Entrepreneurs change the world. Forever. They are so enthusiastic about a new idea – or so frustrated with the current situation – that they introduce a novel idea to the world, and in doing so, they come up with new ways of doing things that are better than anything we’ve previously known. They create jobs, they fuel affluence, and they enhance the ability of an economy to innovate. One aspect that is central to this is technological development and the business models it engenders. Just why this is so is described by Prof. Dr. Peter Philippi- Beck of the I/B/N Steinbeis Transfer Center (Internationalisation – Equity Participation – Succession Regulation).
So entrepreneurship, or rather, entrepreneurial behavior, is about fostering change. According to the definition of Schumpeter, it’s also about driving innovation. If the changes and innovations this results in are successful (as it says above), this creates jobs and affluence. The significance entrepreneurship therefore holds is clearly understood by politics, business, and science. This is reflected in the wealth of funding programs that now exist, as well as business plan contests, plus a rich selection of venture capital options. From an academic standpoint, entrepreneurship is now also engrained in teaching, at home and abroad. But what are the constituent elements of success when it comes to entrepreneurship? At first glance, it seems to be something about people’s personality, something which is underscored by terms like creativity, courage, and determination. But it’s also about how people deal with risk and all of these aspects are a prerequisite for entrepreneurial individuals to want to occupy themselves with “the new,” or to dare to innovate, or to want to be an entrepreneur in the first place.
Innovation is not necessarily always about technical novelty. For example, an innovation can be a new process or an innovative variation on service delivery. The skill of the entrepreneur is to spot an opportunity that makes it possible for an innovation to succeed. It also takes a good concept that is matched to the requirements of an industry, or a market segment, or the needs of a group of customers. To do this takes a detailed understanding of customer requirements and the market. This is because innovations can only be positioned properly in a market if they deliver customer benefit.
This in turn means that innovations make new, customer-centric business models possible – indeed they require such models, and these can then change an entire industry. Examples of this are innovative ideas like Apple’s i products or the launch of Uber. These business models resulted in changes to customer relationships, revenue models, production concepts, etc. They made it possible to establish strong customer relationships and offer solutions that appeal more directly to customers. And this brings us on to another aspect of entrepreneurship: the link between innovations in the field of technology (or processes) and underlying business models. Successful entrepreneurs know how to translate such business models into reality. Innovative business models make it possible to set up successful companies and make a commercial success out of technical solutions. This takes things full circle, allowing the economy of a country to develop better, remain competitive, and create affluence.
That being said, entrepreneurs are not alone in their endeavors. Their success depends on the motivation of those who work with them, those who drive innovations, and those who make business models happen. Entrepreneurs are in a position to spot co-entrepreneurs and support them. When they do this, they help support innovations, and, as such, they flourish in this role.
At this very moment in time, digital solutions are opening the door to scores of new opportunities to establish such innovative business models and thus keep existing companies moving forward or even set up new companies. Examples of this can be seen in digital networks, mobile end devices, self-learning machines, artificial intelligence, and the possibilities presented by sensors, all of which offer a basis for new business models. New technologies change almost all areas of modern life. This starts in aspects like how information is exchanged, how devices are controlled through the Internet of Things, or how production is connected and controlled in keeping with Industry 4.0. For Germany in particular, this is a huge development opportunity – especially if newly developed technologies and the technological changes they bring about also have an impact on different sectors of industries, or even entire industries.
To be part of such changes, however, it’s necessary to spot technology trends and to acquire (or already possess) an in-depth understanding of business models and how they are influenced by technology. It’s especially important to understand how existing business models can be influenced by technological change. In this respect, new competitors are a particular threat to established companies because they have the potential to burst into entire industries with their disruptive business models. Given the fact that a number of these disruptive business models (such as Amazon and Uber) and their competitors have been coming from abroad in recent years – and not Germany – yet they’ve still had an impact on business models here, we can see how important entrepreneurship has become for our society.
Another prerequisite for introducing new business models is an interdisciplinary understanding of technological trends and how technologies are translated into products, processes, and business models. This is another defining feature of successful entrepreneurship, in the way different disciplines are integrated into a business model and thus add value.
To support entrepreneurs in Germany, the Steinbeis Network offers a range of interdisciplinary consulting options, spanning technology trend research and the translation of findings into products, production, and business models. The framework for this is provided by Steinbeis KTU (competence team for technology implementation and business optimization). The KTU encompasses scientists, engineers, and business experts, who work with and for companies to develop competitive solutions that revolve around future technologies, resulting in new products, production methods, and business models. They also provide support to entrepreneurs to identify future technologies, to spot the innovations these could fuel, and to actually make these happen. By working in partnership with research institutions and universities of applied science, entrepreneurs are offered an attractive package of services with the aim of creating business models with genuine appeal that will help stand firm in the face of competition.
Prof. Dr. Peter Philippi-Beck is the director of the Steinbeis Transfer Center for Internationalisation – Equity Participation – Succession Regulation. His Steinbeis enterprise provides customers with support and advice on issues relating to company succession, acquisitions, and sales. It also helps with funding options and the development of business models against the backdrop of technology trends.