photo: Jan Antonin Kolar / Unsplash

Munich as a Growing Hotspot for Innovation and Entrepreneurship

Time and again, Munich takes the top spots in city rankings – as was the case in 2020, when the IW Consult city ranking put the capital of Bavaria at the top of several categories. But are the conditions really ideal for an entrepreneurship and innovation ecosystem? A recent white paper from PwC and Muc Summit provides answers.

The white paper shows that Munich is extremely attractive in a number of areas. It is rightly so that the capital city bears the title of “tech hub” with its renowned universities, a large and concentrated business environment and a strong startup ecosystem. A good IT infrastructure, the availability of funding and the proximity to established companies also play a role, as does the presence of large multinational companies.

The city also excels as a location for science. The region is among the leading locations in 27 fields of technology in all of Europe. That includes many promising industries for the future, such as life sciences and biotechnology, aerospace and the automotive industry. The high number of students in Munich – a total of 131,006 – contributes not only to that, but also to the large pool of talent of young employees as well.

“Munich’s excellent universities with their entrepreneurial orientation, including TUM, LMU, HM and UniBW, offer ideal conditions for positioning Munich as an entrepreneurial ecosystem,”

explained Klaus Sailer of the Strascheg Center for Entrepreneurship, who was interviewed for the study.

Munich as a science and business location

The white paper attributes Munich’s economic strength above all to its exceptional competitive ratios and an outstanding combination of industries. The city accounts for just under 19 percent of the total GDP in Bavaria, and that figure increases to 31.4 percent when the surrounding area is included. Purchasing power in Munich is also roughly 38 percent above the national average. When it comes to the combination of industries, PwC and Muc Summit identified what is known as the “Munich mix,” which is a balanced composition of large companies, medium-sized companies, startups and traditional craft businesses. Relevant industries include information and communication technologies, services, research and knowledge-intensive industries – especially life sciences, medical and environmental technologies – as well as the cultural and creative industries.

The authors also emphasize the strong networking between industry, startups and scientific institutions. The high density of events and opportunities for exchange give the Munich tech hub an extremely solid starting position for the rapid distribution of information.

Potential for improvement

The white paper does, however, point out some ongoing issues in Munich’s innovation ecosystem. For example, many key players, such as funding institutions and investors, are just beginning to develop an understanding of their leading role in Munich. And networking as well – which is actually quite good – has shown room for improvement. For specialized communities in particular, such as the One Mission Initiative and the Female Investors Network and Venture Capital Club, there needs to be enhanced networking with other players.

“In addition to active regional funds, such as UVC, Vito and Earlybird, large international funds such as Lakestart are also attracted for follow-on rounds. These are of considerable scale throughout Germany and visible internationally, too,”

commented Helmut Schönenberger, UnternehmerTUM, who also answered questions for the white paper. The authors summarize that there is still work to be done on the support and funding conditions in Munich. And the housing situation in Munich must become more attractive, particularly for younger people and the creative scene.

The full white paper can be downloaded here.

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