- Entrepreneurship Environment and Policies

Summary of OECD review panel findings and recommendations

1 Some context

Part of agglomeration

● Borders are more administrative than functional: linkages within the city must be recognised

● Local authority district has limited powers and resources: it must work with partners Business activity is not strong

● Weak small business growth

● FDI hard to attract

● Service activities often oriented to local markets

Sometimes a poor image within Berlin

2 SME attraction

3 Strengths

● Assistance is provided to businesses seeking to locate in the district

● Labour is cheap and many workers with commuter jobs would prefer to work locally

● Business infrastructure is very good

● Good local shopping and leisure facilities

● ‘Berlin Eastside’ joint marketing initiative gives visibility

4 Weaknesses (1/2)

● The district economic development budget covers only staff and administration

● Economic support programmes are centralised at Land and Federal government

● The district must compete within the agglomeration for inward investment

● There are few large companies to attract suppliers

5 Weaknesses (2/2)

● ‘Berlin Partner’ is a central agency for Berlin with little special promotion for Marzahn-Hellersdorf

● Image problems within Berlin

● Marketing efforts are mainly locally-orientated and not targeted to economic opportunity sectors

● Major development concentrates in the city centre

6 Recommendations

● Seek out funding programmes that can at least indirectly support in-moving firms – Job training – Customising premises

● Seek to develop a local health care cluster, targeting existing SMEs that might move

● Support linkages with companies in Poland and Central Europe that are potential customers, suppliers and partners

● Continue to seek larger investors in partnership with Land

7 Property initiatives

8 Strengths

● Abundant premises

● Good mix of property types

● High quality premises

● Good supporting infrastructure, including transport links to city centre

9 Weaknesses

● Strong competition to fill space – Abundant, good quality space in other city districts – Property prices in neighbouring are lower

● Centralised property pricing policy of Land prevents price flexibility

● Limited private sector interest in property provision and management – Vacant sites and premises – Strong public sector involvement

10 Recommendations

● Examine the transferability of Tax Increment Financing to Berlin for property and complementary economic development projects

● Encourage greater private sector involvement in property initiatives to increase market flexibility and responsiveness

11 Modernising and diversifying SMEs

12 Strengths

● Wider regional circumstances that might be exploited to the benefit of the district – Quality of transport links – Training opportunities elsewhere – Potential support from Land government

13 Weaknesses

● Lack of a district strategy on small business and enterprise issues

● No district organisation dedicated to small business and enterprise

● Little higher education provision directly in the district

14 Recommendations

● Increase investment readiness and access to finance – Focus on access to existing sources of finance

● Review procurement policies of the local authority district – Remove any overly restrictive conditions on SMEs to bid for contracts – Promote opportunities to SMEs – Offer training and support to SMEs wishing to bid

● Adopt a Small Business Charter in the district administration – Council departments review procedures towards SMEs – Accompany with internal consultation and training within the local authority

● Make the Small Business Charter well known – Promote to local businesses – Refer to in international marketing – Involve business groups in drawing up and reviewing the Charter

15 Training for SMEs

16 Strengths

● Great variety of training offers to SMEs

● Subsidised services available for young companies, e.g. Chambers/IBB/KfW

● Large pool of qualified young adult workers

● XX

17 Weaknesses

● Can be difficult for SMEs to identify and select the right training offer

● Shortage of technicians with skills for the current labour market

● Training often limited to the early stages of business

● Necessity entrepreneurs often lack entrepreneurial skills

● Poor financial position of many companies reduces interest in fee-charging services

● Gap in innovation training for non-technology enterprises

18 Recommendations (1/2)

● Enhance co-ordination, transparency and quality checks on training services

● Refocus existing training towards – Standardised introduction courses followed by sector and company orientated training – Use of business games and simulations – Apprenticeships and work placements for schools leavers – Entrepreneurship education at school – Fill skills gaps

19 Recommendations (2/2)

● Public campaigns to increase demand for SME training (and quality of supply) – Publicise successful training schemes – Use participating SMEs as role models

● Enhance intrapreneurship to promote SME innovation – Generate intrapreneurial attitudes in company managers and staff – Use interactive learning approaches – Use case studies based on role models – Bring in support of Chambers, business associations and others

20 Points for discussion

● Reactions

● Agreements and disagreements

● Additions

● Making recommendations happen – how and who

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