Smartphone users can access the mobile version of the ESMT European School of Management and Technology website at www.esmt.org/en/mobile. The streamlined website offers an overview of the international business school, its programs, and faculty. With the launch of the mobile website, ESMT has responded to the growing trend of mobile internet access, especially among MBA applicants.

Social media also continues to grow in importance as a source of information. For more than three years ESMT has interacted with those interested in the school on its Facebook page www.facebook.com/ESMT.org. MBA candidates increasingly use social platforms for contact. Since June 2011 more than 15 percent of all MBA-applicants learned about ESMT via social media. To date ESMT has more than 5,800 fans on Facebook.

For several years ESMT has also published videos on its YouTube channel www.youtube.com/esmtberlin. These videos present current events, short interviews with international CEOs, and information about faculty members, alumni, and students. ESMT is also present on the professional networking sites LinkedIn at www.linkedin.com/company/esmt and XING at www.xing.com/companies/esmt.

Press contact
Ulrike Schwarzberg, +49 (0)30 21231-1066, ulrike.schwarzberg@esmt.org
Martha Ihlbrock, +49 (0)30 21 231-1043, martha.ihlbrock@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA programs, as well as executive education. ESMT focuses on three main topics: responsible and sustainable leadership, European competitiveness, and the management of technology. Additionally the business school offers an interdisciplinary platform for discourse between politics, business, and academia. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

ESMT European School of Management and Technology has welcomed the full-time MBA Class of 2012 to campus this week. This year’s MBA class at the international business school in Berlin is made up of 27 men and 14 women from 24 countries. The students are the most diverse group in the school’s history, coming from countries such as Argentina, Belgium, Colombia, Germany, India, Israel, Japan, Mexico, Peru, Russia, South Africa, South Korea, Turkey, Taiwan, and the United States, among others. This year’s MBA candidates are on average 29 years old and have six years of work experience.

ESMT has also awarded five Kofi Annan Fellowships to students from Armenia, Egypt, Ghana, Nepal, and Zimbabwe this year. The full-tuition scholarship is offered to outstanding candidates from a developing country who are committed to the advancement of the regional economy when returning to their home country. Ernest Kwame Gyimah, Kofi Annan Fellow from Ghana, said, “I am excited to start the MBA program at ESMT together with so many diverse and talented people. As a Kofi Annan Fellow I hope to have a share in the future development of my home region after graduating.” Additionally, four students have been nominated by their employers, Allianz, Daimler, and ThyssenKrupp.

“It is fantastic for us to be able to bring together so much top entrepreneurial talent here in Berlin. I am particularly happy that we have increased the level of female participation on the program this year,” commented Nick Barniville, Director of the MBA at ESMT.
   
ESMT President Jörg Rocholl explained, “The record size and diversity of the new MBA class mirrors the growing reputation of ESMT. ESMT is committed to educating global responsible leaders and to supporting these leaders in their career development.”
 
Press contact
Martha Ihlbrock, +49 (0)30 21 231-1043, martha.ihlbrock@esmt.org
Ulrike Schwarzberg, +49 (0)30 21231-1066, ulrike.schwarzberg@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA programs, as well as executive education. ESMT focuses on three main topics: responsible and sustainable leadership, European competitiveness, and the management of technology. Additionally the business school offers an interdisciplinary platform for discourse between politics, business, and academia. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne. www.esmt.org

The ESMT Innovation Index 2010 analyzes the innovation of 15 major European energy suppliers. The index consists of three differently weighted sub-indices, which take into account research, productivity, and sustainability. RWE and Electricité de France (EDF) top the ESMT Innovation Index 2010 because of their large investments in research and development. They are followed by Iberdrola, GDF-Suez, and Energias de Portugal (EDP), companies that additionally performed well in the sustainability sub-index.

The independent academic study by Christoph Burger and Dr. Jens Weinmann of ESMT European School of Management and Technology shows that innovation activities increased substantially between 2007 and 2010.
“Over the last four years the combined R&D budgets of the companies have grown by 40 percent to more than 1.5 billion euros,” comments Christoph Burger, energy expert and managing director of ESMT Customized Solutions. According to the study, renewable energy supplies such as wind, biomass, and solar power have more than doubled during the period examined.  

The research sub-index, based upon the most important component of a successful innovation strategy, accounts for 50 percent of the overall index. It combines the relative and absolute R&D importance, research diversity, and the number of new patents. Productivity and sustainability each have a weight of 25 percent in the ESMT Innovation Index 2010. The productivity sub-index contains the earnings from electricity generation and per employee, while the sustainability sub-index concentrates on the share of renewable energies and the electricity output per ton of carbon dioxide emissions. RWE’s leading position in the research sub-index pushed the company to the top of the entire ranking, with 70.6 out of 100 total points. EDF follows with a score of 57.7 and compensates for its poor showing in the productivity sub-index through a high ranking in the research sub-index.

You may download the study on the right-hand side of this page.

Press contact
Martha Ihlbrock, +49 (0)30 21 231-1043, martha.ihlbrock@esmt.org
Ulrike Schwarzberg, +49 (0)30 21231-1066, ulrike.schwarzberg@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA programs, as well as executive education. ESMT focuses on three main topics: responsible and sustainable leadership, European competitiveness, and the management of technology. Additionally the business school offers an interdisciplinary platform for discourse between politics, business, and academia. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne. www.esmt.org

The new book Counter Strategies in Global Markets, by ESMT Dean of Executive Education Olaf Ploetner, examines the situation of technology-based companies on global B2B markets. New customer segments in emerging markets and developing low-cost competitors have changed the competitive environment and challenged established suppliers. In order to defend their leading position, many companies like Siemens, GE, Alstom, Mitsubishi need to think beyond their established strategies. They may produce no frills versions of their advanced premium goods to satisfy their new customers in Asia and/or market barriers by using their experience to develop complex service solutions that cannot be copied. Regarding the changes in product development, pricing, branding, sales force management, and company culture that inevitably follow, Counter Strategies draws a blueprint for those on global B2B companies who wish to continue prospering there.

Praise for the book has come from CEOs of technology companies. Peter Loescher, President and Chief Executive Officer, Siemens AG, said, “This book cuts right to the leading-edge strategies of technology companies on B2B markets – highly recommended reading for all managers from this field.”

More information about the book
Olaf Ploetner
Counter Strategies in Global Markets
ISBN 978-0230301313
Palgrave Macmillan

About the author
Olaf Ploetner is a member of the faculty and dean of executive education at ESMT European School of Management and Technology. He is a visiting professor at Darden School of Business, ESCP, and Fudan University in Shanghai. Olaf brings with him experience as a consultant at The Boston Consulting Group and director at Siemens AG. His publications focus on competitive strategy and marketing management in technology based B2B markets.

Press contact
Martha Ihlbrock, +49 (0)30 21231-1043, martha.ihlbrock@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA pro-grams, as well as executive education. ESMT focuses on three main topics: responsible and sustainable leader-ship, European competitiveness, and the management of technology. Additionally the business school offers an interdisciplinary platform for discourse between politics, business, and academia. ESMT is a state-accredited
private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne. www.esmt.org

Jörg Rocholl comments on the EU summit (in German, starting at 1:18).

An article on the new State Secretaries in Berlin describing Farhad Dilmaghani's appointment (in German).

An article on a case study on Lady Gaga by Harvard Business School mentions the case study on Lady Gaga published earlier by Martin Kupp and his co-authors.

• Applicants with a strong quantitative background and at least three years’ work experience in a company with a technological focus
• Citizens of Central and Eastern Europe
• Candidates from Russia with experience in the energy sector
• Women from all sectors with exceptionally strong quantitative skills
• Applicants from Europe, Africa, the Middle East, and East Asia , and the Americas for regional, merit-based partial scholarships

On July 6-7, 2011, ESMT European School of Management and Technology is holding its 4th Annual Forum. ESMT is providing a platform for international opinion leaders from business, academia, and politics to debate issues concerning "The Global Race for Competitive Edge." The focus of this year’s conference is on topics such as remaining competitive, the global race for talent, challenges faced by technology-based industries, and international approaches to electric mobility.

On the first day of the forum, CEOs of leading global companies will discuss with renowned scientists the role of e-mobility in the coming decades and the future of the global power supply. Michael Diekmann (Allianz) will open the ESMT Annual Forum, followed by keynote speaker Henning Kagermann (acatech). Soumitra Dutta (INSEAD), Michel Gardel (Toyota Motor Europe), Jürgen Großmann (RWE), Henning Kagermann, and Levin Zhu (China International Capital Corporation) will then debate on the Cornerstone Panel.

"With its 4th Annual Forum, ESMT is showing that having a competitive advantage and reaching sustainable growth are not mutually exclusive but are actually inter-dependent," said Michael Diekmann, Chairman of the Board of Management, Allianz SE, and Chairman of the ESMT Foundation Board of Trustees. “Smart resource management and innovation are key to success.”

Güler Sabancı, Chairman and Managing Director of Sabancı Holding, will receive the ESMT Responsible Leadership Award, presented for the second time this year. Josef Ackermann, CEO of Deutsche Bank AG and member of the ESMT Foundation Board of Trustees, stated, "As a highly successful business woman with a deep commitment to society and her country, Güler Sabancı serves as a role model for others. I am delighted that her achievements are being recognized today with this award." 

Sabancı Holding, Turkey’s leading industrial and financial multi-business firm with more than 50,000 employees and operations in 18 countries, invests heavily in corporate responsibility programs focusing on sustainable, competitive, and environmentally-sound energy policies. As Head of the Sabancı Foundation and Sabancı University, Güler Sabancı is committed to society. “Giving back to and supporting the community has always been an important part of our company’s philosophy,” explained Güler Sabancı. "As ESMT has the same commitment in educating future leaders, it is a distinguished honor for me to receive this award from the international business school."

ESMT Annual Forum website

Press contact
Farhad Dilmaghani, +49 (0) 30 21231-1042, farhad.dilmaghani@esmt.org
Ulrike Schwarzberg, +49 (0) 30 21231-1066, ulrike.schwarzberg@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The business school works closely together with ESMT Competition Analysis, which provides research-oriented consulting services in the areas of competition and regulation. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

ESMT European School of Management and Technology vergibt in Zusammenarbeit mit dem Tagesspiegel ein Voll-Stipendium an einen Bewerber aus Deutschland mit Migrationshintergrund. DeutschPlus – Initiative für eine plurale Republik unterstützt die Ausschreibung. Das Stipendium wird für das Vollzeit-MBA-Programm vergeben, das im Januar 2012 beginnt. Bewerbungsschluss ist der 15. November 2011. Das Studium findet in englischer Sprache statt.

ESMT ist dem Diversity-Gedanken in besonderem Maße verpflichtet. Dies zeigt sich auch in der Zusammensetzung von Fakultät und Studentenschaft. Die 39 Studenten der aktuellen Vollzeit-MBA-Klasse kommen aus 18 verschiedenen Ländern. Über 80 Prozent der Fakultätsmitglieder haben einen internationalen Hintergrund. Da Führungskräfte mit Migrationshintergrund in der deutschen Wirtschaft noch immer unterrepräsentiert sind, möchten ESMT und der Tagesspiegel mit dem Stipendium einen Beitrag zur qualifizierten Ausbildung dieser Bevölkerungsgruppe leisten.

"Deutschland und besonders Berlin werden auch von Menschen mit Migrationshintergrund geprägt. Wir finden es wichtig, dass sich diese Vielfalt zunehmend in den Führungsetagen widerspiegelt und wollen dafür unseren Beitrag leisten", erklärten die Tagesspiegel-Chefredakteure Stephan-Andreas Casdorff und Lorenz Maroldt.

Farhad Dilmaghani, Director of Corporate Communications, Marketing and Governmental Relations an der ESMT fügt hinzu: "ESMT hat in der Ausbildung einen starken Fokus darauf, herausragende Talente in Deutschland und international zu fördern. Insbesondere die Zahl von Studierenden mit Migrationsgeschichte wollen wir weiter erhöhen. Deswegen freuen wir uns, dass der Tagesspiegel und DeutschPlus uns unterstützen, das Stipendium deutschlandweit bekannt zu machen."

Rana Aydin, Leiterin des Bereichs Nachwuchsförderung bei DeutschPlus bekräftigt: "Eines unserer zwei Hauptziele bei DeutschPlus ist, die sogenannte Repräsentationslücke zu schließen. Wir haben rund 20% Menschen mit Migrationshintergrund in Deutschland, allerdings spiegelt sich dieser Anteil nur zu einem Bruchteil in guten Positionen in der Wirtschaft, Verwaltung und den Medien wider."

Bewerber für das Stipendium müssen die allgemeinen Zulassungsvoraussetzungen der ESMT erfüllen und zusätzlich ein kurzes Essay verfassen, in dem sie erklären, inwieweit sie sich in ihrem bisherigen persönlichen oder beruflichen Lebensweg mit dem Diversity-Gedanken auseinandergesetzt haben.

Informationen für Bewerber:
Boban Sulic, +49 (0)30 21231-1405, mba@esmt.org oder hier

Pressekontakt ESMT:
Ulrike Schwarzberg, +49 (0) 30 21231-1066, ulrike.schwarzberg@esmt.org   

Pressekontakt Der Tagesspiegel:
Emmy Börner, +49 (0) 30 290 21-11004, pressestelle@tagesspiegel.de

Über ESMT
ESMT European School of Management and Technology wurde im Oktober 2002 auf Initiative von 25 führenden globalen Unternehmen und Verbänden gegründet. Die internationale Business School bietet Vollzeit- und berufsbegleitende Executive MBA-Programme, Management-Weiterbildung sowie maßgeschneiderte Programme für Unternehmen und forschungsbasierte Beratung. Die Hochschule steht in enger Zusammenarbeit mit ESMT Competition Analysis, die kundenspezifische Beratungen und Untersuchungen für die Bereiche Wettbewerbspolitik und Regulierung anbietet. ESMT ist eine staatlich anerkannte private wissenschaftliche Hochschule mit Sitz in Berlin und einem zweiten Campus in Schloss Gracht bei Köln. www.esmt.org

Über Der Tagesspiegel
Der Tagesspiegel liefert täglich Hintergründe und Analysen aus Politik, Wirtschaft und Kultur.
Gründliche Recherchen, liberale Berichterstattung und kritische Kommentare überzeugen täglich fast 320.000 Leser (Leseranalyse Berlin 2010)*. Über 40 Prozent der Entscheidungsträger (Entscheidungsträger-Analyse Berlin 2007)* in der Hauptstadtregion nutzen den Tagesspiegel. Dem Leitspruch „Rerum cognoscere causas“, was so viel bedeutet wie „Den Dingen auf den Grund gehen“, bleibt der Tagesspiegel seit über 60 Jahren treu. Als Zeitung aus der Hauptstadt ist er im In- und Ausland bekannt und zählt zu den meistzitierten Zeitungen Deutschlands. www.tagesspiegel.de

* Gesamtbelegung mit Potsdamer Neueste Nachrichten

Über DeutschPlus – Initiative für eine plurale Republik
DeutschPlus ist eine junge Initiative von Menschen mit und ohne Migrationshintergrund, die für ein plurales und zukunftsfähiges Deutschland eintreten. Dazu gehört der Aufbau wissenschaftsbasierter Beratung zur Weiterentwicklung des gesellschaftlichen Diskurses über Migrationsthemen und Vielfalt ebenso wie Nachwuchsförderung in den Bereichen Wirtschaft, öffentlicher Sektor und Medien. Die Mitglieder von DeutschPlus kommen aus der Wissenschaft, Wirtschaft, Kultur, Medien und der Verwaltung.
www.deutsch-plus.de

Lars-Hendrik Röller commented, “I am looking forward to my new position as Chief Economic Policy Advisor to Chancellor Merkel. At the same time I am proud of how far ESMT has come in the past few years. I am sure that ESMT will continue to grow in its role as a research-driven and international business school in Germany.”

The boards of ESMT will decide on the successor of Lars-Hendrik Röller in the near future.

Link to biography

Download photos

Press contact
Farhad Dilmaghani, +49 (0) 30 21231-1042, farhad.dilmaghani@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The business school works closely together with ESMT Competition Analysis, which provides research-oriented consulting services in the areas of competition and regulation. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

ESMT European School of Management and Technology in Berlin has been placed among the ten best business schools in Europe in this year’s Financial Times Executive Education ranking. In a global comparison, ESMT ranked 17th overall and shares this place with London Business School. For ESMT this is an improvement of ten places when compared to last year’s place of 27. ESMT is the only business school based in Germany in the ranking.

The Financial Times Executive Education ranking evaluates two areas, customized and open enrollment programs. In the area of open enrollment, ESMT moved up six places and ranked 15th worldwide and 7th among European business schools. Customized programs at ESMT jumped 11 places and placed 23rd worldwide and 11th in Europe.

"ESMT is on its way to the top in Europe," said Lars-Hendrik Röller, President of ESMT.

Olaf Plötner, Dean of Executive Education, added, "Our constant interaction with participants, our program design, and our internationality were important factors in our positive performance."

The ranking found the diversity of the faculty and the follow-up to seminars to be especially strong at ESMT. This included factors such as excellent networking opportunities and support in the workplace.  In addition, ESMT open enrollment programs excelled in the areas of teaching materials and repeat business and growth. Customized programs did particularly well in course design, most notably with flexible course structures and the use of business experts as lecturers.

"ESMT is successfully following the objectives set by its founders," said Dr. Clemens Börsig, Chairman of the Supervisory Board, ESMT and Chairman of the Supervisory Board, Deutsche Bank AG. "In the area of executive education, ESMT has already delivered on its goal of being ‘top ten in ten years’."

Link to Financial Times rankings: http://rankings.ft.com/businessschoolrankings/rankings

Press contact
Farhad Dilmaghani, +49 (0) 30 21231-1042, farhad.dilmaghani@esmt.org
Martha Ihlbrock, +49 (0) 30 21231-1043, martha.ihlbrock@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers full-time MBA and executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The business school works closely together with ESMT Competition Analysis, which provides research-oriented consulting services in the areas of competition and regulation. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

Matthew Bothner, PhD, has been named the holder of the Deutsche Telekom Chair in Leadership and HR Development at ESMT European School of Management and Technology in Berlin. Before joining Cornell University in Ithaca, New York as a visiting associate professor in 2010, he was Associate Professor of Organizations and Strategy at Chicago Booth School of Business. ESMT has also announced the appointment of Professor Konstantin Korotov as Director of the Center for Leadership Development Research (CLDR) at ESMT.

ESMT Associate Dean of Faculty Jörg Rocholl is looking forward to working with the newest recruit. He said, "Matthew Bothner’s extensive research and expertise in organizational and social structures will further strengthen ESMT’s focus on leadership and human resource development."

"This named chair demonstrates Deutsche Telekom’s strong support of ESMT," commented Thomas Sattelberger, Member of the Board and Chief Human Resources Officer, Deutsche Telekom AG. "With Matthew Bothner, ESMT has recruited a top scholar who will really complement the already international faculty."

Matthew Bothner received his PhD in sociology with distinction from Columbia University, where he also received a MA and M.Phil.  His research focuses on social status and market competition, crowding and risk taking in tournaments, and factors affecting technology diffusion. He has also done extensive research in social network analysis.  His papers have appeared in Administrative Science Quarterly, American Journal of Sociology, and Management Science.  Matthew Bothner has received many honors, grants, and awards, including the Faculty Excellence Award for Teaching in 2004 and 2008 and the Hillel J. Einhorn Excellence in Teaching Award in 2011 from the University of Chicago Booth School of Business.  

Taking over the position as director of the CLDR, Konstantin Korotov, who began at ESMT in August 2005, was also promoted to associate professor with tenure. ESMT President Lars-Hendrik Röller thanked Konstantin Korotov for his outstanding dedication to the advancement of the leadership area at ESMT. He said, "We are convinced that Konstantin is the right person to lead the center in its next stage of development."

Press contact
Farhad Dilmaghani, +49 (0) 30 21231-1042, farhad.dilmaghani@esmt.org
Martha Ihlbrock, +49 (0)30 21 231-1043, martha.ihlbrock@esmt.org 

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The business school works closely together with ESMT Competition Analysis, which provides research-oriented consulting services in the areas of competition and regulation. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne. 

Le Figaro mentions ESMT to be a high-leveled business school with international students participating in the sustainability and technology management tracks of the MBA program.

European business schools are increasingly looking to tap into the potential of the Indonesian market and recruit more students for their MBA programs. Rick Doyle, marketing manager for MBA programs at the European School of Management and Technology in Berlin, said one of the benefits of studying in Europe was the international atmosphere.

ESMT European School of Management and Technology in Berlin has bid farewell to its Founding Dean Professor Dr. Wulff Plinke. His foresight and dedication, along with the trust business leaders placed in him, led to the founding of the private business school ESMT in 2002. Wulff Plinke’s service to ESMT will continue in his new role as chairman of the Freunde und Förderer der ESMT.

"Wulff has dedicated more than a decade to the visionary plan to establish an international business school in Germany and to thereby close a gap in the country’s educational landscape," said Michael Diekmann, Chairman of the Board of Management, Allianz SE, and Chairman of the ESMT Foundation Board of Trustees.

ESMT President Lars-Hendrik Röller added, “Wulff Plinke has played a decisive part in the founding and growth of ESMT, and we will miss his untiring energy and dedication. We are looking forward to his continued leadership within the Freunde und Förderer.”

Wulff Plinke worked productively for 40 years in higher education. Having received his doctoral degree and habilitation from Ruhr Universität Bochum, Wulff Plinke served as a professor at Universität Hannover, Freie Universität Berlin, and Humboldt Universität zu Berlin, where he was also dean of the School of Business and Economics from 1993 to 1996. The sixty-nine-year-old Wulff Plinke took up the position of dean of ESMT at its establishment in 2002.  

"It has been my privilege to help build and lead ESMT from its inception," said retiring dean Wulff Plinke. "Throughout this time, I have remained committed to the idea upon which ESMT was founded – connecting entrepreneurial leaders who think globally, act responsibly and respect the individual."

Press contact
Martha Ihlbrock, +49 (0)30 21231-1043, martha.ihlbrock@esmt.org
Ulrike Schwarzberg, +49 (0)30 21231-1066, ulrike.schwarzberg@esmt.org   

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The business school works closely together with ESMT Competition Analysis, which provides research-oriented consulting services in the areas of competition and regulation. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

The international business school in Germany, ESMT European School of Management and Technology, has issued its R&D Report 2010 demonstrating that the ESMT research output in 2010 had a significant impact at both academic and applied levels. ESMT faculty members produced eight books and 18 peer-reviewed articles in influential international academic journals, placing special emphasis on the management of technology, corporate responsibility, leadership, public policy, and financial economics. ESMT also published several key papers dealing with European competition policy, thereby working closely together with ESMT Competition Analysis.

In addition, more than 46 research seminars took place at ESMT last year. Speakers came from prestigious international institutions such as MIT, Stanford University, and London School of Economics, attesting to ESMT’s growing international reputation. ESMT faculty was invited to present its research results at 86 international seminars and conferences. All of these presentations offered new academic insight spanning subjects from the fields of decision-making, economics, finance, and leadership.

ESMT has also further developed the area of research grants and received new and continued funding from the Peter Curtius Foundation, DFG-Deutsche Forschungsgemeinschaft, Fonds National de la Recherche Luxembourg, and the Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety.

The business school’s Center for Leadership Development Research (CLDR) continued to grow, holding its second coaching colloquium in December and co-organizing the 3rd International Coaching Research Forum together with the Institute of Coaching at Harvard Medical School.

Once again ESMT was active in the Berlin Doctoral Program in Economics & Management Science (BDPEMS) and increased its participation by delivering several courses in behavioral economics, management, marketing, and statistics, which were held at ESMT.  

"Research at ESMT in 2010 has been very productive. We are looking forward to further intensifying our research output as the expansion of our faculty continues," said Catalina Stefanescu-Cuntze, ESMT Director of Research.

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The business school works closely together with ESMT Competition Analysis, which provides research-oriented consulting services in the areas of competition and regulation. ESMT is a state-accredited private business school based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

Press contact
Martha Ihlbrock, +49 (0)30 21 231-1043, martha.ihlbrock@esmt.org
Ulrike Schwarzberg, +49 (0)30 21231-1066, ulrike.schwarzberg@esmt.org

ESMT European School of Management and Technology has engaged two new professors for the business school based in Berlin, Germany, strengthening its expertise in the management of technology. Sustainable business and management of technology are the two-tracked focus of the updated Full-time MBA curriculum at ESMT. Linus Dahlander and Stefan Wagner, who have both joined as assistant professors, research and teach in the areas of innovation, strategy, and entrepreneurship. ESMT’s international faculty now numbers 33 members from 20 countries.

A native of Sweden, Linus Dahlander completed post doc research at Stanford University in 2010, having received his PhD in technology management and economics at the Chalmers University of Technology, Gothenburg. He was previously assistant professor at Imperial College Business School in London. Linus Dahlander’s broad range of publications includes journal articles on innovation and communities. He has teaching experience in the areas of innovation management and entrepreneurship.

Stefan Wagner joined ESMT from Ludwig-Maximilians-University LMU in Munich where he was an assistant professor. The German native completed his Habilitation (Dr. habil.) at LMU in 2010. Stefan Wagner’s international experience includes working as a visiting scholar at Melbourne Business School and Boston University. He was also a Fulbright scholar at UCLA’s Graduate School of Economics. He has researched and published extensively on innovation and patents and teaches not only in these areas, but also entrepreneurship and statistics. 

ESMT Associate Dean of Faculty Jörg Rocholl commented, "Stefan and Linus are excellent additions to ESMT’s diverse, international faculty. With their combined expertise and experience, they will support us in our continuous focus on the management of technology."

Press contact
Martha Ihlbrock, +49 (0)30 21 231-1043, martha.ihlbrock@esmt.org
Ulrike Schwarzberg, +49 (0)30 21231-1066, ulrike.schwarzberg@esmt.org

Want to buy a money-losing bank with a damaged business model in an overcrowded market? Neither, it seems, do many other people.

Jörg Rocholl appeared as studio guest in the business magazine and commented the economic situation in Germany and Europe. The interview starts at 09:43. 

In 2011 ESMT is offering six new open enrollment programs, giving fresh perspectives to significant trends. The program Leading through Crises provides tools to successfully master critical situations. Strategy in Practice gives a foundation for making long-term decisions and handling resources and relationships. Power Negotiations is also new, as is the seminar Entscheidungs- und Verhandlungstechniken being offered by USW Netzwerk, the division of ESMT which provides executive education in German.

ESMT continues to place emphasis on diversity with Mastering Cultural Differences in Moscow. The program offers a basis for intercultural cooperation in an international business environment. The management of technology also remains an important focus for ESMT. The new program Business and Economics for Engineers and Scientists complements the well-established programs Bringing Technology to Market and Managing Technology for Innovation.

The new open enrollment programs and customized programs offered at ESMT take customer needs into account. In 2010 numerous companies took part for the first time in the customized programs of ESMT. These new customers included Hitachi in technology-based industries, Merck AG in the area of life sciences and Talanx AG in financial services. Thanks to its expertise in telecommunication, transport, and utilities, ESMT also welcomed the energy company EnBW AG as a new customer. In 2011 ESMT plans to continue the expansion of its customer base. USW Netzwerk expects more business with medium-sized companies, as economic growth in Germany continues.

"Our close contact to leading international companies allows us to continually adapt our programs to new trends and the interests of our customers. This success is mirrored by the increasing demand for our programs," said Olaf Plötner, Associate Dean of Executive Education, ESMT and Managing Director, ESMT Customized Solutions.

Press contact
Martha Ihlbrock, Tel.: +49 (0)30 21231-1043, martha.ihlbrock@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

ESMT European School of Management and Technology is hosting the 3rd International Coaching Research Forum "The Future of Coaching in 3-D" in Berlin December 13-14, 2010. The Center for Leadership Development Research at ESMT (CLDR), in cooperation with the Institute of Coaching at McLean Hospital, a Harvard Medical School Affiliate, is bringing over 20 international experts and academics from around the world to the ESMT campus.

The forum gives leading professors, executive coaches, and HR practitioners a platform to discuss the rapidly growing industry of executive coaching and the scientific investigation of coaching principles, processes, and results. Goal is to define the future intellectual agenda in this area.
The International Coaching Research Forum will also examine important cross-cultural and global challenges. The participants will discuss taboos in and around coaching, the selection of coaches, and the effectiveness of coaching interventions. Manfred Kets des Vries (INSEAD and ESMT), Laura Guillén (ESMT), Konstantin Korotov (ESMT) and Elizabeth Florent-Treacy (INSEAD) will discuss selected findings of their recently published book "The Coaching Kaleidoscope".  Experts attending the forum also include Carol Kauffman (Institute of Coaching at Harvard), Susan David (Institute of Coaching at Harvard), Michael Cavanagh (University of Sydney), Polly Parker (University of Queensland), as well as Mary Wayne Bush (The Foundation of Coaching) and Elisabet Engellau (INSEAD).

Konstantin Korotov, ESMT associate professor and co-organizer of the event, said, "This forum gives outstanding academics and practitioners an excellent opportunity to link their knowledge and to collectively develop new standards for coaching. The Center of Leadership Development Research at ESMT will present its newest research results."

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.

About CLDR
The ESMT Center for Leadership Development Research (CLDR) brings together academics, educators, and practitioners in the field of leadership development with the aim to enhance our understanding of leadership development in modern organizations.  The CLDR is particularly interested in studying how companies support their employees in making transitions to leader roles, how people embrace or create opportunities for learning to lead, and how leadership in organizations evolves.

ESMT European School of Management and Technology is still accepting applications for its full-time MBA program beginning January 2011 in Berlin. Several merit-based scholarships remain available. These scholarships are provided by corporate sponsors of ESMT to further increase diversity in the classroom and to attract specific talent to Germany.

Specific opportunities for financial support are still available for candidates who have the following profiles:

  - Strong quantitative academic background and at least three years’ experience in technology operations/technology sales
  - Citizen of a BRIC state with an academic background in energy/engineering, telecoms or manufacturing and professional experience in MIS or R&D
  - Citizens from Central and Eastern Europe: scholarships provided by the Bennigsen-Foerder-Stiftung
  - Engineering degree with experience in the solar energy/photovoltaic sector
  - First or second generation immigrants to Germany with a first degree and at least three years’ professional experience
  - Women from all sectors with exceptionally strong quantitative skills
  - Applicants from areas such as Africa, the Middle East, and Asia for further regional, merit-based partial scholarships

As The Economist has recognized, students at "Berlin's ESMT benefit from exposure to Germany's successful social market economy through the close connection of its founders—25 of the country's leading companies including Allianz, BMW and Siemens." MBA Program Director Nick Barniville says, "We have experienced exceptional support from our corporate sponsors this year and are delighted to be able to provide a diverse range of scholarships to study in Berlin. The German economy currently offers tremendous opportunities for graduates. The scarcity of qualified talent translates to a bright future for successful MBA graduates."

All scholarship applicants must take the Graduate Management Admission Test (GMAT). All accepted applicants to the ESMT Full-time MBA program are screened for scholarship selection. Applications will be accepted until early December 2010.

More information for applicants
Stephanie Kluth, Tel.: +49(0)30 21231-1400, stephanie.kluth@esmt.org
www.esmt.org/info/scholarships

Press contact
Martha Ihlbrock, Tel.: +49 (0)30 21231-1043, martha.ihlbrock@esmt.org

Thirty-one participants commenced the Executive MBA (EMBA) at ESMT European School of Management and Technology today in Berlin. With students representing 13 different countries, this is the most international class since the inauguration of the first EMBA program at ESMT in 2007. The class is made up of participants from several European countries, U.S., Brazil, China and Russia.

“We are delighted that this excellent group of young business leaders has chosen ESMT for their Executive MBA. We are confident that the well-rounded experience and international spectrum of the participants will create an excel-lent class dynamic and provide the platform for new intercultural management and leadership skills to be brought back to their organizations,” emphasizes Nick Barniville, Director of MBA programs at ESMT.

The 25 men and six women of the class of 2010-2012 are on average 35 years old, with an average of 11 years of professional experience. The ESMT Executive MBA program supports the management development for executives of several multinationals such as Allianz, Lufthansa, MAN and Siemens, Bayer Schering Pharma, Unicredit Hypover-einsbank, and the Roca Group. Business executives from a variety of industries are joined by a manager of a non-profit organization, the German Cancer Society. “ESMT has since its foundation been striving to promote values of responsible leadership, sustainability, and diversity. Consequent to these values, we are delighted to be able to in-clude a representative from the not-for-profit sector,” comments Zoltán Antal-Mokos, Associate Dean of Degree Programs.

During the 21-month program that has been accredited by AMBA and FIBAA, the students develop their ability to lead in a global marketplace. The program combines onsite modules with e-learning supported self-study and an international field seminar.

More information here: www.esmt.org/emba

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.  

Together with many distinguished guests from business and the academic world, ESMT inaugurated the Ernst & Young Chair in Governance and Compliance with a lecture by the holder of the chair Professor Jörg Rocholl. In his lecture Professor Rocholl discussed the question of how good governance and compliance can be achieved in the wake of the financial and economic crisis. In his introductory address Georg Graf Waldersee, Managing Partner of Ernst & Young, said, “The financial crisis has shown that governance and compliance are crucial for the global economy. Ernst & Young has endowed this chair to promote research in this area.”

Professor Rocholl holds a PhD and master’s degree in finance and economics from Columbia Business School and received his economics degree with distinction from the University Witten/ Herdecke in Germany. He joined ESMT in July of 2007 and was named the associate dean of faculty in September 2010. Jörg Rocholl’s research and expert opinion have been quoted in numerous media outlets including New York Times, Washington Post, Los Angeles Times, Boston Globe, Financial Times, Frankfurter Allgemeine Zeitung, Börsen-Zeitung, Deutsche Welle TV, and ARD.

“Professor Rocholl is one of our most renowned experts on finance topics and provides up-to-date and relevant research results,” emphasized ESMT President Lars-Hendrik Röller. “We look forward to strengthening our focus on governance and compliance with this Ernst & Young chair.”

Press contact ESMT
Farhad Dilmaghani, +49 (0)30 21 231-1042, farhad.dilmaghani@esmt.org
Kristin Dolgner, +49 (0)30 21 231-1066, kristin.dolgner@esmt.org

Press contact Ernst & Young
Dag-Stefan Rittmeister, +49 (0)711 9881-15980, dag-stefan.rittmeister@de.ey.com

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services. ESMT is a private university based in Berlin, Germany, with a second campus in Schloss Gracht near Cologne.

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. We aim to have a positive impact on businesses and markets, as well as on society as a whole. Our 144,000 people are the foundation of our success. We assemble the right multi-disciplinary team for your business, drawing on our global network of profes-sionals. Working with you in a collaborative style, we gain a clear understanding of your organization and strive to identify issues before they become problems. You get the people you need, wherever in the world you need them, backed up by leading practices, methodologies and tools.

ESMT European School of Management and Technology continues to invest in its development as an international business school based in Germany. ESMT’s founders will support this expansion in general with additional funding of 50 million EUR. President Lars-Hendrik Röller will serve a second five-year term.

In total, ESMT has acquired in general over 70 million EUR of new financial support since 2009. In addition, six chaired professorships have been funded. This will enable ESMT to continue on its course as a leading international business school based in Germany by strengthening its research, teaching, and executive education.

"ESMT has been on a path of successful expansion for some years, therefore we have agreed to pursue the next challenges with a reinforced mandate to Lars-Hendrik Röller," said Michael Diekmann, Chairman of the Board of Management, Allianz SE, and Chairman of the ESMT Foundation Board of Trustees. "The founders of ESMT, representing a major part of German industry, will support ESMT’s growth with additional funds, acknowledging the progress of the school and its prospects," said Dr. Josef Ackermann, Chairman of the Board of Management Deutsche Bank AG and Vice Chairman of the ESMT Foundation Board of Trustees.

"I appreciate the confidence that the founding companies have placed in me to successfully lead ESMT's next phase of expansion," said ESMT President Lars-Hendrik Röller.

Press contact
Farhad Dilmaghani, +49 (0)30 21 231-1042, farhad.dilmaghani@esmt.org
Martha Ihlbrock, Tel.: +49 (0)30 21231-1043, martha.ihlbrock@esmt.org

ESMT European School of Management and Technology is continuing the expansion of its faculty. In addition to Paul Heidhues, whose appointment has been announced, Laura Guillén and Stefan J. Reichelstein have joined the ESMT faculty in September, bringing ESMT’s faculty to 31 members from 20 countries. Laura Guillén, whose expertise lies in organizational behavior and leadership, has joined as an assistant professor. Stefan J. Reichelstein, an affiliate professor whose primary association continues to be the Stanford Graduate School of Business, focuses on the interface of management accounting and economics. Paul Heidhues, full professor and the Lufthansa Chair in Competition and Regulation, has also been appointed Director of PhD studies. His research interests include (behavioral) industrial organization, competition policy, behavioral economics, and applied game theory.

ESMT has made further appointments within its faculty. C. B. Bhattacharya, full professor and holder of the E.ON Chair in Corporate Responsibility, has been named associate dean of international relations. Jörg Rocholl, full professor and Ernst & Young Chair in Governance and Compliance has taken on the position of associate dean of faculty, succeeding Luc Wathieu, who remains ESMT affiliate professor. As director of research, ESMT Associate Professor Catalina Stefanescu-Cuntze follows Francis de Véricourt, who is on leave of absence.

Contact
Farhad Dilmaghani, +49 (0)30 21 231-1042, farhad.dilmaghani@esmt.org
Martha Ihlbrock, Tel.: +49 (0)30 21231-1043, martha.ihlbrock@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.    

As we know, innovation is one of the engines driving economic value creation and growth. A critical part of that process are the firms that conceive, develop, and commercialize new ideas. Equally decisive,

ESMT European School of Management and Technology welcomed Paul Heidhues as full professor and the Lufthansa Chair in Competition and Regulation today. He has also been named Director of PhD studies. Stefan Lauer, Member of the Executive Board of Deutsche Lufthansa AG and ESMT Foundation Board of Trustees member said, "With the endowment of this professorship at ESMT, Lufthansa shows its support of the leading international business school in Germany and the further development of its core competence in competition and regulation." 

Paul Heidhues received a PhD in Economics from Rice University in Texas and went on to do his Habilitation at Humboldt University, Berlin. The German-American was most recently employed as an associate professor for economic theory at the University of Bonn. His research interests include (behavioral) industrial organization, competition policy, behavioral economics, and applied game theory. He is currently an associate editor of the BE Journals in Theoretical Economics and the Journal of Industrial Economics. He is also a CEPR Research Affiliate in Industrial Organization, an elected member of the industrial organization as well as the economic theory committee of the Verein für Socialpolitik, and is a member of the research group of the German Federal Cartel Office (Arbeitskreis Kartellrecht).  

ESMT President Lars-Hendrik Röller said, "Paul is a top researcher with a tremendous track record. His extensive experience will benefit students in his position as Director of PhD studies. Paul makes our already diverse faculty even more so."

Contact Deutsche Lufthansa AG
Dr. Peter Schneckenleitner, +49 (0) 69 696 94969, peter.schneckenleitner@dlh.de

About Deutsche Lufthansa AG
Deutsche Lufthansa AG is an Aviation Group comprising around 400 subsidiaries and affiliates. Headquartered in Germany, the Group operates in five business segments – passenger transportation, logistics, MRO, catering and IT services. Passenger transportation is the Group’s core business: The airlines engaged in the passenger transportation business are Lufthansa (including Lufthansa Regional and Lufthansa Italia) Austrian Airlines, bmi, SWISS and Germanwings as well as stakeholdings in Brussels Airlines, JetBlue und SunExpress. In the 2009 business year, the airlines in the Lufthansa Group welcomed more than 76 million passengers on board their flights, making it Europe’s leading airline grouping.  The Group fleet currently consists of more than 720 aircraft. End of 2009 the Lufthansa Group employed around 118,000 people. In the 2009 business year, it returned revenues totalling 22.3 billion euros. 

As an academic partner of the Kofi Annan Business School Foundation, ESMT European School of Management and Technology in Berlin is offering the Kofi Annan Business School Foundation Fellowship, a full-tuition scholarship including a monthly stipend for living expenses, and one return air ticket to an outstanding candidate from a developing country. The high-potential professional must not only meet the application criteria of the ESMT’s full-time MBA, but must also prove his or her need of financial support.

The Kofi Annan Business School Foundation aims to stimulate economic development, job creation, and poverty alleviation by educating a new generation of innovative and socially responsible managers. It offers study programs to motivated students who commit to returning to their home country to participate in the development of the regional economy. In addition the foundation also encourages knowledge exchange between business schools in Europe, Africa, Asia, and Latin America. It is based in The Hague.

ESMT Associate Dean of Degree Programs Zoltán Antal-Mokos commented, "The guiding principles of the Kofi Annan Business School Foundation fit well with ESMT’s focus on responsible leadership and sustainability in management education."

Showing its commitment to these fundamentals, ESMT has also signed on to the United Nations Principles of Management Education (PRME). These principles include academic activities around the values of global social responsibility as portrayed in the UN Global Compact. The UN Global Compact is a United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The PRME is an international voluntary engagement platform for business schools, supporting them in their contribution to helping build prosperous and thriving societies through curricula, research, and advocacy.

More information about ESMT scholarships
More information about the Kofi Annan Business School Foundation
More information about the UN PRME

Press contact

Martha Ihlbrock, Tel.: +49 (0)30 21231-1043, martha.ihlbrock@esmt.org

About ESMT

ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.    

"Our study shows the consequences that pricing and reimbursement regulation can have on pharmaceutical innovation. It also shows that, incorrectly applied, regulation can reduce the value of pharmaceutical projects and curtail the resources available to carry them out," said Dr. Hans W. Friederiszick of ESMT CA. "Rational investors will naturally look for the most profitable investment choices, which is why regulation has a direct impact on the number and characteristics of the medications developed."

New antibiotics can see a 100% drop in expected profitability (known as Expected Net Present Value, ENPV) in phase one of clinical trials under a pricing model widely used in the EU. The ENPV is also lower, though less dramatically, through further stages of clinical trials. Other drugs with low margins and/or sales volume are similarly affected.

The ESMT CA study was commissioned by Novartis and is based on a unique simulation of a representative pharmaceutical firm’s decision-making process, calibrated using publicly available data. The model draws conclusions from the simulated actions of the pharmaceutical company, taking account of parameters including the costs of developing new products, the probability of failure during clinical trials, and the probability of a final product not being considered highly innovative by regulators.

European governments predominantly see pharmaceutical pricing models as a tool for cost control in the public health sector, but may not to the same extent acknowledge its implication on product value and, hence, on the development of new drugs.  External Price Benchmarking (EPB), a model widely used across OECD countries, causes a 5.7% drop in the optimal pharmaceutical portfolio value of a representative company under the ESMT CA simulation. Internal Reference Pricing (IRP), used in 17 EU-member and 3 non-EU OECD countries, causes an 11.7% drop. Having some regions of the world under IRP and others under EPB magnifies the problem, since internal prices are then exported to external markets, leading to a 19.8% drop in portfolio value.  

All forms of pricing regulation, when compared to market-based pricing, are found likely to reduce the value of projects and the resources available for R&D activities. Prices lower than market value in the cases of both IRP and EPB means that less money is available to invest in new products. IRP can lead to a failure to launch for one in ten products, half of them highly innovative.  This is due to the fact that IRP may group innovative drugs that have just been launched with older drugs whose patent life has expired or is about to expire, effectively shortening the life cycle of innovative drugs and decreasing the incentive to innovate.

In addition, current pricing models are often shown to favor ‘breakthrough’ pharmaceutical innovations over ‘follow-on’ drugs, or incremental improvements. For instance, under a form of IRP introduced in Germany in 2004, later-in-class drugs always have their price referenced against the relevant first-in-class drug, even if they have new and beneficial characteristics.  This can lead to a different understanding of “innovation” for patients and chemists. A statin, for instance, may be redeveloped to have fewer side effects or be more beneficial for one group of patients. This will seem like an innovative development to the patient but it will not necessarily be innovative enough from the pricing regulator’s point of view to benefit from favorable regulation. The report therefore demonstrates the need to support both ‘first in class’ and ‘best in class’ products, rather than drawing a regulatory distinction between ‘break-through’ products and everything else.

Press contact
Farhad Dilmaghani, Tel.: +49 (0)30 21231-1042, farhad.dilmaghani@esmt.org
Kristin Dolgner, Tel.: +49 (0)30 21231-1066, kristin.dolgner@esmt.org

About ESMT Competition Analysis
ESMT European School of Management and Technology is an international business school based in Berlin, Germany.  ESMT Competition Analysis (ESMT CA) is the economic consultancy of ESMT which provides case-related advice and research on key topics in fields of competition policy and regulation. The study was commissioned by Novartis with the aim of improving understanding of the possible negative relationship between cost containing pric-ing and reimbursement regulation and global pharmaceutical innovation. 

The full report can be downloaded here.

Background and definitions

The drug discovery and development process lasts on average ten years, and is risky because during clinical trials a drug candidate may prove unsafe or ineffective, or because the marketing authorisation process may consider the evidence gathered in support of a new drug application to be insufficient. It is estimated that at most one of 5,000 drug candidates is successfully developed and authorized for marketing.  The research-based pharmaceutical industry invests €71.5 billion annually in research, which accounts for more than 19% of all global private-sector R&D expenditures.

Internal Reference Pricing (IRP): (Also known as Jumbo Group and Therapeutic Reference Pricing.) The price of or the amount reimbursed for a drug in a country is based on the price of chemically, pharmaceutically or therapeutically similar drugs in the same country, unless the drug is considered highly innovative.

External Price Benchmarking (EPB): (Also known as International Reference Pricing.) The price of a drug in a country is based on the price of the same drug in other countries. The basket of benchmark countries is selected on the basis of economic and/or geographic proximity. In particular, European countries tend to benchmark each other.

Market-based pricing: Health insurer is a "price taker." The maximum increment that a firm can charge for an innovative new product is the marginal difference in purchaser’s willingness to pay for the new product relative to the existing treatment or competitive alternatives. It is further constrained by its bargaining position relative to the health insurer that pays for the product.

Value-based pricing: The price of a drug in a country is based on a cost-effectiveness or cost-benefit analysis in which the cost of a drug is traded against its health benefits (quantity and quality of life). Pharmaco-economic assessment goes hand in hand with tailored drugs.

About the Methodology

The ESMT CA model simulates the drug-development decision-making process of a pharmaceutical company, giving the model company a representative amount of investment money and products in the pipeline. The simulation results tell us how this firm’s decisions to develop and launch a product and therefore its portfolio are influenced by the application of IRP, EPB or both schemes relative to a no-regulation benchmark.  Parameters which must be assigned for each calculation are:

• Therapeutic areas and number of projects by therapeutic area and development phase
• For every development phase, development costs and probability of technical success
• Development cost premium for highly innovative projects
• Probability of external competition’s success
• Discount rate
• For every region and every therapeutic area, demand intercept and slope
• Average/marginal manufacturing/marketing cost
• Price discount for not highly innovative drugs in the region under IRP
• Development budget constraint

ESMT European School of Management and Technology is holding its 3rd Annual Forum in Berlin on June 16-17, 2010.

Titled "People, Planet, Profit: Creating a Sustainable Future," and focusing on the schools core competencies of European competitiveness, responsible leadership, and the management of technology, the themes of the conference have never been more relevant. Influential figures in European business and economic policy will be present to set an agenda for the future competitiveness and sustainability of European business.

On the first day of the conference, heads of leading global companies such as Deutsche Telekom, Gazprom, Lufthansa, Saint-Gobain, and Siemens discuss how Europe can continue to be a global leader in establishing a sustainable economic, ecological, and socio-political future, while still securing the region’s competitiveness.

Infosys founder and chief mentor N.R. Narayana Murthy is receiving the first ESMT Responsible Leadership Award, an annual award honoring an inspirational business figure who has demonstrated a deep commitment to the principles of sustainability. ESMT is also announcing the Deutsche Telekom Chair in Leadership and HR Development. At the same time, ESMT professor Jörg Rocholl has been named the Ernst & Young Chair in Governance and Compliance.

"With the international platform of this Annual Forum, ESMT is sending a powerful signal from Berlin across Germany, Europe, and beyond: while the bottom line continues to be important, the triple bottom line – the balance between economic, environmental and social targets – is key to the sustainability of our planet and to sustainable, and therefore successful, business," said Michael Diekmann, CEO, Allianz, and Chairman of the ESMT Foundation Board of Trustees. "Sustainable business practices must be the standard against which we measure all future economic success."

Michael Diekmann (CEO, Allianz) will open the ESMT Annual Forum, followed by keynote speakers Peter Löscher (CEO, Siemens) and Alexander I. Medvedev (Deputy Chairman of the Management Committee, OAO Gazprom). In the Cornerstone Panel on European competitiveness Jean-Louis Beffa (Chairman of the Board of Directors, Saint-Gobain), Peter Löscher, Wolfgang Mayrhuber (CEO, Deutsche Lufthansa), Alexander I. Medvedev and René Obermann (CEO, Deutsche Telekom) debate the future role of government and regulation in Europe. The global leaders agree that companies and policymakers must be more innovative and install measures that truly foster sustainability.

During the three parallel sessions on the second day, internationally recognized academics and business leaders will engage in a deeper debate how companies should combine economic success with "doing good," leading people for sustainability, and the future of green energy. Alexander Landia, Chairman of the Board of Directors of the Siberian Coal Energy Company, will give the conference’s closing address.

"With this year’s Annual Forum, ESMT has brought together companies, academia and management talent and has created an international platform for sustainability. I am proud that we have been able to debate this vision of a triple bottom line of people, planet, and profit with various international stakeholders," said Lars-Hendrik Röller, President of ESMT.

Press contact
Farhad Dilmaghani; Tel.: +49(0)30 21231-1042; farhad.dilmaghani@esmt.org
Martha Ihlbrock; Tel.: +49(0)30 21231-1043; martha.ihlbrock@esmt.org

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.  

• Results raise serious concerns about investors’ ability to make the right investment choices – meaning that increasing investor protection and curbing unnecessary risks should be a priority for regulators
• Investors naïvely chase performance at all costs, irrespective of the risk of different hedge fund investment styles
• Style volatility, and investors’ inability to time switching in and out of different investment styles, exposes them to unforeseen risk
• Research raises concern about the efficient allocation of capital and implications for hedge fund regulation

New research from the European School of Management & Technology (ESMT), in collaboration with the Rotterdam School of Management, highlights a worrying disconnect in the behaviour of investors in hedge funds and the subsequent performance of their investments, typically resulting in poor or volatile performance and exposure to unnecessary risk. In a study of hedge fund performance according to investment style, covering 1,543 hedge funds over 10 years, ESMT’s research raises disturbing questions about the way that hedge fund investors invest and their willingness to actively chase performance at all costs, irrespective of the potential level of risk to which they are exposed. As a result, the authors of the research take the view that greater regulation is necessary to protect investors and that the provisions of the controversial Alternative Investment Fund Managers (Directive) ought to be welcomed.

The research reveals that investors systematically reward investment styles that have performed well over the previous three quarters, effectively substituting different investment styles for one another regardless of whether they are taking on higher levels of risk. This results in the top performing investment style attracting nearly $300 million more capital than the investment style that performs most poorly. A differential of 1 per cent in the performance of a given style attracts a further $9 million of investor funds. However, the volatility of hedge fund styles means that high performing investment styles often go on to underperform other investment styles in subsequent quarters.

The importance of ESMT’s research is that it is the first of its kind to show correlated investment behaviour based on style. Previous studies have not separated style-based investing from those investors rewarding the performance of individual funds or managers. ESMT calculates that approximately 13 per cent of total net asset growth can be attributed to “style-based investing”, and 20 per cent of the capital that is committed to the hedge fund sector.  

The ramifications of style-based investment are significant, with the research suggesting that focusing on investment styles results in a potential inefficient allocation of capital across the hedge fund sector. The danger is that as increasing amounts of capital chase given styles (potentially attracting more managers into that style in turn), momentum investment starts to take hold, forcing up the price of overheated securities.

Guillermo Baquero, Assistant Professor at the European School of Management & Technology (ESMT) and an author of the research comments:
"We have a two-fold issue here: whether investors’ naivety is leaving them overly exposed to risk they are not properly evaluating, and whether the growth of the hedge fund industry combined with that naivety means the sector poses a threat to financial stability. The fact that investors appear unable to recognise the risks of different styles and chase performance at all costs could leave them vulnerable and unprotected. This is exacerbated at the individual fund level by the opacity and lack of regulation of the sector, which already means that there are significant discrepancies in the level and quality of information reported.

"Now is the time to discuss deep, substantial and effective regulation that will genuinely be of use to investors and protect our financial system for the future."

The fact that previously winning investment styles are subject to subsequent weak performance leads ESMT to conclude that a problem may lie within the simple movement of money itself. On a pure cash-flow weighted model, subsequent investor returns are more adversely affected than those recorded when style investment returns are equally weighted. In short, it is clear that the wall of cash being committed to a particular winning style only exacerbates later poor performance. This suggests that hedge fund strategies are not easily scalable and opportunities to profit rapidly diminish as more investor capital is committed.

Guillermo Baquero comments:
“Given that the minimum investment thresholds for hedge fund investing have come down substantially in recent years, expanding the market and opening it up to retail investors, it is important to consider the level of risk hedge funds – and misinformed capital flows – may pose.

“We already know from the financial crisis that hedge funds were previously making increasingly directional bets in a rising market, which forced them into a situation of having to painfully unwind their positions. This in turn exerted huge downward pressure on already fragile markets. If naïve investment combines with an increasingly expanding industry, systemic risk may yet be posed in the future by the larger funds. We need financial reform that will anticipate the threats of the future, as well as deal with those of the past. Increasing regulation and investor communication around hedge funds will help considerably in making overall investment much smarter.” 

‘Winning’ and ‘losing’ hedge fund styles: performance does not persist
ESMT’s research firstly reveals that there is no relationship between current and subsequent performance of a given investment style, and secondly calculates the impact on investor returns.

Looking at the two top performing and two worst performing investment styles in each quarter over the study’s 10-year time horizon reveals considerable volatility in the relative performance of different investment styles. For example, one of the most volatile investment strategies, Dedicated Short Bias, came first or second for 39% of the period surveyed. But this same strategy gave the worst or second worst returns for 55% of the time.

While strategies like emerging markets, dedicated short bias, and managed futures are particularly well-known for their volatility, ESMT’s research reveals that the volatility of hedge fund returns is true across the spectrum. When analysing the performance of different styles in the immediately following quarter, the research found that half of investment categories typically went on to outperform the winning style from the previous quarter. When comparing winners and losers over several subsequent quarters, the research finds that relative performance even reverses – with the losers increasingly outperforming the previous winners.

What is more, investors are also highly likely to reward very extreme movements in style, often associated with the riskiest areas of hedge fund investment. ESMT’s research reveals that if a particular style moves from bottom to top performer in a given quarter, it is rewarded with 6 per cent of investor inflows, and 12 per cent of capital over the following three quarters. Also, investors react strongly to sequences of relative performance.

Guillermo Baquero explains:
“Naturally, investors will be drawn to investments that demonstrate more favourable returns, yet our research acts as a cautionary tale about falling into the age-old trap of trusting to past performance. Despite the perception that hedge fund investors are more sophisticated, our research suggests that this is not the case and that investors are overly reliant on yesterday’s performance. This is particularly worrying at a style level as investors are, in effect, moving in and out of strategies irrespective of whether they are exposing themselves to higher or inappropriate levels of risk for their needs. Evidence of an uninformed supply of capital flooding the market raises serious questions both about the level of risk to which investors are personally exposed, and the potential level of risk brought to financial markets as a whole”.

“Chasing the winners”: investors fail to anticipate future performance
ESMT’s research then goes on to track aggregate dollar flows from investors as a result of their rewarding (or punishing) different investment styles. The research finds that investor inflows are more heavily weighted to the particular styles with the highest index returns in the previous three quarters.

However, the research clearly reveals that money flows fail to anticipate future performance. By the fourth quarter, poor performing investment styles – that had received net negative inflows of investor capital – increasingly outperform. In short, investors are unable to time their investments effectively.

ESMT’s research concludes that investors’ inability to time their capital effectively means they either misread the information they consume on given investment styles, or that the information to which they are exposed is not representative enough to act as a useful benchmark.

Guillermo Baquero concludes:
“These results raise serious concerns about investors’ ability to make the right allocation choices and suggest that increasing investor protection and curbing unnecessary risks and speculative activity of hedge funds should be a priority for regulators. In line with these results, the proposed new rules by European member states on tighter restrictions for hedge funds are a milestone. The new rules would include registration requirements, compensation guidelines and compel managers to regularly disclose the use of leverage, short sales and derivatives.

“Whilst no one would wish to reduce hedge funds to a mere offshoot of the mutual fund sector, the industry needs to take responsibility for its increasing size, role, and attraction for much more mainstream investors. Cross-border marketing restrictions or “third country” rules remain controversial, particularly with the UK and US. Yet, overcoming the inconsistencies in cross-border regulatory regimes is vital to frame the regulatory debate on hedge funds correctly and to frame the regulatory debate on hedge funds correctly and effectively.”

About ESMT
ESMT European School of Management and Technology was founded in October 2002 by 25 leading global companies and institutions. The international business school offers Full-time MBA and Executive MBA programs, as well as executive education in the form of open enrollment and customized programs. The School also features in-house research-oriented consulting services in the areas of competition and regulation. ESMT is a private university based in Berlin, Germany, with an additional location in Schloss Gracht near Cologne.  

The international business school ESMT European School of Management and Technology in Berlin was able to hold its revenues steady in the fiscal year 2009 at 17 million EUR (2008: 17.6 million EUR). The founders and benefactors of the school supported ESMT in 2009 with their commitment to contributions of 20 million EUR. The school’s endowment grew from 83.16 million EUR in 2008 to 93.16 million EUR at the end of 2009. The number of employees grew by almost eight percent, from 114 to 123 full-time equivalents.

In total there were 89 students at ESMT in the full-time and the two intakes of the executive MBA programs in 2009. In the course of the economic crisis, the number of participants in executive education programs decreased by 16 percent to 2,021 in 2009. The ESMT USW Netzwerk, which offers open enrollment programs in German, acquired participants from 75 companies that had not been customers before. The number of employees at the ESMT subsidiary ESMT Competition Analysis (ESMT CA) grew by 20 per cent to 14 full-time equivalents. “We are pleased with the academic and economic development of ESMT. For this reason, we founders will continue to support ESMT’s growth and expansion,” said Michael Diekmann, Chairman of the Board of Management, Allianz SE, and Chairman of the ESMT Foundation Board of Trustees.

ESMT continued the successful expansion of its faculty in 2009. Five new full-time professors took on positions at ESMT, bringing ESMT’s faculty to 28 members from 18 countries and making it one of the most international faculties in Germany. The close cooperation with founding companies was also reflected in faculty and research. During 2009, three endowed chairs were founded: the Lufthansa Chair in Competition and Regulation, the Karl-Heinz Kipp Chair in Research, and the Ferrero Chair in International Marketing.

“In 2010 we have resolved to continue the growth of our MBA programs, our faculty and our executive education programs. In light of the financial and economic crisis, the important contribution that an international business school with German roots can make to the international discourse and the education of future leaders has become even more apparent,” said Lars-Hendrik Röller, President of ESMT.