One promising way to cope with changing requirements from the labor market in the domain of Science, Technology, Engineering and Mathematics (STEM), but also to keep the field up to date, to start innovations and to advance the STEM domain as such is the use of student labs. In these labs, students work together in small groups imitating professional practice of design and technology workers. More insights are needed in what competences student labs in the STEM domain address and what the implications would be for the design of student labs. A review of empirical studies on student labs and additional literature indicate that five generic competences are addressed in most student labs: Collaboration, communication, problem solving, critical thinking, and creativity. In order to effectively enhanced these competences, student labs should be designed as authentic productive learning environments based on three design principles: 1) Realistic, complex task situations, 2) Multidisciplinarity, and 3) Social interaction. IoT Rapid Proto Labs are examples of such a student labs, in which cross-border multidisciplinary teams of students, teachers (coaches), and practitioners jointly develop solutions to challenging IoT applications (Internet-connected objects), add value for enterprises, and strengthen the employability, creativity and career prospects of students.