Entrepreneurship and small and medium-sized enterprises in the USA and Germany

Germany U.S. SME findings

The overarching interest induced by the initial research proposal and the subsequent literature review has been to identify a core distinction between the United States and Germany with regard to small and medium business enterprising. Using the distinctions promoted by the literature review, survey respondents from both Germany and the United States would answer a series of questions concerning the relationship between business enterprising and the various aspects of entrepreneurship represented or absent in the cultural fabric. The findings here revolve on the findings of import in our literature review and how they relate directly to data gathered from survey respondents.

Evidence in our literature review would produce a basic understand that the United States has by a matter of principal and identity long maintained an interest in entrepreneurial development. Particularly for those with ambitions of the creation of a viable SME, the United States appears to be more culturally fixed on the idea of the self-made man, the dynamic enterpriser and the competitive new money innovator. It is thus that the literature aspect of our research has produced the contention that the United States has historically placed a greater value and emphasis on the right, opportunity and ability of any individual to develop and steward a business effectively.

As our research tends to suggests, there has been a proclivity on the part of the European powers, to rest somewhat on their laurels in recent decades. Most notably in the respect that there is a distinct European cultural tendency toward a lesser interest in the type of innovation and orientation that drives a smaller firm to succeed and that drives a medium firm to the threshold of transition into a corporate entity of social and economic importance. Phelps (2007) characterizes the gap between the United States and such European counterparts as Germany as resulting from a dearth within the latter of individuals and groups with a feeling of the cultural impetus to succeed in development.

Phelps contends that "there is evidence of such a dearth. Germany, Italy and France appear to possess less dynamism than do the U.S. And the others. Far fewer firms break into the top ranks in the former, and fewer employees are reported to have jobs with extensive freedom in decision-making -- which is essential at companies engaged in novel, and thus creative, activity." (Phelps, 1) the implication is that in such contexts, the will for individual or independent success becomes stifled, with innovation and success seeming to be inaccessible for those who are not already at the top range of the hierarchy.

Still, it would be the ultimate resolution of this research that the globalizing economy is having a definitely positive impact on the degree to which Germany's culture of entrepreneurship has evolved. Today, its relative disinclination in comparison to the United States is countered by its comparable acceleration in economic importance compared to itself of just a decade prior and to other nations in Western Europe.

A period of just a few years, the German venture capital industry has transformed itself from a small, stagnant and obscure niche industry into one of the fastest growing and most visible segments of the economy." (Hellmann, 1) Indeed, we would not be incorrect to attribute a portion of Germany's modern ascendance to the top of the Western European class to this important change. The embrace by the German culture of enterprising growth has highlighted the capitalist implications of global free trade, which inherently opens insulated or resistant cultures to open competition and similarly introduces the culture to innovative technology and ideas. Heightened accessibility to such trends invites participation on a broader level and creates the sense of opportunity for those groups with the ingenuity to improve, refine and advance existent forces of technological evolution. This has the tendency to create an economy of greater innovation in which the pool of enterprising organizations is wide and more varied. The outcome is a distinctly greater capacity for innovations from outside of Germany to be molded into distinctly German enterprise output.

The formal research process, which was engaged through a survey equally distributed to small and medium enterprise administrators and leaders in both the American and German entrepreneurial contexts would produce something of the balance suggested here, while also confirming the biases conveyed toward greater entrepreneurial opportunity in the United States.

For instance, out of the 50 German respondents, 22 reported to starting an enterprise by matter of happenstance or opportunity. Some respondents spoke of chance relationships with future partners and investors. Others spoke of capitalizing on a surprising aptitude for independent leadership and ingenuity in a business context. The statistically significant portion of German respondents indicated a tendency toward motives which were based less in cultural indices than in personal experiences.

This would differ considerably from American respondents. Here, 29 out of 50 interviewed would report to such motives as wanting to control one's own occupational fate, or would confide an unwillingness or disinterest in working according to a large corporate scheme. Such is to say that the research underscoring the development of survey questionnaires would here be affirmed by the indication that cultural imperatives played a significant role for many American respondents who had found an entrepreneurial path to earning a living.

This provides a foundation for the resolution that the anticipated outcome was achieved through the experimental process. Namely, research confirmed what had been overwhelmingly reported by our research as a direct connection between cultural tendencies and entrepreneurial tendencies which has in many ways advanced American entrepreneurship with relative vigor where some cultural characteristics cause the Germans some resistance to this spirit. The general tone of responses derived from the two groups would demonstrate a greater tendency toward singular and individualized reasons for entering into SME development for German enterprisers and, by contrast, a greater tendency for American enterprisers to site causes from within the American corporate culture, either positive or negative, inclining the move for independence there reflected.

Another interesting, and perhaps somewhat surprising finding is the reality that there are far more immediate incentives for American entrepreneurs to take the risky leap that inherently is enterprising. Of the 54 American respondents, 34 reported to receiving large bank loans, being awarded public grant money or finding venture capital investment as the financial basis for the creation and establishment of their various businesses. Only 8 respondents reported to using a personal fortune or to having access to a financier of close personal relation through whom the business gained its initial economic grounding.

From this, it is possible to argue that there is a greater push by forces external to the enterprising group or individual which intend to help stimulate innovation and forward momentum, as well as to gain opportunity for some stake in this momentum.

In Germany, finding were less illustrative of this pattern. Of the 50 German respondents consulted, it was found that only 19 had received public funding, significant loans or venture capital investment. A nearly identical figure, 18 would report to staking a personal investment in the initiation of an enterprise, indicating an internal imperative rather than a sociological one for the capability to begin an SME. This is to suggest that the experimental process reveals a roughly equivalent tendency in German entrepreneurs to find and/or seek out funding through an external source and to be already possessed in the personal means to make such an enterprise succeed. As with the matter of German motives for engaging in entrepreneurial activities, research here finds that the means for engaging in entrepreneurial activities is not infrequently descended from personal or individual means.

This is to indicate that in contrast to the American respondents, German respondents would tend less to provide evidence of some sociological or cultural imperative underscoring the availability of the means to initiate an enterprise. Instead, many of the respondents interviewed seemed to fit the characteristics of cultural outliers, guided by an individuality and independence connected to personal rather than external factors. American respondents would more frequently demonstrate the close connection between small and medium business enterprise and a set of larger institutional forces which may be credited with stimulating them. The culture of capital development translates in the United States into an important aspect of a dynamic and competitive marketplace. There are therefore collective motives for those individuals, groups, organizations and agencies taking an active part in the American economy to justify placing a stake in the development of business enterprises of all shapes and sizes.

Without question, it does apply in Germany that individuals with an entrepreneurial tendency will recognize the collective opportunities in market development and diversification. However, the less directly entrepreneurial tendencies in the culture as explored throughout the literature review are here manifested in an indication that there are perhaps fewer institutional opportunities for individuals without the means to independently conduct startup operations for a small or medium scaled enterprise. This does correspond directly with literature findings which have suggested that greater tax incentives in the American economy, for one example, will tend to help individuals of more modest capacity enter into the marketplace. While the barriers in Germany to such independent enterprising are increasingly being diminished in the face of opening global trade routes, it is still the case that Germany's public and private means to stimulating independent enterprising are less accessible and less plentiful than those found in the United States. Though in many ways, this is something which is subject to change based on such fluctuations in the economy as the pressures on the value of the American dollar today as compared to the relative success of the Euro which underscores the unionized German economy, the research and findings produced by the survey questionnaire considered here indicate a culture which is more predominant in the United States. The concern of this culture is with the variation of the marketplace through the entrance of a multi-stratified class of contenders.

An important finding which does not refute our study's primary resolutions but which does both suggest a coming change in current entrepreneurial imbalances and a subject for further study, is that respondents seem to be reflexive in some manner of the globalizing forces at play in the market. Especially for Germans, questions such as intended plans for the future and immediate growth targets would be met with frequent references either to ultimately competing on a global level or filling gaps left in the local market with acknowledgment of the impact levied on the landscape by globalization. Particularly, when speaking of future strategies, 22 out of 50 German respondents would mention either 'free trade,' 'globalization' or the "EU." This compares with balance to the 24 American respondents of 54 study participants who would mention either 'free trade,' 'globalization,' or 'international growth.' These can be considered relatively equivalent degrees of understanding as to the relationship between SME development and globalization in either context. This is an outcome which suggests that patterns in Germany may well be subject to change in the future, despite the resolutions yielded here.

Conclusion:

Ultimately, the findings which have been produced by the survey here conducted would endorse the overall argument that cultural factors have long promoted a distinction in entrepreneurial tendencies between the United States and Germany where the former places a greater deal more emphasis on independent business enterprising than does the latter. Indeed, the survey respondents would produce the qualitatively observed finding that in terms of both motive and means, American entrepreneurs would be illustrative of a culture where small and medium enterprise orientation is encouraged and supported through various sociologically induced avenues. By comparison, it was found that the German entrepreneurs who responded to the survey were less likely than their American counterparts to be either motivated or funded by avenues caused to existence by cultural or sociological factors. Instead, there appears a greater likelihood amongst German entrepreneurs to reflect a motive and a means for entrepreneurship with individual and personal implications. This tends to suggest that compared to their American counterparts, German respondents tend not to reflect specific cultural patterns relating to entrepreneurial activity. This is to say that where we may not necessarily conclude that there is a pattern which dissuades or restrains German entrepreneurs from engagement in the process, we can conclude that there is an apparent pattern whereby lesser opportunity or encouragement exists to help stimulate engagement in the process.