Dirk Riehle's Industry and Research Publications

What’s wrong with German university startup incubators?

Let’s use the simple root cause analysis method of asking multiple times why.

1. Many German university incubators are a joke.

Why are they a joke?

2. Because they don’t deliver what they should be delivering: Return on investment for the commercialization of all the intellectual property created from public funding given to them.

Why don’t they deliver?

3. Because they have no or only vague or just bad performance goals.

They should focus on generating return on investment on their intellectual property; instead they have no performance goals or vanity performance goals like number of startups created.

Why do they have bad performance goals?

4. Because many universities do not care about return on investment.

Why do most universities not care (and not manage stringently)?

5. Because they don’t need the money.

Obviously, many universities will object and argue they never have enough money. So, arguing the inverse then: Why do they ignore an important long-term opportunity? One that gives them independence from public funding?

Step 2 above, not delivering on what their performance goals should be is a fact, not an argument: Few if any German universities make actual money of their intellectual property.

It may appear as a catch 22: If a university was successful in making money of their intellectual property, public funders might get the idea that they could cut the university’s budget, which creates the perverse incentive to downplay the potential of research commercialization.

Still, the long-term benefits of a more diversified income stream and independence from public funding should more than outweigh this.

So why does it not outweigh this?

I don’t have a clear answer to this final question, at least not one I’m willing to share publicly.

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