Start-ups: Entrepreneurial Spirit in Times of Crisis
#ZEWPodcastZEW Podcast with Hanna Hottenrott and Sandra Gottschalk
In order to gain insights into start-ups and entrepreneurship, academic research depends on data that must be collected. This is achieved through panels like the Start-up Panel. This annual survey, conducted in collaboration with the Institute for Employment Research (IAB) of the Federal Employment Agency, is marking its 15th anniversary in 2023. Join us in the latest ZEW podcast episode as Dr. Sandra Gottschalk and Professor Hanna Hottenrott, both experts in innovation economics, delve into the essence of the IAB/ZEW Start-up Panel, its scope, and the valuable insights it has yielded, all in conversation with Bastian Thüne.
“The Start-up Panel is an annual survey of approximately 5,000 to 6,000 newly established businesses. Our focus during this survey revolves around understanding the start-up landscape, the time of founding, the team composition, and, especially, the innovation and other activities undertaken by these young companies,” explains Hanna Hottenrott, head of the “Economics of Innovation and Industrial Dynamics” Unit at ZEW Mannheim, elaborating on their approach. Her colleague, Sandra Gottschalk, responsible for managing research data at ZEW, adds, “The basis of the Start-up Panel is the Mannheim Enterprise Panel, which covers virtually all registered businesses in Germany.”
Hospitality sector on the upswing
Drawing on data from the Start-up Panel, Sandra Gottschalk illustrates that the COVID-19 pandemic and the global supply chain disruptions of recent years had minimal impact on start-up activity. In contrast, the Russian invasion of Ukraine did leave its mark, “particularly within energy-intensive sectors of manufacturing.” However, she underscores, “The hospitality sector managed to rebound despite the war in Ukraine. In fact, it stands out as one of the few sectors that experienced a remarkable upswing.”
Entrepreneurial personalities
In addition to exploring shifts in start-up dynamics, the two researchers also take a closer look at those who initiate businesses. The defining trait of these entrepreneurial individuals is what’s referred to as “entrepreneurial orientation” – in other words, individuals who are “more inclined to take risks and describe themselves as very open and innovative. This quality is, indeed, a prerequisite for embarking on such a venture,” says Gottschalk. Hottenrott underscores the significance of a solid education, noting that “both vocational training and academic qualifications can be advantageous.” She also emphasises that, apart from expertise, the ability to “identify promising ideas and possess the courage to pursue a start-up” is essential.
Uncertainty in funding future start-ups
Beyond innovative ideas and the right personal qualities, entrepreneurs also require access to funding opportunities. There is a trend toward increased venture capital, but whether this trend will persist remains uncertain. Only in the coming years will we see how rising interest rates will impact the financing landscape for start-up ventures. Additionally, Hottenrott points out that “there are still significant challenges for start-ups,” highlighting that “Germany is not the most start-up-friendly country. There are substantial bureaucratic and regulatory hurdles that now add to the difficulties caused by high energy costs and other resource expenses.” This means that there will still be plenty for the Start-up Panel to explore in the future.
