A Bavarian MIT?
How a German University Reengineers Higher Education for Entrepreneurs and Innovators
In Fall 2023, Bavaria attracted over 7.2 million visitors, solidifying its status as a dream destination. These figures set a new milestone for the Munich Wiesn, the internationally acclaimed Oktoberfest. Equally record-breaking, and a hot topic for study abroad programs, is the ascendance of Bavaria's Technical University of Munich (TUM). For several years, TUM has been heralded as Germany's leading university, consistently securing top spots in the Shanghai Ranking, QS, and THE, with its graduates being ranked 13th worldwide in employer esteem. Despite Germany's innovation economy having a hard time, TUM students have consistently produced successful high-growth startups, prompting a question: What's going on in the land of Dirndl, Lederhosen, and why does it matter to MIT?
Since becoming TUM's president in 2019, Thomas Hoffmann has been a lucky duck. He was named German University Manager of the Year in November 2023. Soon after, he secured funding from the Dieter Schwarz Foundation for 41 new professorships over 30 years, closely tied to the wealthiest German and his Lidl supermarket chain. What is likely the largest private investment in a public university in Germany's history is also an anomaly for its egalitarian higher education system. Anne MacLachlan of the Berkeley Center for Studies in Higher Education predicted in 2018 that the emergence of a German elite university akin to those in the United States was improbable. Yet, if TUM were a franchise, it would already be an export hit with four German spin-offs in different regions, a Singapore campus, and liaison offices in Brussels, San Francisco, Sāo Paulo, Beijing, and Mumbai. This expansion somewhat mirrors former Stanford President Gerhard Casper's 2015 call for German universities to evolve into foundation universities.
TUM's latest donations mark yet another stride in an ambitious journey dating back to 1990. The initial spark was in California, where TUM graduate student Helmut Schönenberger undertook a study comparing his alma mater with Stanford University, which led to the recommendation of creating a startup center in Munich. By 2002, with prominent support from BMW heiress Susanne Klatten, TUM founded UnternehmerTUM (Eng: EntrepreneurTUM). Dedicated to fostering entrepreneurship, the spin-off averages 80 startups annually, launching notable scale-ups like Flix and Celonis. With a workforce of over 400, UnternehmerTUM stands as Europe's largest startup accelerator, offering comprehensive support across various growth stages, including a three-month digital product school, the XPlore go-to-market program, and an incubator for validating business models. The organization also spearheads cooperative ventures like the Digital Hub Mobility, focusing on technology scouting for SMEs, and the Circular Republic funding platform, initiated with BMW. Additionally, it runs BEFIVE, catering to construction and real estate firms, and FamilienUnternehmerTUM, which fosters innovation within the family businesses of the renowned German Mittelstand. Today, a as a vice president on Hoffmann’s executive team, Schönenberger plays a pivotal role in redefining entrepreneurship as a crucial link bridging research and teaching, basically positioning it as the third foundational pillar.
Regarding teaching, a key component of TUM's entrepreneurial formula is its in-house Management & Technology degree. This program, especially favored by international students, enjoys great popularity in the student-based CHE survey. Its interdisciplinary framework aligns with Stanford empirical studies recommending integrating business and engineering education to nurture entrepreneurial mindsets. Sheri Sheppard, a corresponding study author, was named a TUM Honorary Professor in 2023. Her collaboration with the TUM School of Management has previously facilitated opportunities for students, e.g., from the Center for Digital Technology and Management (CDTM), to undertake research in Silicon Valley. In partnership with Ludwig Maximilian University, Munich's oldest university, CDTM is another part of TUM's focus on entrepreneurship. This center offers a joint honors degree in technology management, similar to Boston's Cross Registration, enabling students from MIT and Harvard to take courses at multiple universities and utilize all of the regional ecosystem's resources. Comparable to FC Bayern Munich's distinct status in soccer, this study model is in a class by itself.
Across Europe, TUM’s Champions League profile extended its influence by establishing a distinctive entrepreneurial ecosystem. Since 2011, UnternehmerTUM has managed its nearly $400 million venture capital fund, UVC Partners, setting a precedent in the academic world. While East Coast startup founders might reference MIT's The Engine, it's noteworthy that UVC Partners predates it by around five years. Despite The Engine's larger fund, surpassing $1 billion in 2023, both funds concentrate on seed and early-stage investments. In Munich, UVC Partners is crucial in mitigating the German bottleneck problem, where risk capital availability diminishes at each successive financing stage. TUM's focus on deep-tech startups, with one in ten founded at the university, pairs well with its Industry Engagement Program launched in 2023. This program partners with companies like BMW and Siemens, offering them customized access to the Academy for Innovators and Entrepreneurs for intrapreneurship training and consulting by TUM students and researchers. On the academic front, TUM's twelve Venture Labs provide specialized support, e.g., for artificial intelligence to biotechnology startups, akin to the interdisciplinary innovation initiatives fostered by organizations such as the MIT Media Lab.
It is fair to say that Cambridge startups significantly gain from local ties to large companies, exemplified by the MIT Industrial Liaison Program started in 1948, alongside over 50 accelerators in the Boston area and global connections like the Cambridge Venture Café. However, unlike Silicon Valley's, Cambridge's tech scene has a relatively short history, beginning about 65 years ago with the exit of the Lever Brothers soap factory, leading to a drop in city tax revenues. In response, Mayor Edward Crane leased the empty factory spaces to the MIT Corporation, catalyzing the transformation into a technology hub to boost city finances. Today, Kendall Square hosts around 2,000 companies, including leading biotech firms and over 600 startups. While Munich's scale is different, it boasts over 450 large companies with at least 250 employees and recently expanded startup opportunities with the 118k square feet Munich Urban Co-lab, initiated by UnternehmerTUM and the city's economic development agency. Support for TUM's initiatives also comes significantly from the Bavarian state government. Starting from the upcoming term, the university will soon charge tuition fees to new non-EU students, albeit much lower than those of prestigious U.S. institutions like MIT, Stanford, Berkeley, the Ivy League, or Stoxbridge in the United Kingdom. These additional funds will likely help TUM compete more closely with its Swiss counterpart, ETH Zurich, which benefits from higher public funding. Further legislative reforms to speed up hiring processes for top scholars. Highlighted by Berkeley economist Enrico Moretti, such initiatives not only enhance the academic landscape but also bolster the urban economy by generating five additional non-sector jobs for every high-tech position.
At MIT, one is well-versed in legislative efforts to boost innovation ecosystems. The Regional Entrepreneurship Acceleration Program (REAP) emphasizes the role of government policy, university initiatives, committed corporates, venture capitalists, and entrepreneurs. Munich's approach, encouraging collaboration among all key players, mirrors MIT's contribution to Greater Boston's economic growth, where, as of 2014, more than 30k startups founded by MIT graduates employed 4.6 million people and generated nearly two trillion USD, surpassing half of Germany's economy. On the one hand, replicating this success in Munich may seem exaggerated even with its GDP consistently above the national average. On the other hand, Kendall Square was not built in a day either, while TUM has clearly been proactive in unraveling the intricacies of its regional entrepreneurial ecosystem. With experience spanning over 80 regions from 30 countries since 2010, REAP understands that governments across the globe see this effort as a Rosetta Stone to translating innovative entrepreneurship into tangible economic growth. The absence of German regions from REAP may reflect the disability at which the public higher education sector forms strong ecosystem partnerships.
TUM stands out as an exception. Despite its size, with over 45,000 students as of 2023, making it the largest technical university in Germany, its demonstration is that even the biggest "tankers" in the higher education sector can navigate swiftly. This capability suggests that robust transformation is achievable within Germany's educational landscape. Observing the similarities between the logos of TUM and TIM’s home leads to an inevitable conclusion: Against all odds, Munich is on its way to establishing Germany’s first elite university for entrepreneurs and innovators. Its blueprint is obvious.
Said D. Werner is affiliate project lead at Professor Fiona Murray’s Lab for Innovation-Driven Entrepreneurship & Geopolitics. Before, he advised the Parliamentary State Secretary to the German Federal Ministry of Education and Research and spent a term as Vice President of Student Affairs at Zeppelin University Friedrichshafen in Germany.