Report: Strengthening entrepreneurship and economic development in East Germany - Lessons from local approaches


The report "Strengthening entrepreneurship and economic development in East Germany - Lessons from local approaches" is the result of a two-year work programme on the challenges and opportunities for entrepreneurship development in East Germany undertaken by the Organisation for Economic Co-operation and Development, through its Local Economic and Employment Development Programme (LEED), in collaboration with the Federal Ministry of Transport, Building and Urban Affairs (BMVBS), Angelegenheiten der Neuen Länder department. Over the period 2006-2007, a series of project meetings, study visits and workshops to selected localities across East Germany were organised.

This report is written for policy-makers and entrepreneurship development practitioners. For six themes brief overviews present policy issues and challenges discussed in literature with references to the East German context. In this way, the reader can draw upon the theoretical debate around the role of public policy as well as upon lessons from East Germany when developing new policies and strategies for entrepreneurship and SME development. A synthesis of identified challenges and good practice initiatives in entrepreneurship and enterprise development from local case study areas accompanies the discussion of appropriate policy responses in selected OECD countries.

The global assessment exercise of local entrepreneurship development practice also produced an on-line compendium of policy recommendations that can be accessed here.

For further information, please contact Jonathan Potter and Andrea-Rosalinde Hofer.

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Part I presents and discusses current challenges and opportunities for entrepreneurship and SME development in East Germany. The first chapter presents an analysis of the impact of existing regional differences, resulting from diverging geographic factors and inherited economic infrastructure, on entrepreneurship and SME development. In particular, demographic changes and the out-migration of young and qualified people pose a demanding agenda for policy. The second chapter presents an overview of the existing policy framework for entrepreneurship and SME development, including emerging trends in business start-up and development in East Germany with a focus on the local case study areas.


Part II is structured in six thematic chapters. Each chapter starts with a discussion of the theoretical and practical aspects of policy action in light of new policy approaches and options. References are made to good practice initiatives in East Germany and other regions in OECD member countries. Subsequent to this a summary of main findings from the local case study leads to a 'Checklist' of policy recommendations. Along with a selection of international learning models and good practice examples in East Germany, this final section of each thematic chapter aims to inspire policy innovation and the development of local approaches to strengthen entrepreneurship.

Thematic chapters:

  • Entrepreneurial culture and attitudes 
  • Modernising and diversifying SME
  • Financing entrepreneurship
  • University and entrepreneurship 
  • Rural entrepreneurship 
  • Entrepreneurship policy delivery


Part III concludes this report by summarising the key challenges identified for entrepreneurship and SME development in the East German regions. It gathers key recommendations on the role of policy in creating more and better jobs, and discusses which level of governance is most appropriate for the design, delivery and evaluation of policies, following the assumption investigated in this report that the local tailoring of policies can make a difference.




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