What role is your AHK playing in the local startup scene? Have there been any changes since the last year of the tour? (increased interest also among smaller firms to become international?)

Maren Petry, AHK Greater China

The AHK Greater China has an innovation strategy department with dedicated staff focusing on China-wide innovation projects and events. We support innovation and R&D activities of German companies in China and connect startups with German corporates for specific projects. For example, the IGNITE event series focuses on best practice examples on how to tackle challenges in innovative ways and foster the exchange among member companies and with potential strategic partners, like startups. Additionally, we just published the innovation survey 2022 “Innovation from China Going Global” with nearly 400 German companies sharing their challenges, opportunities and approaches to R&D and innovation activities in China. We regularly participate in the Start.Up! Germany Tour and work on continuously expanding our network among key stakeholders and deepening our knowledge base on trends and developments in the Chinese innovation ecosystem.  

How has the pandemic impacted China’s startup scene over the last years?

With the country’s rigid response to COVID-19 in 2020 and China’s economy recovering fairly quickly, the impact of the pandemic on startups was initially less pronounced, compared to other countries. However, recent local outbreaks followed by severe lockdowns in startup hubs such as Shenzhen and Shanghai had major negative effects on the development of the local startup ecosystem. For instance, the number of newly founded startups declined by almost 80% compared to previous years during the lockdowns. While the rest of the world is gradually opening up and returning to business as usual, China continues to impose travel restrictions. This restricts startups in their internationalization opportunities, knowledge and expertise exchange with other startup ecosystems and participation in international startup competitions.

The decarbonization goals of the Chinese government (reducing carbon emissions from the peak level by 2030 and achieving carbon neutrality by 2060) provide many opportunities for foreign and Chinese companies of any size, incl. startups. Innovative enterprises play a crucial role in achieving these goals. Innovative products, services, technologies, and solutions which contribute to reducing emissions along the entire value chain are in high demand. Additionally, digitalization of processes in which startups and their solutions are an important factor, enhance efficiency and support the development of a more sustainable industry. A best practice example for German startups in the Chinese hydrogen industry is Hydrogenious Technologies, which cooperates with the Chinese company Broad-Ocean Motor. Their technology is used in hydrogen stations in China. A similar example which was part of our IGNITE event series is the Chinese startup Pan Support, which uses AI technology to analyze and optimize energy management in industrial plants, also for German companies in China. According to the Asian Development Bank, more than two thirds of new energy enterprises in China were founded after 2010, an additional indicator that startups do play a crucial role in achieving local decarbonization goals and benefit from supporting regulations and policies.

How are Chinese startups tackling the current crises in the global supply-chains?  

All companies which are sourcing goods internationally or supplying global markets with their hardware products are affected by supply-chain disruptions. Compared to startups, larger companies have often more rapidly the possibility to diversify their supply chains, building on pre-existing channels. On the other hand, startups which operate on a much smaller scale, are more flexible and innovative in finding solutions and can alter their business scope at a fast pace. Furthermore, many startups focus on digital products and services and are therefore less impacted by global supply-chain disruptions.

With the recent success of Chinese EV manufactures such as BYD, where do you see the future of startups in the mobility sector?

The startup environment in the automotive sector is flourishing. Including suppliers, over 600 startups are active in the electric vehicle space in China. The NEV manufacturers Nio and Xpeng gained international attention, as well as the supplier iFLYTEK (intelligent speech recognition and AI) and Momenta (autonomous driving). These startups reached unicorn status and shape developments not only in the Chinese automotive market, but also internationally. Several Chinese cities allow widespread testing of autonomous driving. For instance, Shenzhen is evaluating to open up the entire city for autonomous cars. Shenzhen is also famous for its fleet of 100% electric public busses and taxis. Self-driving cleaning vehicles or convenience stores on wheels in parks are a common encounter in daily life. The charging infrastructure for NEVs is often meeting the demand, especially in the cities. The possibility to gain practical experience and direct consumer feedback and involvement does provide advantages for Chinese startups in the mobility sector on a global scale.

How did you select the best startups in your country for the Start.up! Germany Tour?

We used social media marketing via WeChat to advertise the Start.up! Germany Tour among the Chinese startup ecosystem. This year we are planning on organizing an Innovation Night Startup Competition, as part of the Innovation Summit in Shenzhen with pre-events in several startup hotspots in China (all depending on pandemic situation and local regulations). All startups need to fulfill a certain set of requirements, and a jury made of experts and stakeholders of the Sino-German startup industry will vote for the best startups to participate in the tour.

Israel is enjoying an impeccable reputation as one of the start-up friendliest places on the globe. What do you think is Israel’s key to such success? What do you think needs improving?

There are several factors that have made Israel’s startup scene so successful. An innovation cycle based on synergies between market opportunities, government support, an open business culture, and a large ecosystem has enabled Israel’s rich ecosystem to thrive. This innovation cycle is made possible by the cultural aspects that shape the Israeli population such as multiculturalism, a willingness to take risks, ambition, and flat hierarchies, which all lead to a special readiness to act quickly and to “just go for it”.
Another important factor is “necessity”, as we would say in German “Notwendigkeit ist die Mutter der Erfindung” or in English “Necessity is the mother of innovation”. The State of Israel is relatively small, lacks natural resources, and is often confronted with water shortages that lead to food shortages. Innovative ideas are of utmost importance to ensure the population’s survival.
However, there is always room to grow. The country could benefit from furthering the incorporation of the Arab population into the high-tech sector as well as from the relaxation of work permits, which would allow more foreigners to enter the country, leading to even more growth and diversity.

Sharon Masury, AHK Israel

How would you describe the current trends in Israel’s startup scene?

Currently, Israel is focusing on the following trends:
Cybersecurity, AI & automation, digital health, and climate tech.
Cybersecurity has always been an important field in Israel due to its necessity. AI & Automation are specifically focusing on the robotics field. The digital health sector has always been a topic of focus; however, the pandemic situation has strengthened it specifically in the telemedicine field.
In the climate tech sector hydrogen is becoming a focus topic. With startups such as H2Pro, the companies are trying to find new ways to produce, to store and to distribute hydrogen.

Given this great reputation and conditions, what makes Germany such an
attractive destination for Israeli Startups?

Germany is one of the leading countries in the European economic area and has
the largest market within the European Union. This is accompanied by a large
industrial sector that is known for its diversity. Furthermore, the central location
of the Federal Republic of Germany with its progressive and economically strong
neighboring countries such as France is also very lucrative from a geographical
point of view. Especially the membership in the European Union makes further
markets more easily accessible and thus holds great potential for expansion.
Besides that, the pressure in Germany and Europe to keep up in the areas of
digitization and innovation is high. High-tech companies from Israel can
counteract this pressure with innovative ideas and solutions and thus offer one
of the best possible cooperation. Israelis, on the other hand, can learn from
German organizational talent how to scale processes sustainably and develop
long-term strategies.
The CEO of our AHK Israel, Grisha Alroi-Arloser, summed it up very well:
Israelis show Germans how to fly and Germans show Israelis how to land safely
and smoothly.

How do you prepare your startups for the tour and Germany?

It is important to sensitize Israeli startups to the intercultural differences that
exist between the two populations.
While work and private life merge in Israel, Germans prefer a strict separation of
these spheres. This includes very simple issues such as the formal tone and the
necessary politeness in everyday business life, which in Germany means, for
example, not to address a potential business partner by his first name or to be
punctual at appointments.
Furthermore, Israeli startups need to be prepared for the fact that processes in
Germany are more organized, thus things are moving slower.
We do recommend our startups to participate in the well-organized pre-startup
program of the Start.up! Germany Tour as it offers a very good opportunity to get
business insights from German companies about the German market and its
business culture.

What do you think is the main advantage of the tour and what would you change to make it even better?

One of the most important advantages is certainly the internationality of the tour and with it the opportunity to get to know not only German companies but also startups from all over the world. Thus, the tour offers an amazing platform to make new contacts and learn about new trends and ways of thinking.
The only thing we would change to improve the tour, would be to allow even more startups the chance to participate in person and not just virtually.

With Chile as one of the top destinations for startups, most certainly in South America, what is Chile’s secret? And what is the secret for his transformation to a popular destination in Latin America?

Thilo Schaller, AHK Chile

In what way are your selected startups reflecting the best aspects of Chile’s growing startup scene?

The Chilean start-ups, just like the big companies, are looking for answers to the great challenges of our world today and in this context this year the focus on solutions that deal with the environmental issues

In this way, the selected startups are reflecting this aspect and offering solutions by collecting data in a wide variety of ways and using computer programs and artificial intelligence to predict occurrences and help companies become more sustainable.

What do you think makes startups successful in the international market?

First of all, the startup should be established and successful in the local market before thinking about an international expansion.

Furthermore, it's important that the startup has developed a scalable business model with an international approach.

In addition, it is vital also to understand and to know the culture and its differences where your new market is located.

And it is very helpful to find an experienced local partner with proven expertise in the market you are targeting, and the startup should define and monitor its KPIs.

What are Chile’s startups most keen on in Germany and this tour?

The German market is one of the most popular European economies and the region of North Rhine-Westphalia, as a leading economic region, is generally very attractive for the expansion of foreign start-ups. Most of the interest of the Chilean startups lies in getting to know potential investors and partners, who make it easier for them to enter the German market.