Why is Germany less entrepreneurial? A behavioral reasoning perspective
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Why is Germany less entrepreneurial? A behavioral reasoning perspective Maha Aly1 · Galal Galal‑Edeen2,3
© Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract This study uses empirical data collected from the entrepreneurial working environments to examine and reason the effect of entrepreneurial behaviors on the stagnation of entrepreneurship in Germany and how these behaviors are influenced by the national cultural characteristics, practices and values. Using ethnographic research techniques and Grounded Theory method, we observe that the entrepreneurial behaviors—in the context of managing adversities for the first time—are impacted by the German cultural practices and characteristics: (1) “Do-it-Yourself” culture, (2) perfectionism and (3) social trust issues. Consequently, we suggest that these practices reflect the relevance of the behaviors’ reasoning to uncertainty avoidance and risk aversion as cultural values in Germany. This study describes and reasons the behaviors of entrepreneurs in their early venturing stage, and contributes to the new area of research that seeks more links between the entrepreneurial behaviors and the cultural values, and how both impact the entrepreneurial growth and success. Keywords Entrepreneurship · Entrepreneurial behaviors · Cultural values · Germany · Behavior reasoning · Entrepreneurial growth JEL Classification A13 · L26 · M13 · Z130
1 Introduction The entrepreneurial performance of Germany has been notoriously dismal. The paucity of entrepreneurial activity in Germany has not escaped the attention of policy makers and scholars. Entrepreneurship research responded by pointing out considerable deficiencies in the German entrepreneurial ecosystem, such as the lack of early stage financing and incentives for university-based startups (Fuerlinger et al. 2015).
* Maha Aly [email protected] 1
The Institute for Development Strategies, Indiana University, School of Public and Environmental Affairs, 1315 East 10th Street, SPEA Room 201, Bloomington, IN, USA
2
Cairo University, Cairo, Egypt
3
University College London, London, UK
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M. Aly, G. Galal‑Edeen
As policy responded to the entrepreneurial challenge confronting the country, Germany started to attract more young entrepreneurs and investors since the early 2010’s, when Berlin was celebrated as the “European Silicon Valley” (Neate 2014). Consequently, the number and the variety of working environments dedicated to entrepreneurs, such as workspace cafés, co-workspaces and serviced offices is growing. There were over 500 co-working spaces in Germany in 2020, dwarfing the paltry 337 in 2019, 237 in 2018 and even 10% fewer in 2017 than in 2018 (deskmag.com; & coworker.com). The German government supports entrepreneurship by providing “a dynamic ecosystem” that is based on social and human capital, is maintained by a clear political agenda in order to foster and promote entrepreneurship in general (Fuerlinger et al. 2015), and such national ecosystem impacts the
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