IDEAS home Printed from https://ideas.repec.org/p/zbw/ifmwps/0119.html
   My bibliography  Save this paper

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

Author

Listed:
  • Pahnke, André
  • Welter, Friederike

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.

Suggested Citation

  • Pahnke, André & Welter, Friederike, 2019. "The German Mittelstand: Antithesis to the Silicon Valley entrepreneurship model?," Working Papers 01/19, Institut für Mittelstandsforschung (IfM) Bonn.
  • Handle: RePEc:zbw:ifmwps:0119
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/193770/1/106739141X.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Wagner, Joachim, 1994. "The Post-entry Performance of New Small Firms in German Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 141-154, June.
    2. Berghoff, Hartmut, 2006. "The End of Family Business? The Mittelstand and German Capitalism in Transition, 1949–2000," Business History Review, Cambridge University Press, vol. 80(2), pages 263-295, July.
    3. Jahn, Vera, 2015. "The Importance of Mittelstand Firms for Regional Apprenticeship Activity - Lessons for Policy -," Working Paper 158/2015, Helmut Schmidt University, Hamburg.
    4. Pahnke, André & May-Strobl, Eva & Schneck, Stefan, 2014. "Die Einkommenssituation von Selbstständigen und die Inanspruchnahme staatlicher Leistungen auf Basis des SGB II," IfM-Materialien 226, Institut für Mittelstandsforschung (IfM) Bonn.
    5. Alina Sorgner & Michael Fritsch & Alexander Kritikos, 2017. "Do entrepreneurs really earn less?," Small Business Economics, Springer, vol. 49(2), pages 251-272, August.
    6. Michael Berlemann & Vera Jahn, 2016. "Regional Importance of Mittelstand Firms and Innovation Performance," Regional Studies, Taylor & Francis Journals, vol. 50(11), pages 1819-1833, November.
    7. Block, Joern & Spiegel, Frank, 2011. "Family Firms and Regional Innovation Activity: Evidence from the German Mittelstand," MPRA Paper 28604, University Library of Munich, Germany.
    8. Logue, Danielle M. & Jarvis, Walter P. & Clegg, Stewart & Hermens, Antoine, 2015. "Translating models of organization: Can the Mittelstand move from Bavaria to Geelong?," Journal of Management & Organization, Cambridge University Press, vol. 21(1), pages 17-36, January.
    9. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, September.
    10. Schlepphorst, Susanne & Schlömer-Laufen, Nadine, 2016. "Schnell wachsende Unternehmen in Deutschland: Charakteristika und Determinanten ihres Wachstums," IfM-Materialien 246, Institut für Mittelstandsforschung (IfM) Bonn.
    11. Schlömer-Laufen, Nadine & Lamsfuß, Christoph & Große, Jutta & Chlosta, Simone, 2014. "Wirtschaftliche Entwicklung großer Familien- und Nichtfamilienunternehmen: Eine Bilanzdatenanalyse für den Zeitraum 2008 bis 2012," IfM-Materialien 235, Institut für Mittelstandsforschung (IfM) Bonn.
    12. Josh Lerner, 2013. "The Boulevard of Broken Dreams: Innovation Policy and Entrepreneurship," Innovation Policy and the Economy, University of Chicago Press, vol. 13(1), pages 61-82.
    13. Schneck, Stefan & May-Strobl, Eva, 2014. "The economic contribution of start-up firms in Germany," Working Papers 02/14, Institut für Mittelstandsforschung (IfM) Bonn.
    14. Berghoff, Hartmut, 2006. "The End of Family Business? The Mittelstand and German Capitalism in Transition, 1949–2000," Business History Review, Cambridge University Press, vol. 80(2), pages 263-295, July.
    15. Maaß, Frank & May-Strobl, Eva, 2016. "Der Stellenwert nicht-technologischer Neuerungen im Innovationsgeschehen der mittelständischen Wirtschaft," IfM-Materialien 250, Institut für Mittelstandsforschung (IfM) Bonn.
    16. Wolter, Hans-Jürgen & Werner, Arndt & Schneck, Stefan, 2015. "Zur Entwicklungsdynamik neugegründeter Unternehmen: Eine Längsschnittanalyse auf Basis des Umsatzsteuerpanels," IfM-Materialien 238, Institut für Mittelstandsforschung (IfM) Bonn.
    17. Audretsch, David B & Elston, Julie A, 1997. "Financing the German Mittelstand," Small Business Economics, Springer, vol. 9(2), pages 97-110, April.
    18. Storm, Servaas & Naastepad, C.W.M., 2015. "Crisis and recovery in the German economy: The real lessons," Structural Change and Economic Dynamics, Elsevier, vol. 32(C), pages 11-24.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pahnke, André & Holz, Michael & Welter, Friederike, 2019. "Unternehmerische Zielsysteme: Unterscheiden sich mittelständische Unternehmen tatsächlich von anderen?," IfM-Materialien 276, Institut für Mittelstandsforschung (IfM) Bonn.
    2. Schenkenhofer, Julian, 2020. "Hidden champions: A review of the literature & future research avenues," UO Working Papers 06-20, University of Augsburg, Chair of Management and Organization.
    3. Alhusen, Harm & Bennat, Tatjana & Bizer, Kilian & Cantner, Uwe & Horstmann, Elaine & Kalthaus, Martin & Proeger, Till & Sternberg, Rolf G. & Töpfer, Stefan, 2019. "Measuring the "doing-using-interacting mode" of innovation in SMEs - A qualitative approach," ifh Working Papers 23/2019, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    4. Michael Berlemann & Vera Jahn & Robert Lehmann, 2020. "Is the German Mittelstand More Resistant to Crises? Empirical Evidence from the Great Recession," CESifo Working Paper Series 8777, CESifo.
    5. Haverkamp, Katarzyna, 2019. "Soloselbstständigkeit im Handwerk: Ergebnisse des Mikrozensus 2014," Göttinger Beiträge zur Handwerksforschung 29, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    6. Welter, Friederike & Baker, Ted, 2020. "Moving contexts onto new roads: Clues from other disciplines," Working Papers 03/20, Institut für Mittelstandsforschung (IfM) Bonn.
    7. Welter, Friederike & Schlepphorst, Susanne & Schneck, Stefan & Holz, Michael, 2020. "Der gesellschaftliche Beitrag des Mittelstands: Konzeptionelle Überlegungen [The societal impact of German Mittelstand: Conceptual considerations]," IfM-Materialien 283, Institut für Mittelstandsforschung (IfM) Bonn.

    More about this item

    Keywords

    Mittelstand; context; everyday entrepreneurship;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifmwps:0119. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - Leibniz Information Centre for Economics). General contact details of provider: http://edirc.repec.org/data/ifmbode.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.