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The German Mittelstand: antithesis to Silicon Valley entrepreneurship?

Author

Listed:
  • André Pahnke

    (Institut für Mittelstandsforschung (IfM) Bonn)

  • Friederike Welter

    (Institut für Mittelstandsforschung (IfM) Bonn
    University of Siegen)

Abstract

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.

Suggested Citation

  • André Pahnke & Friederike Welter, 2019. "The German Mittelstand: antithesis to Silicon Valley entrepreneurship?," Small Business Economics, Springer, vol. 52(2), pages 345-358, February.
    • Handle: RePEc:kap:sbusec:v:52:y:2019:i:2:d:10.1007_s11187-018-0095-4
    DOI: 10.1007/s11187-018-0095-4
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    References listed on IDEAS

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