or a successful “hidden champion” where the salary and employment are secure? The lack of venture capital and concern about the risks of entrepreneurship may often persuade a young person to make the conservative choice.

The federal government understands and wants to change this situation, he said, and knows that to do so it must provide more incentives or competitive support for those interested in entrepreneurship. Some effective programs have been implemented for this purpose, he said, and they are essential in avoiding a continuation of overly conservative behavior. Many incentive projects have received initial funding, he said, and the next step is to sustaining their funding.

Despite the lack of an established venture capital industry, Mr. Terhart said, some new projects are presenting opportunities for raising funds as well. For example, many family businesses—even though they are not included in official figures—and branches of larger companies are strongly dedicated to forming or joining venture funds to support young or beginning firms. In addition, foreign funds, such as some French funds as well as some non-European funds, show interest in investing larger amounts of money in private equity or venture capital funds. “We are seeing that, as a whole, there is a greater enthusiasm in approaching this matter in earnest,” said Mr. Terhart, starting with early steps taken by the Ministry of Science and Technology and the Ministry of Economy.

“These are demonstrating today,” he concluded, “a willingness to create the conditions necessary for the establishment of a venture capital industry. We see that our own equity industries are now stepping into the breach, as they have seen that the banking industry—the old players—can no longer do so.”

THE CLASH OF INNOVATION CULTURES:
THE UNITED STATES AND GERMANY

Eran Davidson
Managing Partner
Hasso Plattner Ventures

Mr. Davidson introduced himself as an Israeli who had making venture capital investments for 16 years, the past six of them from his current base in Berlin. Having invested in Israeli, American, and German companies in many fields of technology, he said he would present some comparisons among the investment and entrepreneurial cultures of the different countries, especially the United States and Germany.

He said he had chosen the title of his short presentation, “The Clash of Innovation Cultures,” because of a peculiar situation. He said that “Germany is a funny country in many ways, especially when it comes to innovations,” because it invents so much and profits from its inventions so little. He showed a chart of fundamental inventions made in Germany, including the light bulb in 1854, the telephone in 1859, the television in 1930, the maglev train in 1934, the computer



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