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Institutional endowment, localized capabilities and the emergence of SMEs: from mining to recycling, the case of Freiberg (Saxony)

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  • Bernard Musyck

Abstract

This paper analyses the development of the emerging SME-based recycling and environmental technology sector in the region of Freiberg in the former centrally planned economy of the German Democratic Republic. The author analyses a relatively successful process of economic renewal resulting from a combination of endogenous assets and exogenous impulses, set within a socio-economic context often seen as unconducive to the creation of new and innovative firms. The analysis has three distinct but interlocking strands of explanation: long-term historical assets and localized capabilities; the restructuring of existing local research institutes; and public policies in support of environmental protection and applied research. The paper analyses how processes of learning and unlearning, and the existence of tacit and formal knowledge, supported by a strong social capital reinforced during years of communism, contributed to the development of the new sector. Overall, the analysis privileges an historical perspective in highlighting a process of long-term continuity in the accumulation of skills and entrepreneurial abilities, combined with a process of industrial transformation and renewal.

Suggested Citation

  • Bernard Musyck, 2003. "Institutional endowment, localized capabilities and the emergence of SMEs: from mining to recycling, the case of Freiberg (Saxony)," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 15(4), pages 273-298, October.
    • Handle: RePEc:taf:entreg:v:15:y:2003:i:4:p:273-298
    DOI: 10.1080/0898562032000058905
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    References listed on IDEAS

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    1. David, Paul A. & Wright, Gavin, 1995. "The origins of American resource abundance," Research Memorandum 017, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Meske, Werner, 1993. "Die Umgestaltung des ostdeutschen Forschungssystems: Eine Zwischenbilanz," Discussion Papers, Research Group Science Indicators P 93-401, WZB Berlin Social Science Center.
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    Cited by:

    1. Macpherson, Allan & Holt, Robin, 2007. "Knowledge, learning and small firm growth: A systematic review of the evidence," Research Policy, Elsevier, vol. 36(2), pages 172-192, March.

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