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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
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Mittelstand; context; everyday entrepreneurship;
    All these keywords.

    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

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