OECD LEED Local Entrepreneurship Review, East Germany : Action Plan Districts Mittweida (Saxony) and Altenburger Land (Thuringia) This "ActionPlan" builds on recommendations given in the draft summary report on the districts Mittweida (Saxony) und Altenburger Land (Thuringia), March 2006, presented at a regional workshop on 20 March 2006 in Leipzig, Germany ENTREPRENEURSHIP ATTITUDES AND SKILLS What How Who* Increase institutional Stronger collaboration between Chambers of Commerce and Trade, Chambers of Commerce and collaboration Chambers of Crafts and the Public Employment Service would help increase Trade, Chambers of Crafts, the level of support from mere appraisal of a business idea, which is a pre- Crafts Association, and the requisite for starting a business with the financial support of the Public Public Employment Service Employment Service, to jointly organised orientation and coaching activities for new self-employed and entrepreneurs. Because of its strong orientation to the general population, the local Public Employment Service is a good starting place to identify potential entrepreneurs from all segments of society and direct them to appropriate advice and coaching. Improve the image of the Changing the entrepreneurial culture means changing the image of the All relevant stakeholders Districts Districts with both internal and external populations. If people do not believe that a place is attractive to live in, and that it allows the development of innovative and growing activities, then they will not set up businesses, or will set up or operate their businesses in more attractive places. Campaigns should therefore be created to generate trust in the endogenous strengths and future of the Districts. In strengthening their entrepreneurial image Mittweida and Altenburger Land should promote key specific strengths or 'magnets of attraction'. The Technology Centre and University of Applied Sciences, Mittweida, and the Altenburger Land-Nobitz airport are excellent examples of 'magnets of attraction'. Role models Successful local entrepreneurs should be profiled and publicised much more District administrations, other key than is currently the case. They should be described as 'profiles of success'. stakeholders Approaches include 'SME of the Year' awards in various categories (regional awards, sectoral awards, awards for biggest SME job creator, best exporter, etc.), regular newspaper reports, press releases when particular progress has been made and interviews on TV/radio. It is useful to emphasise the contribution made by these entrepreneurs to local development (e.g. jobs, exports, local services purchased/supported). 1 OECD LEED Local Entrepreneurship Review, East Germany : Action Plan Districts Mittweida (Saxony) and Altenburger Land (Thuringia) Increase awareness of Special promotions, where not already conducted, and promotional material District administrations, other key entrepreneurial opportunities aiming at increasing publicity and awareness of the opportunities for new stakeholders business start-ups amongst all segments of the population should be developed. While there are already some initiatives on these lines, the experience of other regions shows that this needs to be intensive and continuous. Further, Mittweida and Altenburger Land should be innovative and initiate their own local promotion that establishes their own identity and is directed at their own local populations. Establish mentor and patron The availability of a panel of retired business people to counsel new and District administrations, panels expanding companies has been an important feature of working with, and Chambers of Commerce and supporting SMEs, in other OECD countries. Both Mittweida and Altenburger Trade, Chambers of Crafts, Land should look at mentoring and patron type programmes and seek to have Crafts Association, Venture dedicated panels of people that can contribute to the strategic development of Capital schemes, Business local companies. This should be seen as counselling and not consultancy Angels, public and private banks where the consultant would operate on commercial terms (e.g. assist in preparing financial accounts). Given the high level of business plans that are deemed inadequate by banks the introduction of mentors at the early discussion stage of start-up proposals may assist in addressing this issue. This type of mentoring service is relevant to both micro and larger SMEs, and at start-up and later stages of development in the life cycles of companies. * This is not an exhaustive list of stakeholders and actors. It needs to be adapted to and completed for the local context. ENTREPRENEURSHIP FINANCING What How Who* Instigate discussion on the role Local agencies should instigate discussion with regional and local District administrations, of banks for local management of all banks and financial institutions on how these bodies can Chambers of Commerce and entrepreneurship development play a stronger and more active role in promoting and providing funding to Trade, Chambers of Crafts, start-ups and existing SMEs. This discussion is not about persuading the Crafts Association, Venture banks to adopt a less commercial approach but about seeking more Capital schemes, Business engagement from them in the new enterprise strategy of the region. It should Angels, public and private banks also address the scope of local management in banks to deal effectively with local enterprise. 2 OECD LEED Local Entrepreneurship Review, East Germany : Action Plan Districts Mittweida (Saxony) and Altenburger Land (Thuringia) Address weaknesses in As a contribution to resolving the problem, the banks might consider Chambers of Commerce and business plan preparation and producing a guide to business applicants or undertaking some work on Trade, Chambers of Crafts, business development establishing 'mentor' panels and 'patron' panels that will guide entrepreneurs Crafts Association, Venture before they make any formal application to banks. The work of banks here Capital schemes, Business might be done in conjunction with existing schemes of advice to Angels, public and private banks, entrepreneurs. If such work has already been done, then the question of its InnoRegio initiatives effectiveness needs to be examined by the banks. Enhance value added in A persistent theme from feedback in both Altenburger Land and Mittweida Chambers of Commerce and enterprises was the low equity levels in many companies and the need for existing SMEs Trade, Chambers of Crafts, to strengthen their balance sheets and profit levels. This will require strategic Crafts Association, Venture changes such as changes of products or enhanced value added in products Capital schemes, Business and services. For high tech companies, where sometimes the level of Angels, InnoRegio initiatives investment needed is significant as companies grow through development stages, the issue is more pronounced. Simplify and streamline Regulations and conditions for existing and new enterprise support Land governments, public banks, regulations and procedures in programmes need to be more transparent and procedures simplified. private banks, district existing support programmes Bureaucracy should be reduced, decision making accelerated and information administration, other institutions made more accessible with respect to enterprise access to funding. An involved in delivering public evaluation of the impact of regulations and procedures should be conducted support programmes for on an annual basis based on feedback from client companies. The public entrepreneurship development, banks ("Aufbaubanken" of Saxony and Thuringia and other relevant like InnoRegio initiatives, authorities should examine how existing administrative procedures in regard Regional Management to investment allowances, which might be simplified and streamlined. Increase the availability of A need for increased availability of microcredit schemes is an issue Land governments, public banks, microcredit highlighted in both regions as key to start-ups. This should be the subject of private banks special discussion with all banks and financial institutions. Review existing venture capital The existing schemes of venture capital provision should be reviewed in more Venture Capital schemes, Land schemes detail as to their relevance and effectiveness in generating and supporting governments, public banks, new companies and growing SMEs. It appears that much of the venture private banks, Chambers of capital, insofar as it has happened, is less effective than in other locations Commerce and Trade, worldwide. Local agencies should examine, in co-operation with financial Chambers of Crafts, Crafts institutions, how joint funding initiatives might enable more local venture Association, Business Angels capital to be introduced. 3 OECD LEED Local Entrepreneurship Review, East Germany : Action Plan Districts Mittweida (Saxony) and Altenburger Land (Thuringia) Seek the involvement and A developed venture capital system needs individual investors as well as Chambers of Commerce and advice of business angels venture capital funds. 'Angels', that is people who are prepared to invest in Trade, Chambers of Crafts, individual companies and frequently bring knowledge of the sector or other Crafts Association, Venture strategic advice to companies, are common in most OECD countries. They Capital schemes, Business may be people who successfully started a company in the past and may have Angels, InnoRegio initiatives a series of