A plea for varieties of entrepreneurship

Andrea M Herrmann

doi:10.1007/s11187-018-0093-6

Abstract

Research into the link between national institutions and entrepreneurship is characterized by three shortcomings: First, clear-cut concepts of institutions are rare. Second, a parsimonious understanding of how a few core institutions influence entrepreneurship is missing. Third, scholars often ignore that incrementally innovative ventures constitute a distinct (and under-researched) type of entrepreneurship next to the (over-researched) form of radically innovative, high-growth or high-tech entrepreneurship. By addressing these three shortcomings, the Varieties-of-Capitalism (VoC) literature can explain how a core group of distinct national institutions facilitate the development of different types of entrepreneurship between countries. In particular, the VoC framework illustrates the comparative institutional advantage that continental European economies offer to incrementally innovative ventures. Applications of the VoC reasoning to entrepreneurship studies would thus allow researchers to, first, perform focused rather than eclectic analyses of institutional influences on entrepreneurship. Second, it would pave the way for research into institutionally induced equifinality. Third, entrepreneurship research could move away from its wishful ideology displaying radically innovative entrepreneurship as the most desirable form of entrepreneurship. As a consequence, policymakers could target entrepreneurial support measures more specifically to their economy’s institutional environment.

Highlights

Over the past two decades, the Varieties-ofCapitalism (VoC) literature—going back to the work of Hall and Soskice (Hall and Soskice 2001a)—have become a widely applied framework in the political sciences, in political economy and economic sociology alike
The VoC literature highlights how a distinct set of education-related and labour-market institutions, as well as institutions influencing the access to shareholder capital and opportunities for joint R&D collaborations support different types of entrepreneurship: While the institutional environment of the USA facilitates the development of radically innovative ventures, Germany’s institutions lead entrepreneurs to rather set-up incrementally innovative ventures
A plea for varieties of entrepreneurship constellations facilitate different types of entrepreneurship, which implications arise for entrepreneurship research and policymakers? To begin with, entrepreneurship research would benefit from assuming a more parsimonious approach towards investigating the link between institutions and entrepreneurship

Summary

Introduction

Over the past two decades, the Varieties-ofCapitalism (VoC) literature—going back to the work of Hall and Soskice (Hall and Soskice 2001a)—have become a widely applied framework in the political sciences, in political economy and economic sociology alike. Policymakers across Europe explicitly or implicitly aim to facilitate high-growth (Silicon Valley) entrepreneurship back home (Commission 2010; OECD 2002; see Hölzl 2009; Mason and Brown 2013: 214) Though, this focus on radically innovative entrepreneurship is problematic for various reasons: First, it conveys the impression that less innovative types of entrepreneurship are second best as they grow less rapidly (see, for example, Amat and Perramon 2010; Davidson and Segerstrom 1998; Hölzl 2009; OECD 1998; OECD 2002; Schreyer 2000).

Theoretical foundations

Empirical evidence

Discussion and conclusions