Professor Dr. Orestis Terzidis talked to TRANSFER about research into entrepreneurship, the nature of technology entrepreneurship, and the impact that the current trend toward digitalization will have on future entrepreneurs.
Professor Terzidis, you work in the field of entrepreneurship research, which is a lot about the paradigm of human-centric cybernetics. Why did you decide to take that approach to entrepreneurship?
Established companies know their business model and get on with implementing it, unlike startups which are trying to identify a business model. Putting it bluntly: established firms deliver. Startups learn. An important part of entrepreneurship is systematically supporting this learning process for startups and making it efficient. The basic metaphor of cybernetics is the helmsman (kybernetes). It really is like someone at the helm of a ship. They have a target destination, they look at their environment (the wind, the sea, the coastline), and they have different ways to steer the boat (the helm, the sails, the rudder). Regardless of what they take in around them, they guide the boat to its destination. There’s not really a fixed plan to work to, they react to the situation around them as they need to and re-orientate themselves each time. It’s the same with startups. Iterative interaction with the environment, agile development, lean startups – they’re all well-known reflections of this phenomenon. It’s about uncharted territory waiting to be explored and this exploratory approach is what makes entrepreneurship what it is. You’re not planning and carrying out a fixed plan. It’s dynamic navigation within a sphere of problems and solutions until a sustainable business model has been identified. Entrepreneurs explore in a series of feedback loops, which is why we talk about human-centric cybernetics.
How important are innovation and technology transfer for research and teaching organizations?
Research and teaching facilities generally provide an extremely constructive framework for innovations and setups. They provide space, room to question established technologies and value-adding processes. They allow people to explore new avenues. All important innovation ecosystems have research and teaching facilities, and these play a pivotal role. Technology startups are exceptional cases and they’re important. Transfer research can work by going through established companies or through startups, but in both cases, the aim is to transform new knowledge that has emerged through research into benefits – benefits to society, the environment, companies, private individuals. Research institutions also play an important role when it comes to technology transfer. This is because, in legal terms, they own intellectual property and every element of innovation that is based on this intellectual property has to take that into consideration.
Another area you conduct research into is technology entrepreneurship. What’s so special about this area?
At an organization like KIT, which is involved in such intensive research, lots of new knowledge is generated and with that, lots of intellectual property. There were around 60 patent registrations in 2015 alone. Over the years, that adds up to a respectable portfolio of patents. With technology entrepreneurship, the aim is to translate these new possibilities into market-ready applications. Incidentally, most startups don’t actually stem from patents, they’re about user-centric innovations. There are a number of methods already available for user-centric processes. There’s design thinking, where you start with the overall context of the user and based on the observations you make, you adopt one angle, generate some ideas for solving the problem, create some prototypes, and then validate the ideas with actual users. If the innovation process is sparked off by a new scientific discovery or a new technology, you have to use a different method. Then you start by looking at – or characterizing – the exact nature of the technology, you develop some ideas for possible applications, and then the options this throws up are evaluated according to their potential to make things happen. The sequences, content, and iterations of analytical, creative, and empirical elements are different with a technology-centric innovation compared to a usercentric innovation. Developing the right approaches and methods is one of the central aspects of technology entrepreneurship.
You lecture in the art and science of entrepreneurship at your chair for entrepreneurship and technology management. Does than mean anyone can learn how to be an entrepreneur or are there certain defining characteristics that are needed to succeed in this area?
You can compare that question to another question: Can you learn to be a pilot? Or to play the piano? Sure, things like that take talent, but they can also be learned. It’s no different with entrepreneurship. Teaching can help unfurl a certain disposition. Time and again, researchers try to find out whether there are certain psychological traits that define an entrepreneur. The famous professor of entrepreneurship William Gartner points to three such traits. First is the need for achievement, the second is a conviction that the entrepreneur can make things happen (locus of control) rather than being determined by the circumstances, and the third is a risk-taking propensity. There is, however, a completely different view. Some people point to something called the individual-opportunity nexus, a kind of resonance between a business idea and the enterprising individual. When the resonance is there, it releases the energy to pursue an opportunity. This allows individual potential to develop which would otherwise lie fallow. Entrepreneurship teaching is a good way to prepare people for this.
You’re also the joint project coordinator of the KIT Startup Incubators, the Founders’ Forge initiative that was set up in April 2013 to support the development and promotion of entrepreneurs and companies and help their innovations succeed. What services do you provide and who are the target groups?
The emphasis lies in a number of areas. We offer a wide spectrum of entrepreneurship teaching, models for research assistants to hone their technology transfer knowledge, an accelerator program for new startups, a special KIT crowd funding platform, services in the area of consulting, support with startup projects, networking events in the surrounding area, and lots of news and information sharing, both internally and externally. Accordingly, the target groups are students and scientists, but also anyone working in this field such as investors, entrepreneurs, and their counterparts in economic development, the Cyberforum, and the IHK chamber of commerce. The world is now a global network so contacts abroad are particularly important and we also offer things like a spring and summer school in English.
The current digital technology trend is hugely important for growth in Germany and safeguarding the future viability of the economy in the face of international competition. What opportunities are there for future entrepreneurs, as well as challenges, and what can they do to prepare for them?
Digital technology is the key to a whole host of business opportunities, although to use the term invented by Schumpeter, it also has the potential to cause creative destruction. It makes it possible to reach out to users and customers. It raises productivity and process flexibility. It supports production processes. This transformation already started decades ago, but it keeps coming back with wave after wave of sweeping changes. There’s every sign that the next wave is about to hit us. From an entrepreneurial point of view, this will create many new opportunities and the startup scene has plenty of ideas up its sleeve to tackle these new opportunities. As in the past, there are lots of services and products that can be made to work better through the internet than in all other formats we’re familiar with. Integrating the real world into digital environments takes on a whole new quality with sensors and robots. The physical world and digital world are merging. These are realms that offer completely new opportunities, but at the same time they challenge the established offering. Entrepreneurs need to track trends and develop an eye for the areas where there’s potential for sustainable innovations.
Prof. Dr. Orestis Terzidis heads the Institute for Entrepreneurship, Technology Management, and Innovation at the Karlsruhe Institute of Technology (KIT). The aim of the institute is to further knowledge and skills that make it possible to implement new technologies and business models through entrepreneurial undertaking revolving around innovation.