Large Companies Replicating Silicon Valley s Cross-Fertilization

Large Companies Replicating Silicon Valley's Cross-Fertilization

Anthony Maher, a former member of the board of Siemens Information and Communication Networks, and who was also in charge of Siemens' venture investments, believes that the technical universities in Munich and Bavaria are excellent . He explains that they generate many students with a great depth and substance of technical knowledge, and who have a strong wish to finally let all of their knowledge flow when they finish studying , having spent more time at university than students in the U.S., for example. However, in line with the general opinion on Munich's performance, Maher believes that these resources traditionally have not been leveraged to their full extent.

For Siemens, ^[14] working to instill a culture of entrepreneurship and innovation in the region has been a strategic aspiration, aimed at being able to capitalize upon the unexploited intellectual potential within its own four walls, but also outside of its corporate boundaries within the greater Munich region. Mr. Maher refers to the region's intellectual potential as "raw resources in the ground that just need to be picked up and polished" by giving them the space and to expand themselves . Whereas many traditional companies tend to "confine" the creative capacities of their employees , Siemens believes they need to be freed within a suitable environment. In attempting to create this kind of environment in Munich, however, Siemens found that the charisma and the spirit of Silicon Valley were missing and that entrepreneurial culture in the region was just at its beginning.

Anthony Maher

Can large companies import an entrepreneurial culture into a region?

A company in a traditionally non-entrepreneurial region, seeking to create an entrepreneurship culture within its own walls first has to become a dedicated investor in small companies outside of its own corporate boundaries. These investments need to be made within and outside of its home region in order to enable a successful transfer of the required culture.

Siemens is headquartered in Munich, while many of the world's most entrepreneurial companies are based in the United States. For this reason, we began to invest in small U.S. companies to import the badly needed entrepreneurial culture to our headquarters in Munich, and then to spread this culture to the greater Munich region through local investments, spin-offs, and natural employee rotation.

When the high-tech investments in the U.S. were made, cross-cultural teams were built between these companies and each division of Siemens in Munich. Soon after, a rubbing off of cultures started taking place as both sides interacted and began helping each other. This rubbing off was necessary for people on the inside of Siemens to understand the outside entrepreneurial world, before attempting to develop it internally. Siemens' investments have not been limited to supporting entrepreneurial developments and fostering innovation within the company. After successfully learning from our U.S. investments, Siemens now actively promotes entrepreneurship and innovation within the entire Munich region, convinced that the culture surrounding the company is just as important as the culture within the company.

The increasing existence of small innovative companies around Siemens in Munich has contributed to making the region a magnet for innovation while enabling cross-pollenization between different technology sectors, all to the benefit of Siemens' global operations.

The role of youth and large companies as agents of change

Creating a culture for entrepreneurship within a region is a daunting task. However, I believe that starting with young people is one key to success, since the cultural differences between young people around the world are minimal. They have not had enough time to accumulate cultural baggage. Young people in Santa Clara and in Munich are not all that different if one applies motivational incentives, such as the perspective to acquire wealth and to achieve successful status.

In this sense, large local high-tech companies play an essential role in unleashing intellectual potential and in creating new regional wealth. They can help import new business cultures and can help spread these cultures, creating regional success stories along the way. Munich has not yet produced many global success stories and for this reason suffers from international underexposure. This in turn causes a general lack of understanding of how nice it is to live here and of what the young people here are doing and are willing to do. Siemens is playing an instrumental role at creating an environment that will foster the innovation and entrepreneurship necessary to enable the success stories that Munich will need to compete in the future.

While Siemens' efforts to import entrepreneurship have shown considerable results, the company has been struggling to deal with Germany's lack of a service culture and restrictive federal immigration laws. When compared with service-focused regions such as Ireland, Germany tends to be far more focused on engineering than developing user-friendly features or services for businesses and end- user consumers. These "entrepreneurship killers" are considered a serious disadvantage to the competitiveness of the Munich high-tech region.