Dr. Rolf Dahm: Ecosystems – A new hype in technology transfer?

Founders and ecosystems have more in common than it seems at first sight. Company founders move in an environment in which they have relationships with each other to a greater or lesser extent. These relationships and interactions are multifaceted and complex. The RKW in Rhineland-Palatinate regards itself as a mediator and facilitator for founders and entrepreneurs to convey the adjusting-screws of the local ecosystem.

The term “ecosystems” has been increasingly doing the rounds of the media and the public arena for some time, often in conjunction with and supported by investigations into start-up ecosystems, technology and innovation centres (see W. Axel Zehrfeld, Thomas Funke, 2014). After various practical trial constructs, this has now obviously given rise to a need for a systemic understanding of and constructive access to the development of such systems. The cited reference uses the Isenberg model (see illustration at page 56) and supplies examples and analyses, but we also use it as a reference to related literature. With particular emphasis on Rhineland-Palatinate (RLP), we want to compress the book’s broader basis and question some of the already existing “interpretations” of systems of this nature.

So it should be noted from the start that the debate is about our economic system. In other words, we are talking about complex systems, sometimes very complex and multifaceted relationships within such systems, and – since the aim of the construct is the permanent existence of the system and its participants – about its dynamics in particular. What makes things more difficult (see book and article by Fürlinger, Table 1: Comparison of Entrepreneurs and Managers) is that many of today’s active protagonists and system architects arguably have the worst possible prerequisites for preserving and operating such systems, as their own “dynamic” models are usually incompatible with  the dynamics and the desired characteristics of the target system.

This is accompanied – as an action or reaction by the core structure – by the insidious alienation of concepts. This becomes especially clear in the example of the start-up ecosystem. These concepts take their further form in fabricated terms such as “incubator” or “accelerator”, etc. or in attempts at glorification such as “hackerspaces” or “co-working space” – all fittingly borrowed from the Anglo-Saxon world, of course. In this example, the more concrete question is asked, where the aforementioned “founder” lost his relation to long-lasting „existence”. Coincidence? Spirit of the age? Intention? What is certain these days is that the media hype about such issues has become habitual; sometimes it is no longer about “existence~”, but “commercial~” and “sales~”. In their foreword, Zehrfeld and Funke correctly refer to the fact that “(…) a start-up leads to great success only in absolutely exceptional cases (…)” and that “(…) most start-ups fail on the way.” Cold, hard reality! Would you want to buy an everyday product which has an efficiency rate of only a few per cent and with a failure-rate of 90 per cent? So please, in the run-up to the formation of such systems in RLP, particularly in areas of technology, let’s get back to facts! The „existence” of many „founders“ is at stake, even if the rapidly-appearing groups of those benefiting from the system sometimes use various means of pushing it into the background. In the systems environment, the RKW RLP can and will provide support and assistance with its experienced composite structures, its qualified advice concepts and its specialised regional partners in RLP.

A second major factor also strikes a scientifically-trained observer immediately and one wonders how that fits in with commercial interests, which always adopt increasingly shorter-term expectations. Even the example of much-quoted “Silicon Valley” dates back to the original Terman idea of the 1920s. This idea received a boost in the early 1950s in the form of the industrial estate at Stanford University, and the actual “explosion” can be found somewhere in the late 1980s and the 1990s. These are now set patterns that are well-known from science, if one starts with a generation of researchers or intellectuals of some 30 years ago. So it must be clear, when establishing ecosystems or transfer systems, that we are talking about a generation project that is by no means short-term, but which does not show far-reaching results at all until a future generation – if at all. So are these the desired results and can they really be evaluated according to business management criteria? For billions of years Nature has been implementing (at least in the light of today’s knowledge) a stable system dynamics according to a minimisation principle; on the other hand, company managements and “the market” use property and capital in order to produce and exploit differences. These systems approaches are hence usually incompatible. As a second important factor, this was intended to flow into constructs of such transfer and ecosystems.

A third systems factor found in the aforementioned Fürlinger article in concepts such as “entrepreneurial spirit and culture”, “courageous” or “community”, is the concept of the “idea”. Every scientist or inventor knows that both generating and implementing ideas may be induced and promoted by a favourable environment, but that an idea always begins in the mind of an individual. One can certainly think later about the idea in groups on the optimisation of transporting the idea or the implementation structures on the way to the product (in this case, certain management skills in Table 1 will definitely be required), but in the case of start-up and transfer systems in particular, the focus is clearly on producing ideas. This systemic discrepancy is familiar to every start-up entrepreneur in discussions with bankers or negotiations on cooperation with industry and major corporations – worlds collide!

Modell nach Isenberg

In summary and as a constructive access of our approach for RLP, it can be said that, in one quarter or other at least, market, industrial and corporate-induced “start-up ecosystems” are conceivable in the short term, but the actual constructive use of such systems does not develop until they are extended to “entrepreneur ecosystems” or SMI ecosystems. In other words, they can be developed by supporting the strengths on a regional basis using “onion-skin” models and building them up in various surrounding layers, creating benefits for municipalities or the region. In particular, even “economic underperformers” are expressly necessary in many places in order to design the system or, in other words, a design feature of such systems is required so that the hype of purely economic indices is damned to failure from the start. A Formula 1 racing car goes no faster if its engine has 300 rather than eight cylinders. Rather, it depends on as complete a system optimisation as possible, e.g. appropriate brakes, aerodynamics and in particular the reliability of connecting small parts. Although much of the current state of technology is heavily regulated and established (see Table 1, Management) in the Formula 1, there are still failures such as connections and small parts, which can make the entire system fail and cost a competitor victory.

At this point, it is important to note that systems modelling-capabilities like this have been known for a long time and are being researched – but in the natural sciences, not in the economic sciences – for example in spontaneously-broken symmetries, which develop their system around an individual, spontaneously-realised ground state (see, for example, Percacci, 1986). In particular, this principle can be built up as a guide for existing structures and the transfer of new technologies, such as through the aforementioned “onion model”, but it requires long-term perspectives. For the RKW in RLP, this way leads via local/regional support and communication with business development organisations and interested “hidden champions” which would seek to replace the word “hidden” with “connected”. But a clear guideline and prerequisite is the necessary entrepreneurial spirit as well!

References: Percacci Roberto Geometry of Nonlinear Field Theories [Buch]. – Singapore : World Scientific, 1986. W. Axel Zehrfeld, Thomas Funke Abseits von Silicon Valley [Buch]. – Frankfurt am Mainz : Frankfurter Allgemeine Buch, 2014.

Dr. Rolf Dahm
Physicist Dr. Rolf Dahm (chairman of the executive board of the RKW in Rhineland-Palatinate) originally aimed at a scientific career but decided in 1994 to work as an IT entrepreneur. And he succeeded, as his ISB prize-winning company is today particularly active in the field of mobile applications and medical technology, thereby making it a respected cooperation partner of well-known providers. www.n-tier.de