State Government Initiative - The BayernOnline Infrastructure Initiative and Bavaria s Virtual Marketplace

State Government Initiative ” The BayernOnline Infrastructure Initiative and Bavaria's Virtual Marketplace

The Bavarian government recognizes that the potential of the Munich region is not fully utilized. For this reason, it is continually working to improve upon the environment needed for Bavaria's successful transition to a globally competitive information economy while increasing its attractiveness to foreign direct high-tech investment. Since 1994, numerous initiatives have promoted this transition, including BayernOnline and VHB, aimed at building a powerful information infrastructure while at the same time promoting the use of new technologies by society and businesses.

Once an infrastructure was in place and the adoption of new technologies was considered to have reached critical mass, the Bavarian government launched a virtual marketplace in order to accelerate the commercial and private applications of the Internet. Virtual Marketplace Bavaria (VMB) ^[10] was founded based on the belief that the Internet could generate many advantages for businesses, public institutions, and citizens , even though the dynamic and anarchic state of the Internet would make it difficult to attain the maximum leverage of benefit without first creating "law and order" in cyberspace . For this reason, the Bavarian government decided on a comprehensive approach to enabling the e-society and formulated several requirements for its online marketplace:

• VMB will aim to increase the utilization and the acceptance of the Internet among Bavarian citizens. Furthermore, it will aim to enable e-commerce, especially between small- and medium- sized companies in Bavaria's different regions .

• VMB will be useful to everyone from craftsmen to doctors to public servants, and by banks, insurance companies, and retail stores, while equally covering all work and leisure topics connected with daily life in Bavaria. The user will benefit from having a single Internet site to access services from public institutions, and at the same time will have access to well-structured commercial offerings. The offer is to be personalized so that each user may determine the content of the portal to fit his or her specific needs.

• Users will be able to post notices to which businesses in the region shall be able to respond, in an aim to facilitate the matching of supply and demand in the marketplace. The aim is to offer to buyers fast and comfortable price comparisons, while sellers benefit from increased information about their customers, enabling them, for example, to optimize stocks and production.

Instead of building the marketplace on its own, the Bavarian government organized a Europe-wide pitch for its construction in November 1999. By the end of January 2000, 14 valid entries were received. A consortium consisting of Siemens and SAP was finally awarded the grant, and by July 2000 the prototype of the marketplace was presented. Today, the VMB has a decentralized structure, with 20 regional marketplaces being held in place under the roof of the VMB. The Siemens/SAP consortium has the primary role of coordinating these marketplaces in a fashion that even though they remain decentralized, they appear united from the perspective of the user. Regardless of which regional portal the user enters, there will always be seamless access to the structured offer of all marketplaces. The consortium is furthermore responsible for the regional, national, and international marketing of the different marketplaces .

In summary, the market highlights indicate that Munich offers a favorable environment for the emergence of new technologies, such as new media and biotech, based on its strong infrastructure of higher education institutions and research centers, a critical mass of established technology and media- related companies, and a proactive government. Locals frequently claim that Munich's diversity and critical mass are its key success factors. However, the development of this innovation friendly environment did not occur by accident , and certainly not overnight.

Over the past 50 years , Bavaria has managed to transform itself from an agrarian state to one of Europe's leading technology clusters. The greater Munich region today is one of the wealthiest in Europe, boasting the highest quality of life in Germany. Bavaria and the greater Munich region have worked hard for many decades to attract technology-related business to the area. The aspiration to turn Munich into Germany's high-tech capital was formulated more than 40 years ago by the Christian Social Union (CSU) and Franz Joseph Strau , who was Bavaria's minister president from 1978 “1988. Convincing Siemens to locate its main headquarters in Munich after World War II was one of Bavaria's first steps in an impressive process of regional wealth creation. The following sections illustrate the Bavarian government's high-tech initiatives, and the region's struggle to develop an entrepreneurship culture to fully leverage its far-reaching potential.