Study finds there is no silver bullet for strengthening regional propensity to start a business

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Successful start-up ecosystems are characterized by good transport and telecommunications infrastructure, a high population density, a high proportion of foreign citizens, and numerous qualified employees. IfM Bonn researchers found this and published results in their study, "Start-up activity at the district level and in independent cities: What characterizes successful start-up ecosystems?"

In order to answer this question, Dr. Rosemarie Kay and her team examined differences in the design of regional start-up ecosystems at the district level based on extensive data. For the first time, business start-ups in trade and the liberal professions were considered together.

"At first glance, cities seem to offer start-up founders better locational factors than rural regions. At the same time, there are also cities in Germany whose population has a below-average propensity to start a business. These are Wolfsburg (Lower Saxony), Bottrop (North Rhine-Westphalia), St. Wendel (Saarland) or Jena (Thuringia)," reports the head of the study.

In contrast, the IfM researchers found eleven rural districts where the propensity to start a business was above average in recent years. These outstanding rural districts include Marburg-Biedenkopf (Hesse), Miesbach, Bad Tölz-Wolfratshausen and Garmisch-Partenkirchen (all Bavaria) as well as the districts of Görlitz (Saxony), Dahme-Spreewald, and Teltow-Fläming (Brandenburg).

According to Dr. Rosemarie Kay, there is no silver bullet for developing an excellent regional start-up ecosystem. Nor do regional start-up ecosystems have to be outstanding in every respect to be associated with a high propensity to start up.

"Rather, we have found that specific strengths can compensate for specific weaknesses. In the case of the of Görlitz, for example, where many Polish-born construction workers are self-employed, the border location seems to have a positive effect. In other districts, universities or tourist offers can compensate for the regional weaknesses. In other words, the bundle of framework conditions conducive to can vary greatly from region to region. Ultimately, a good start-up ecosystem depends on a favorable interplay of different factors," says Dr. Rosemarie Kay. This interplay can stabilize start-up activity in a region even during a crisis, as another IfM study analyzing the COVID-19 pandemic shows.

More information: Research paper (in German): www.ifm-bonn.org/fileadmin/dat … d-Fakten-31_2022.pdf

Provided by Institut für Mittelstandsforschung (IfM) Bonn

Citation: Study finds there is no silver bullet for strengthening regional propensity to start a business (2022, September 7) retrieved 4 December 2022 from https://phys.org/news/2022-09-silver-bullet-regional-propensity-business.html
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