The German Mittelstand antithesis to Silicon Valley entrepreneurship?

While 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...

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Bibliographic Details
Published inSmall business economics Vol. 52; no. 2; pp. 345 - 358
Main Authors Pahnke, André, Welter, Friederike
Format Journal Article
LanguageEnglish
Published New York Springer Science + Business Media 01.02.2019
Springer US
Springer Nature B.V
Subjects
Belonging
Business and Management
Entrepreneurs
Entrepreneurship
High tech industries
Identity
Industrial Organization
Management
Microeconomics
Ownership
Policy making
Small & medium sized enterprises-SME
United States > US
Silicon Valley-California
Germany
Context
Everyday entrepreneurship
L26
Mittelstand
M13
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Summary:While 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 Silicon Valley entrepreneurship. We show that Mittelstand is about more than just small and medium enterprise size, identifying as its distinctive features the identity of ownership and management and a sense of belonging. In this regard, we also discuss the influence of historical paths and current institutional settings of the Mittelstand. 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 the economy which is also competitive, innovative, and growth-oriented, albeit in different ways compared to Silicon Valley entrepreneurship. In conclusion, 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 vibrant diversity and heterogeneity of entrepreneurship.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-018-0095-4