech companies in Germany. The region is already home to many networks, clusters and accelerators, such as Kompetenznetzwerk Umweltwirtschaft NRW (Network for Competence and environmental economy), NRW.Energy4Climate and Circular Valley. The latter is cooperating with over 35 startups already on the globe to raise international awareness for green tech and to combat climate change at an international stage. Further, as already mentioned, NRW houses excellent research institutes as the Fraunhofer Institutes or the Jülich Research Center, producing key insights and vital progress for startups and entrepreneurs to tackle challenges and develop their ideas. Some of this has already led to innovative and groundbreaking projects and programs in NRW. For instance, dedicating themselves to the implementation and development of digital and artificial intelligence as source of green tech solutions, there is the Competence platform AI in NRW, KI.NRW.

Trusted Partners for the transformation

In order to successfully facilitate the growing market for green tech and to support the young innovators, NRW provides many great partners and their respective programs to realize the potential of green tech. One key component of this is of course funding. The latter can be achieved either by private or public investors. For both of which ZENIT is providing the suitable network and advice. Another source is the NRW.BANK, offering low interest loans for up to 10 million euros over 5 years via its NRW.BANK.Gründung und Wachstum or the NRW.BANK:Elektromobilität programs. For additional networking in the region, there are many great initiatives such as NRW.Energy4Climate or Greentech.Ruhr, fostering lasting links and cooperation among businesses, test labs and funding opportunities. Another vital partner is the region and across Germany are the local chambers of industry and commerce (IHK), offering strong advice and assistance to all companies in their respective district. Advising on crucial business issues and regulatory affairs, the IHKs are well suited to assist in any situation and to guide businesses in the region.

If you want to hear more about this excting sector feel free to rewatch our corresponding webinar here:

A sector report about Germany's logistics hotspot North Rhine-Westphalia

Although it is a well-known fact that all roads lead to Rome, it is little known that most of them will eventually passing through North Rhine Westphalia (NRW). As the most populous state in Germany, sharing borders with France, Belgium and the Netherlands and a booming economy, NRW is truly the beating heart of Europe. Located in the center of Europe and equipped with an outstanding infrastructure network, NRW is the prime location to serve a wide range of customers and businesses across the continent. Due to these factors, already 19 out of the 50 top-selling companies are located within the state as well as 9 of the 25 leading logistics firms such as DHL, UPS and FedEx. Hence, making NRW a booming and vital target for the logistics & mobility sector.

Facts & Figures

As already mentioned, NRW with its 17.7 million inhabitants is most populous state in Germany, but also more densely populated than Japan our its direct neighbor, The Netherlands. Besides its respective amount of potential local costumers, with private consumption totaling 383 billion euros, NRW offers access to 160 million potential customers within a 500 kilometers radius equivalent of nearly a third of all European customers. In addition, all mayor metropolitan areas and cities are in reach of a three-hour flight, providing ample opportunities to expand operations within Germany and across Europe. Moreover, generating an overall trading volume north of 400 billion euros, NRW is an undisputed economic powerhouse offering plenty opportunities in the B2B sector. Besides the heavyweights among the logistics companies such as Amazon, Deutsche Post, 3M, FedEx or Zalando, NRW is home to 24,000 logistics companies, a quarter of all logistics companies in Germany, employing over 388,000 people and generating 72,7 billion euros revenues in 2017. However, due to its rich industrial history, many industrial, manufacturing and chemical companies operate their own logistics, contributing to 773,000 employees total in the logistics and mobility sector. Thus, logistics remains a key contributor and essential sector to NRW’s economy, employing roughly 10% of the workforce. With growing demand and new opportunities, the logistics and mobility sector are also crucial drivers in new projects, taking advantage of the industrial and commercial spaces in NRW. Despite the negative impacts inflicted by the global pandemic, 50 new projects have launched in the region, expanding existing as well as constructing new logistic hubs on 1 million m² land with firms in the e-commerce sector such as Picnic leading the charge.

Moreover, the region offers a highly sophisticated infrastructure network of 29,500 kilometers roads, 2,200 kilometers of which are highways serving 57,000 vehicles daily, as well as over 6,000 kilometers rails, creating not only reliable links with the urban hubs of the region, but alterative access to the ports such as the Betuwe freight rail to Rotterdam. Going even beyond Europe, NRW’s capital Dusseldorf as well as the City of Duisburg are key locations among the Belt and Road Initiative by China, bridging the vast distance between Asia and Germany with 35 cargo trains carrying over 100,000 containers from Chengdu and Chongqing into the heart of Europe and vis versa. Besides the impressive rail, road and canal system, NRW also offers six airports, two international and four intra-European ones, enabling companies to reach all mayor cities in Europe and establish or intensify links to all important markets in Europe.

In addition to its natural advantages and impressive infrastructure network, NRW also offers great spaces for the logistics and mobility sector, providing over 205 hectares of available space for new commercial zones. Further, the government and ministries in NRW are key partners in these projects, actively supporting new and existing businesses. For instance, the state was instrumental in realizing the newPark projects on Datteln, Waltrop and Gelsenkirchen, as well as commercial parks and zones targeting smaller and medium sized companies in the Rhine-Ruhr region.

Next to the space, NRW offers great scientific and research institutions, fostering innovation and a highly qualified talent pool in the region. For instance, the universities RWTH Aachen, TU Dortmund, Neuss University of Applied Sciences, universities of Duisburg-Essen, TU Cologne are training their students in various areas of logistics. Moreover, besides guaranteeing a steady supply of well-trained talents in the region, many of these institutions have launched their own logistic research facilities in cooperation with companies, aiming to revolutionize the logistics and mobility sector. One of such research institutions is the Effizienz Cluster Logistik Ruhr, funded by the state as well as business collaborations, the goal of the Cluster is the successful development and implementation of automatization and robotics to logistics, harnessing the advantages of the industry 4.0. Another great project, supporting businesses in the sector is SE Silicon Economy and the Open Logistic Foundation, introducing the concepts of the platform economy to logistics and mobility, mainly applied in the B2B aspects, all in on an open-source software, allowing both large and small companies to harness the advantages.

Ecoystem Logistics & Mobility

Based on the above-mentioned advantages, NRW is home to a fantastic ecosystem in the logistics and mobility sector for both established companies seeking to innovate themselves as well as startups seeking to revolutionize and disrupt the sector with novel ideas and approaches. Next to the before-mentioned research institutions and flagships such as SE Silicon Economy or Leistungszentrum Logistik und IT, there are many more key players and opportunities in the ecosystem. For instance, one the crucial drivers in the sector, serving as competence centers are the Fraunhofer institutes, such as Fraunhofer IML, Fraunhofer ISST, realizing projects, such as fully automated warehouses, replacing the traditional conveyor belts with decentral controlled robots. Targeting startups there are many great support opportunities such as the Exzellenz Start-up Centers NRW, facilitating the transfer from theoretical and academic insights to the business reality. The centers are being currently funded with 116 million euros to support young entrepreneurs setting up their startups in the region. Another one is the start2grow initiative in NRW and Dortmund, providing active support and funding, as well as networking and awards for young startups.

startport - Acceleration support at its best

For more established companies, there are further opportunities to access the immense pool of talent, expertise and innovation generated in the field. Tailored to SME’s there are the project Digital in NRW: Kompetenz für den Mittelstand, Mittelstand Digital Zentrum Ruhr-OWL, Start-In Factory Dortmund or the TU Concept GmbH. All of these are seeking to assist SMEs in the current challenges of increasing digitalization and transformations in the industry. To do so, all of them are providing tested insights from previous cooperation projects as well as setting up networks for companies to exchange best practices and learn from each other. For even larger companies, there is also an abundance of potential enterprise labs, offering breakthroughs and practical applications from scientific research. Again, a key player in this field is the Fraunhofer institute, cooperating with for instance the Dachser-Network to create Dachser Enterprise Lab, applying AI to the needs of the companies.  Similarly, the DB Schenker Enterprise Lab, in cooperation with Fraunhofer, is aiming to revolutionize the logistics industry, generating insights on the applicability of research to practice. Ultimately, striving to develop the next generation of logistic products and business models.

Reliable Partners for the Future

In addition to the significant advantages and friendly ecosystem, NRW prides itself to not only having the best conditions for young innovators and entrepreneurs in the logistics and mobility sector, but also some of the greatest networks and partners such as the mentioned startport. From the government and public sector side, there are the Ministry for Economic Affairs, Industry, Climate Action and Energy, as well as the local Chambers of Commerce and Industry that are partnering up to bring together the greatest minds through initiatives such as the Start.up! Germany Tour.

In addition to partnering up with many other players and networks, the state also offers small grants in support for startups. Another public sector partner is the NRW.BANK, providing multiple programs for companies to gain access to capital. For instance, the NRW.SeedCap offers an additional capital with 100,000 euros in the first round as well as potentially an additional 100,000 euros in the second round of capital raising. Targeting SMEs, the bank also launched the program, NRW.Venture, offering to acquire shares worth of 10 million euros for young and dynamic companies.

Another potential partner, specifically for companies and young firms in the logistics sector, is the “e-port Dortmund” - the Center of Foundation and Competence for logistics and IT. E-port Dortmund offers support in settling new companies and startups in Dortmund with direct access to the canal port. They offer renting spaces, networking opportunities and events such as the 3^rd Wednesday of each month, each quarter. In addition to their support, the center also hosts a tailored award for small startups in Dortmund, the “Innovative Logistik Award”, promising free rent for one year and further exposure in the local startup scene.

Similarly, NRW.Global Business is actively supporting the businesses and region of NRW, seeking to raise awareness and investments into the local economy. In doing so, NRW.Global Business helps companies, also from abroad, to settle here in NRW, entering the market as well as expanding access to new and dynamic growth ones. Having already attracted more than 20,000 international companies to Europe’s beating heart, NRW.Gobal Business has a proven track record and is a reliable partner, assisting every company to invest into NRW or gain access and harness the advantages of its vast network.

If you want to hear more about this excting sector feel free to rewatch our corresponding webinar here:

Dominik Stute and Nick Neidl, both one of the main organizers of the Start.up! Germany Tour have been invited to the podcast series „Memberbytes” by the Malaysian-German Chamber of Commerce (AHK Malaysia) to talk about the Rhine-Ruhr Area and the Start.up! Germany Tour.

The podcast series of the Malaysian-German Chamber of Commerce usually features interviews with business people about Malaysia, Germany and the business in Asia.

In episode 17, Sebastian Kirsch, Manager Member Support by AHK Malaysia talked with Dominik Stute and Nick Neidl about the industrial heartland of Germany – the Rhine-Ruhr region – and furthermore about the Start.up! Germany Tour, which brings international startups from around the world to North Rhine-Westphalia, Germany and show them the benefits of this driving location.

But best listen for yourself.

Here: https://themgccpodcast.buzzsprout.com/723699/10758345-memberbytes-017-dominik-stute-nick-neidl-startup-germany-tour-ihk-dortmund or just click on the “Spotify” button on the left hand corner.

Startup MedApp from Krakow to North Rhine-Westphalia

MedApp S.A. a Polish medtech startup that was founded in Krakow, Poland is now expanding its business to Dusseldorf, North Rhine-Westphalia and from there to the DACH region. As a former startup participant of our Start.up! Germany Tour 2021, MedApp took part in the several program parts of the Start.up! Germany Tour like the pre-program, the Inter.national! Startup Contest and has been among the 15 finalists of the Grand Final of the Start.up! Germany Tour 2021 during the main program.

With this impulse through the tour and the intensive further support of our partner organization NRW.Global Business, MedApp has established a German subsidiary in Dusseldorf. Together with the CEO of MedApp S.A. Krzysztof Mędrala, we talked about its Start.up! Germany Tour experience and about its settlement to NRW.

Dear Krzysztof, tell us about your Start.up! Germany Tour (SUGT) experience?

Hello everybody! At the Start.up! Germany Tour’s Grand Final we as MedApp experienced a fantastic atmosphere with lots of excellent organized meetings afterwards. The overall international environment of SUGT was inspiring and without doubt a worth attending experience.

Why did you participate in SUGT? What have been your goals? Why Germany?

As the selected startup from Poland, we have been invited to take part in the on-site experience of SUGT. This was a true award for us, especially as the German market is a natural place of geographical expansion for us.

How did it go after the SUGT experience with MedApp? And a settlement?

The strategy entering the German market has been on our mind for some time already. The attendance of meetings with certain people and institutions afterwards finally motivated us to set up a company, MedApp Germany in Dusseldorf, and to search for first local employees.

What was the idea of an employment in North Rhine-Westphalia, Germany for the MedApp?

Our international business plan includes offering our innovative technologies in the DACH region (Germany, Austria, Switzerland) and our new Dusseldorf office would serve as a crucial point for the region. When we see the commitment of the Start.up! Germany Tour community, we believe this was the right decision to set up a company in Germany. Far-reaching growth prospects for our technologies in Germany are ahead of us!

Based on your experience, what can you recommend to other startups that want to do business in Germany?

It is worth attending local events and meetings to better understand the market and its opportunities. Finding partners and local business leaders would play a key role to enter the German business ecosystem which should facilitate business growth. I would play a key role to enter the German business ecosystem, which should facilitate business growth. I would also propose to search for national organizations that support expansion abroad like NRW.Global Business or the Chambers of Industry and Commerce.

In todays interview we are welcoming Mr. Bruno Vath Zarpellon from AHK Brazil in. He is director of the Innovation and Sustainability Department in São Paulo and shares with us his thoughts about the winning startup from Brazil, Pix Force and the potential of the Brazilian startup ecosystem.

Is the startup Pix Force representative of the Brazilian startup ecosystem?

Absolutely! According to the main startup ranking in Latin America, promoted by 100 Open Startups, in 2018 and 2019, the startup reached the first position in the Computational Vision category. In 2020 and 2021 it led the list of innovative businesses in Artificial Intelligence, proving its expertise in an increasingly competitive market. We are proud to know that Pix Force, a startup created in Brazil by Brazilian entrepreneurs, is succeeding and already has an international presence.

With this success of Pix Force, would you say that the startup scene in Brazil is booming?

Pix Force’s success is proof that the Brazilian startup scene has been booming for some time now. Even during the pandemic (2021), investment in startups tripled, surpassing 8 billion dollars and creating 10 new unicorns. Altogether, Brazil already has more than 20 unicorns. It is worth mentioning that today we have almost 15,000 startups in the country, around 3 times more than we had 5 years ago. Not to forget the 400 agents such as incubators, accelerators and other institutions that promote the startup scene here. Besides the city of São Paulo, the main hub for Brazilian startups, other cities also have strong startup communities, such as Florianópolis and Porto Alegre (both in the southern region) and Belo Horizonte (in the southeast).

What conditions (positive and negative) can startups find in Brazil?

I believe that in Brazil the main difficulties for the development of startups are not very different from the difficulties faced in other countries. Among them we can mention the high and complex tax burden, the bureaucracy for closing companies, the lack of support for entrepreneurs before becoming startups, access to financial resources for startups at certain maturity levels, in addition to the difficulty of accessing new clients and international markets.

Despite the barriers, the Brazilian market has several positive aspects for startups. With around 15,000 startups in the country and more than 20 unicorns, the pandemic did not prove to be an obstacle to market growth in 2021 - which represents its dynamic and the positive impact provided by different facilitating factors, which include: the population and the huge domestic market (the largest in Latin America), the receptivity and growing access to investments (having surpassed South Korea in Venture Capital), and the presence of several sectors in growth and expansion, such as agribusiness, renewable energy, environmental solutions and the health sector. Furthermore, the country also has an increasing development in infrastructure, with an estimated investment increase of 40% over the next 5 years, in addition to its remarkable availability of natural resources. Other than that, more than 80% of the population and all residences in Brazil are connected to the internet, with mobile devices being the most used.

Where are the potentials of the country?

Investors' favorite sectors include insurance and financial services, healthcare, software, logistics and retail. Other sectors such as Cleantech and Biotech have been showing great growth potential due to the characteristics of Brazil and global tendencies. A good example is the Green Hydrogen sector. Although the topic is still quite new and there are still few initiatives in Brazil, the country has 83% of its electricity matrix coming from renewable energies, therefore, occupying the first place among countries in the production of clean energy. This position is mainly due to its geographic and climatic characteristics, which enable the country's potential to become one of the largest producers and exporters of Green Hydrogen globally.

• Legal definition of a startup (e.g.: limit of 16 million reais as annual billing / about 2.700,00 euros)
• Angel investor legal protection
• Possibility of directing innovation incentive resources to startups
• Possibility of applying stock options in employment contracts
• Creation of an experimental regulatory environment (regulatory sandbox)

As for the incentives, today there are several initiatives that encourage entrepreneurship in its most diverse phases. Institutions such as SEBRAE, SENAI, FINEP, BNDES and EMBRAPII offer various types of subsidies via non-refundable resources at the national level, among other forms of incentive.

Regarding the bilateral scope with Germany, there are also interesting opportunities, EMBRAPII (Brazilian Company for Industrial Research and Innovation) and the CORNET German Network formalized in 2019 a partnership that allows small and medium entrepreneurs, including startups, to develop RD&I projects with industrial sectors of member countries participating in the network.

Another example of incentive carried out by the Brazilian government is the Rota 2030 program, which aims to support the strengthening of the automotive value chain, promoting cooperative projects in R&D in ​​Mobility and Logistics.

Would you describe specifically what your role is as an AHK in the ecosystem?

The role of the AHK São Paulo is to promote open innovation between member companies and startups from Brazil and Germany, as well as to promote bilateral cooperation between the two countries.

Last year AHK São Paulo was awarded among TOP 3 Startup Ecosystem in Brazil by the 100 Open Startups Ranking. This means that we are one of the most recognized actors in the Startups ecosystem by the practice of open innovation. Almost 400 startup programs have been screened in this ranking and graded by startups, who must select the institution that cooperated the most with their development. The Ranking 100 Open Startups is the main reference in the local market and the largest ranking in Latin America. We have been recognized at the award since 2019 and over the past few years, several startups that have gone through our Startups Connected program were recognized in the 100 Open Startups Ranking as the most innovative in their sector, including Pix Force.

To make it happen, we promote different activities, such as:

• Startups Connected Program: Founded five years ago, Startups Connected is an acceleration program, where selected companies and startups work on a concrete innovation project, based on a business challenge. We support the execution of these projects, facilitating interaction between the parties and offering agile development methodologies and connection with partners in different areas to obtain effective and measurable results. The challenges, in addition to solve business needs, seek sustainable solutions based on the 17 UN Sustainable Development Goals (SDGs).

• AHK Innovation Day: The purpose of the event is to present the main trends and best practices in a particular sector. After lectures and panels, a matchmaking takes place, holding a series of thematic meetings intending to connect companies and startups, which contributes to the generation of new businesses in a short period of time.

• Immersions in the German Innovation ecosystem: Aiming to contribute to the advancement of innovation in Brazil, we organized delegations to Germany, cradle of the 4th Industrial Revolution, so that Brazilian companies can get to know and understand how renowned German companies such as Bosch, Festo, TRUMPF, among others, have been implementing innovation in their organizations, processes and products.

• Studies (e.g.: Startups 4.0): As an example of study carried out by our chamber, since June 2021 we have been looking for startups operating in Industry 4.0 to carry out research on the profile of entrepreneurs, the context of startups and their relationship with other companies. In the first stage of this study, which was completed last year, we applied a survey to around 90 startups, validated the survey form and methodology, and compiled the preliminary results. From now on, with a 2.0 version of the survey, we are increasing the number of respondents so that we can have a statistical analysis that better represents the national ecosystem, once this project has been developed under the leadership of the Brazilian government.

Can you describe a stereotype of a typical Brazilian founder?

In general, Brazilians are very positive and creative people. We have a saying that tells a lot about the way we work and organize our personal lives: “Brazilians never give up”. Personally, I think many people identify to this saying because, despite challenges, we always come with a way of turning things around – and, of course, these characteristics are reflected a lot in the profile of the entrepreneurs in the country.

What are the connections to Germany?

Since 2008, Brazil has been a strategical partner for Germany and one of the main trading partners in South America. Despite the challenges that cultural and social differences between the two countries may cause, business and R&D connections have grown over the years. Just our AHK alone has been representing German economy in Brazil for the past 105 years. São Paulo is also the main German industrial location outside of Germany.

In your opinion, what makes the German market interesting for Brazilian startups?

Germany can be a perfect place for a soft landing of Brazilian Startups and the entrance for the European market. Entering the European market is a great attraction for Brazilian startups, since it provides access to largely skilled labor, strategic positioning enhancement and expansion of the consumer portfolio. Also, successfully selling to Germany is an important indicator to the business – if a technology can be sold under German sieve, which is very professional and detail-oriented, it means it is ready to be sold anywhere in the world.  Germany is home to one of the most mature markets to disruptive solutions, which comes along with a positive perception for higher value-added products (e.g.:“green” products and solutions, and high technology) – a path in which many Brazilian startups have been going through.

German investment to attract foreign startups is algo impressive. Bavaria alone is investing 1,5 million euros for the construction of a Deep-Tech hub and the project AI+MUNICH is receiving 5,9 millions euros to create and develop and IA alliance in Munich.

What were your reasons for participating in the Start.up Germany Tour?

We saw a great opportunity for our best startups to explore one of the most promising hotspots for startups today and connect with large corporations, multinational companies and representatives of the "German Mittelstand", as well as some of the best startups in the German ecosystem.

Initiatives like this are essential to support the internationalization of Brazilian startups and insert them into a more competitive environment, in which they can increasingly thrive. Germany is globally for its strength in innovation and, when we talk about startups, it couldn't be different: the country is one of the most advanced in Europe when it comes to numbers related to startups. We are proud to be part of the initiative because that is our mission as one of the most important players in the open innovation Brazilian ecosystem.

Today we welcome Angeline Marokoane to our blog series. Angeline is from AHK South Africa and shares with us her insights into the country's very interesting startup ecosystem. Enjoy reading!

Forecasts predict that the expected population growth of working-age people in South Africa will increase. How can this growth be used to increase the frequency of high-potential founders accordingly?

There is a huge opportunity through upskilling the youth, around 37% of the population in 2010, with entrepreneurial and digital skills. This can unlock new businesses and supply existing businesses with complex skills required for the digital economy.

In your opinion, what currently distinguishes many founders? For example, are they particularly risk-averse or do many start up out of necessity?

It is a mixture of both actually, entrepreneurship is a risk as it requires the entrepreneur at minimum to have an income for roughly 3 years. Starting a business does not give any founder such a guarantee. In a country that does not have sufficient early stage funding that can support founders, a large risk on behalf of the founder needs to be taken. Secondly, as a developing country, South Africa faces a lot of developmental problems that are deeply rooted in inequality. So the opportunity to address all these challenges are vast. 

Is the government or the education system already setting a course or incentivizing start-ups? What are your experiences?

Yes- there is a government-owned start-up hub called The Innovation Hub, according to its CEO, Pieter Holl, the South African government is in full support of innovation, especially the disruptive part of innovation, because there needs to be a disrupt to ensure there is no monopoly taking place because there needs to a fair and equal playground. There was a Start-up Act position paper that was released during the SA Innovation Summit 2021 which took place online in September 2021. If SA were to implement a Start-up Act, this legislation would fast-track the development of the start-up sector and spur innovation, which will in turn significantly contribute to the country’s economy. There is also SEDA which is another state funded incubator for early stage businesses. The Technology and Innovation Agency supports early stage ventures as well through funding and incubation. Small government grants have been made available through the Support Programme for Industrial Innovation. The education system still lacks in developing entrepreneurial skills at an early stage.

Would you describe specifically what your role is as an AHK in the ecosystem?

Or role is to facilitate and support business opportunities, synergies and innovative co-operations and joint-ventures between companies from South Africa and Germany and to encourage.

What are the connections to Germany?

The GIZ has been supporting local incubators and accelerators. The Goethe Institute as well through advocacy. We also have our working relationship with the The State Development Agency of the Free State of Thuringia (LEG Thüringen) in Germany which is looking for opportunities in SA for companies from that federal state of Germany, and also for chances to cooperate with suitable companies in South Africa.   Anja Tambusso-Ferraz, our regional representative for the Western and Eastern Cape of the SA-German Chamber of Commerce, and who represents the State Development Agency of the Free State of Thuringia, says there is a lot of potential for cooperation and is currently looking for opportunities to create collaborations. "There [already] are some real good interactions and business ventures developing between SA and Thuringia – for example in the fields of sustainable building concepts, e-mobility, medical equipment and R&D projects in the field of sustainable textiles."

In your opinion, what makes the German market interesting for South African startups?

Germany is at the forefront of innovation and development. It has 10 000 scientists within renowned universities and research institutes like Fraunhofer, Leipnitz Institute which makes information and opportunities more easily available for keen entrepreneurs.

What were your reasons for participating in the Start.up Germany Tour?

Because Germany is at the forefront of innovation and development and funders are eager to invest in new innovation ideas and companies that will be at the forefront of development. For us it is an opportunity to expose our innovative thinkers to this broader world and their success can inspire up and coming entrepreneurs to aspire to reach the top.

As part of the main program of the Start.up! Germany Tour 2021, the talk with representatives of DB Schenker and Gideon Brothers (croatian startup) was about giving insights about their collaboration.

The collaboration between DB Schenker and Gideon Brosthers started in 2018. The global logistics service provider DB Schenker with headquarter in Essen and the Croatian startup Gideon met in the semifinals of the Start.up! Germany Tour.

Since then they have collaborated in several ways. The most imporant incident during their collaboration has been the 31 million dollars Series A investment into the Croatian robotics and AI solutions startup by DB Schenker in June 2021. DB Schneker joins the startup to accelerate the development and commercialization of Gideon's AI & 3D vision-based autonomous mobile robots (AMRs).

During a talk about this collaboration, representatives from DB Schenker, Gideon Brothers and the German-Croatian Chamber of Commerce have been invited to tell this great success story!

Talk guests have been: Mr. Erik Wirsing, Vice President Global Innovation, DB Schenker; Mr. Matija Kopić, CEO, Gideon Brothers and Mrs. Melita Maganić, Member Relations & Start-ups, German-Croatian Chamber of Commerce and Industry

The talk was overall moderated by: Mr. Marc Meckle, Deputy Managing Director International, Chamber of Industry and Commerce Essen, Mülheim.

Let this talk inspire you!

Even after our grand finale of the Startup Germany Tour 2021, we will continue with exciting contributions. Today we have Andrea from Sensoneo on the starting line for you. Sesoneo are one of our most interesting SUTG alumni startups.

Enjoy reading the interview.

Welcome Andrea, can you nevertheless briefly summarize for our readers what your business is?

Surely, our main focus is data-driven waste management. We design, develop and produce HW, SW, and analytical tools to help our customers to cope with the biggest challenges in today’s world of waste management – lack of efficiency and transparency. As an outcome, the Sensoneo solution enables the customers to achieve a 30 % – 63 % reduction of waste collection routes and 97 % accuracy on actual waste production.

What progress has Sensoneo been able to make in the last year?

We have managed to significantly expand our product portfolio and started some of the largest smart waste management deployments in the world - this involves the installation of different monitoring and tracking solutions to accurately trace the actual waste production, optimize the waste collection process, and automatically verify the collection service. In some cases, we have deployed purely SW-powered solutions to pilot dynamic waste collection based on an automated routing engine for specific needs of waste collection vehicles. And last, but not least, we have worked on prototypes that would facilitate "Pay-as-you-sort" models and "Pay-as-you-throw" models for flat houses. 

What are the next steps for you?

We certainly plan to complete our R&D projects to provide our customers with other innovative ways how to make waste management easier and more efficient. We also plan to focus on further business development and onboard new partners who operate in regions to combine our unique technology with their local know-how. 

As mentioned at the beginning, you have already been a tour participant. What were your reasons for participating in the tour back then?

The competition has a high reputation and it gathers dozens of innovators into a single place. We highly appreciate that the event interconnects the start-ups with the relevant audience and also the role of IHK that continuously support this event and promotes it across the start-up community. 

What has the tour effectively brought you?

Very valuable networking, international visibility, and a very useful insights from the German market.   

What makes the German market interesting for you? 

The German market is incredibly large, very mature, and full of opportunities for both streams that we target - B2B & B2G. The regions are quite different from each other, but what the business in Germany values, is innovation, bringing new approaches, and improvement of current processes. And this is exactly what our proposition is about. 

In 2018, the global logistics service provider DB Schenker with headquarter in Essen and the Croatian startup Gideon met in the semifinals of the Start.up! Germany Tour.

Having worked together in different projects since 2018, DB Schenker joins in June 2021 a $31 million Series A investment into the Croatian robotics and AI solutions company to accelerate the development and commercialization of its AI & 3D vision-based autonomous mobile robots (AMRs).

Read here our third part of our success story from the perspective of Mrs. Melita Meganic, Member Relations & Start-ups at the German-Croatian Chamber of Commerce and Industry.

How did AHK Croatia identify Gideon Brothers as a perspective startup for the Tour at the time?

In 2018, we decided to participate at the Start.up! Germany Tour for the 1^st time. We had some experience before with startups in Croatia (organized a startup award of our own) but this time we had to find startups that fit the tour best in terms of sectors they were from (Insurtech, Smart City or Logistics & Mobility), maturity and so on. We organized a contest and asked the biggest player from incubators and other startup institutions to help us promoting it. Applications were coming in, but we also had to keep searching and inviting startups personally, in order to fulfil the specifications of the tour. Anyway, to cut the long story short, around this time I met someone from the startup ecosystem, Dražen Nikolic, who was the director of the Croatian Founders Institute, one of the largest startup incubators in the world, and asked him for help. He gave me some names who he thought would fit in. Luckily, Gideon Brothers was among them.   

Did you immediately realize that this startup would be so successful?

We definitely had a great feeling. When we first contacted them, months before the tour, Gideon was in a phase when they did not want to reveal details of their technology and robot just in this early stage. But the information we received pointed to something extraordinary, disrupting… Their enthusiasm, certainty and vision were quite unique. Shortly after, they won our Croatian Startup Germany Tour contest.

How did you experience getting to know Gideon and DB Schenker back then?

It was the semifinals for the Logistics & Mobility sector in Essen, at DB Schenker. I believe there were 18 startups all together who pitched. What can I tell you? Milan, who pitched for Gideon, did his job perfectly. Gideon won the 1^st prize and – I must mention this - another Croatian startup, ORQA FPV (also super successful now), won second place. We were all excited and happy. Anyway, afterwards we all talked to the guys from DB Schenker and exchanged contacts. I am glad they did not leave it at that. Obviously, the interest was mutual. The rest is history...

Are you still in contact with Gideon and if so, how?

Yes! Gideon won a one-year membership with our Chamber by winning the startup contest back in 2018. And they stayed members to this day. We are so happy about this.

We have built a great relationship in the past three years. One of my favorite moments was when Peter Altmaier, Federal Minister for Economic Affairs and Energy of Germany, visited Zagreb in November 2019.  We were asked to propose some interesting program for him. We suggested that we take him to see the Gideon robots in action and so he did. It was fantastic. 

What is the AHK basically doing to support Croatian startups? How would you define your role in the Croatian startup ecosystem?

Our role is not that big although we are very proud to be listed at the Croatian AI Landscape as one of their first supporters. As in all countries, Croatia has many incubators and accelerators, and they are specialized for startups, so we do not interfere much. Everybody should do what they are best at. Of course, we know our way around, participate a lot at conferences and pitches to stay up to date. When we see a great project or event, we support it. What we mostly do is to help with our connections and networking, no matter whether you are a startup or a big company. That is what we do best and what startups and companies can profit from. For example, we received lately several inquiries from German startups and helped them make their first steps towards companies and Croatian institutions. Although one might think you can get through to anyone by yourself in this globalized world, it doesn’t always work. That is where we come in with our network in Croatia and around the world.