What makes a university a business incubator

Educational institutes as a driver of innovation: students who start businesses during or after their time at the university have become an important factor for the reputation of universities with a business focus and business schools. A team of researchers led by Prof. Isabell Welpe from TUM School of Management found new approaches for evaluating the entrepreneurial potential of German higher educational institutions.

The research team – led by Prof. Isabell Welpe and comprising Marvin Abdel-Massih, Kai Uhlemann, Stefan Bielmeier, Benjamin Horvath, and Lukas J. Heidegger from Technical University of Munich (TUM) – conducted the study in collaboration with BLOCKROCKET, GlassDollar, and Sigma Squared Society.

They find that large, public universities with more than 10,000 students lead the entrepreneurship ranking in absolute numbers: Among the TOP 500 start-ups in Germany a total of 67 start-ups were founded by TUM students and/or alumni, which makes TUM the top ranked university.

Moreover, the study provides a new metric for measuring entrepreneurial potential of educational institutes as the researchers not only evaluated the absolute numbers, but also put them in a relative context of the university’s size (i.e., number of students enrolled). From this relative perspective, small and private business schools seem to thrive: WHU’s Otto Beisheim School of Management is the top performer, with 48 startups among around 1,000 students. In comparison, TUM has 67 startups among around 45,000 students. Alongside the University of Mannheim, TUM remains the only public university ranked in the relative top 10.

There are already a number of rankings and studies that examine and evaluate the startup performance of German universities, such as the ones from Gründungsradar or Deutscher Startup Monitor. In contrast to these existing rankings, the team’s results are not based on university surveys but on external data sources in order to obtain an objective and systematic data basis that is independent of subjective opinions and impressions. To do so, the researchers analyzed the LinkedIn profiles of founders from the 500 most successful German startups over the past 10 years, based on the data-as-a-service platform Crunchbase, and assigned the entrepreneurs to their universities. Next, they counted the number of affiliated founders with each educational institute to establish the ranking. Kai Uhlemann, co-author and doctoral candidate at the Chair for Strategy and Organization, held by Prof. Welpe confirms, “Our study shows that objective and quantitative analyses are particularly important in this area.”

The study states that university-related entrepreneurship programs from external institutions are particularly relevant for the entrepreneurial potential of educational institutions. The TUM scores with its successful partner institutions: the research and training institute Center for Digital Technology and Management (CDTM) and the entrepreneurship scholarship Manage and More from UnternehmerTUM focus on the practical support of young founders. Utilizing comparatively small investments, they have produced a large quantity of successful startups. As Prof. Welpe explains, “The top universities are characterized by external entrepreneurship programs that create freedom and cross subject boundaries.”

For Prof. Welpe, the university plays an important role in the founding of new companies. “Universities provide a meeting and networking platform for founders,” she says. The more experienced the university faculty staff are, the greater the impact on future founders. Investments in business faculties and in STEM subjects are a good knowledge base for future startups. To motivate more graduates to start their own businesses, the study argues, universities should spark their interest early and allow experimentation. Successful startups can act as role models and students should receive ECTS transfers for longer-term, interdisciplinary startup projects.

Do you want to learn more about this topic? You can find the entire report here: https://www.entrepreneurshipranking.com/

Contact:

Univ.-Prof. Dr. Isabell M. Welpe

Chair for Strategy and Organization

Technical University of Munich

TUM School of Management

Mail: welpe@tum.de

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