Building the Munich

Building the Munich "Cluster Satellite" Model ” Proximity Matters

The Bavarian model for regional planning has changed from building a little technology park for each city to building technology-oriented competency centers for different high-tech industries mainly around the city of Munich. Each is within an hour 's drive of the other, but no more than 30 minutes from the city center. The idea was that if competency was bundled within a small area, innovation would take place more efficiently . The Bavarian government was convinced that there needed to be several different growth centers and that in each one of these, the key ingredients were incumbent players, university and other research activities, and effective start-up support. The aspiration was to create a unique symbiosis of old and new structures in the Munich region. This would derive its strength from a natural coexistence of lifestyle, technology, tradition, and progress, and foster cross-fertilization between businesses, education, research, and venture capital through the co-location of distinct high-tech industries in and around the city of Munich.

Initially, Munich's high-tech cluster satellite model was based on the decentralized structure of Munich's two universities, which are headquartered in the center of the city, with many of the departments and faculties located at different locations throughout and even outside of the city. An example is the small town of Garching, less than 30 minutes from the city's center. Here, the presence of the Max Planck Society and the Technical University's faculties for physics, chemistry , and engineering have recently also attracted the university's mathematics and software research faculties. The additional 3,000 students that are expected to begin studying in the town by the first half of 2002 will benefit from an excellent existing research environment, a newly completed $60 million building (a token of the state government's Software- Offensive Bayern), ^[18] and a newly installed technology start-up center.

Dr. G ¼nther Ernstberger, managing director of the new media incubator Gr ¼nderzentrum f ¼r Neue Medien Unterf hring ^[19] (GZM), explains that placing Munich's high-tech clusters in the nearby suburbs has reaped substantial benefits. While easily accessible from the city center, these clusters are practically located in the countryside. This provides an attractive environment to many employees and takes some of the pressure off the housing shortage in the city's center. Unterf hring is another example of the state government's initiatives to build on existing industry structures, in this case media, by acting as the initial spark for the development of new high-tech clusters in the Munich region.

G ¼nther Ernstberger

New media at GZM Unterf hring

I consider the GZM to be a prime example of the private/public relationship that has been successfully driving the development of high tech in the Munich region. The GZM was originally conceived by the two Bavarian State Ministers Erwin Huber and Otto Wiesheu. They were convinced that the concept of an entrepreneurship center with incubation facilities pioneered in other high-tech sectors around Munich, would also work within the new media environment, especially if it was placed in Unterf hring, which had already been an important media cluster for several decades. The GZM was designed to complement Munich's strong existing media networks, while being considered a key investment into the future competitiveness of the media industry in the region. Today, more than 5,000 of the 10,000 jobs that exist in Unterf hring (population 8,000) are in media companies.

Critical to the success of the center has been the support from established media companies. The GZM was very well received by the established players from its inception, who saw the center as a chance to get closer to the cutting-edge developments that were going on in areas such as Internet services and content development, and were beginning to revolutionize existing media markets. The GZM today is sponsored by a large number of companies as well as the Bavarian government. The fact that these institutions assure a solid sum of finance is a key factor enabling the sustainability of the center.

The biotech cluster in Martinsried is another example of the Bavarian government's commitment to creating an entrepreneurial environment in the Munich region. While Unterf hring managed to develop out of its own dynamic, owing to the interest of established media businesses in the area, the Bavarian government practically built the infrastructure in Martinsried from scratch and then watched as more and more very promising biotech companies started to set up around the town.

While other German regions such as Berlin seem to be catching up to Munich as their governments invest large amounts of money into their technology start-ups, the growth of biotech companies in the Munich region indicates that state aid is important in the early stages of a company's development, but less so in later stages. As soon as companies start growing, the central question becomes, "Will the infrastructure of the region enable a start-up to become a real company?" This shows the limits of government support merely through funding. According to Dr. Weber of Morphochem, Munich remains Germany's leader in growth enabling infrastructure with a critical mass that includes experts from all scientific fields, an unmatched international openness, and an industrial diversity that is especially important for an interdisciplinary industry such as the biotech industry. This may be one of the reasons why Berlin has quite a few small biotech companies, but not many large ones.

Lutz Weber

Entrepreneurial infusion in Bavarian biotech ” IZB Martinsried

Martinsried is a small town with a population of 5,000, located in the Bavarian countryside just outside of Munich. During the past few years , the state of Bavaria has invested more than $20 million into the Innovations- und Gr ¼nderzentrum Biotechnologie ^[20] (IZB), a biotech start-up center and incubator that today houses more than 20 companies.

The development of the cluster began in 1973 when this quiet country town, which consisted only of a few agricultural farms, became the new home to the biochemistry and neurobiology centers of the Max Planck Society. The new research campus was built five walking minutes away from a major Munich hospital and in 1983, the scene was complemented by the genetics center of Munich's Ludwig-Maximilians-University. Today, one of the key success factors of the cluster is the campuslike proximity of its key organizations, all within a few "bicycle minutes" from each other.

The nucleus of the cluster today are the company Bio ^{M [21]} and its visionary founder, Prof. Horst Domdey, who is considered to be the pioneer of the cluster's success. Bio ^M supports start-ups in the region by acting as a communications point between business and research, by providing access to networks, and by investing seed capital in collaboration with the Bavarian government's Bayern Kapital fund as well as with locally based venture capital companies. Bio ^M invested in 29 of approximately 55 companies at IZB Martinsried and is financed by taking equity stakes in its clients ' companies.

The success of Martinsried has caused a considerable repatriation of German scientists who had left the country for San Francisco or Boston, disappointed by Germany's bureaucratic and non-entrepreneurial environment. Coming back, they have brought the American spirit of uniting scientific and business mindsets , a new concept that could finally be realized in the intimate proximity inherent to the Martinsried cluster.

In between Munich's satellite clusters, smaller agglomerations of companies from specific high-tech sectors have formed "technology platforms" often close to large research institutions, which further enhance the efficiency of the region as a hub for innovation.