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The German Mittelstand: Antithesis to the Silicon Valley entrepreneurship model?

André Pahnke () and Friederike Welter

No 01/19, Working Papers from Institut für Mittelstandsforschung (IfM) Bonn

Abstract: Whilst internationally, the Mittelstand in Germany is admired and many countries try to emulate it, the current debate in Germany praises the Silicon Valley model of entrepreneurship, contrasting the Mittelstand as low-growth, low-tech and non-innovative - in short: as a hindrance to Germany's economic future. We therefore ask whether the Mittelstand actually is the antithesis to the Silicon Valley entrepreneurship model. We show that Mittelstand is more than a small and medium enterprise size, identifying its distinctive features (identity of ownership and management, sense of belonging). In this regard, we also discuss the influence of historical paths and current institutional settings on the Mittelstand model. Asking to what extent the Mittelstand is distinctive, we address its diverse contributions to economy and society. We suggest that the Mittelstand is an excellent example of everyday entrepreneurship and a vibrant segment of economy which is also competitive, innovative, and growth orientated; albeit in different ways compared to Silicon Valley entrepreneurship. In concluding, we outline ideas for future research and implications for policymakers. In our view, future research and policies should stand back from dichotomies such as "Mittelstand versus Silicon Valley entrepreneurship" and acknowledge the diversity and heterogeneity of entrepreneurship.

Keywords: Mittelstand; context; everyday entrepreneurship (search for similar items in EconPapers)
JEL-codes: L26 M13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-ino and nep-sbm
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifmwps:0119

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