Regions such as Silicon Valley have a strong reputation as a fertile ground for start-ups due to the pervasive entrepreneurial spirit among residents and professionals. Drawing inspiration from these success stories, policymakers worldwide strive to cultivate local entrepreneurship cultures which starts with creating a positive image of entrepreneurs. Growing evidence suggests that fostering an entrepreneurial culture can significantly contribute to economic development during times of structural and socioeconomic shifts. For instance, in the northern Netherlands, where energy transition poses challenges, entrepreneurial and innovative approaches may prove more effective in addressing these structural changes. How to achieve an entrepreneurial culture and how to improve the image of entrepreneurs?

The image of entrepreneurs and the social acceptance of entrepreneurs are important elements of a (local) entrepreneurship culture. Therefore, I have investigated together with Viktor Slavtchev whether TV can affect entrepreneurial choice and the perception of entrepreneurship. To this end, we explored the natural experiment of German separation and re-unification where the Western part developed into an entrepreneurship-facilitating market economy after World War II while the East became an anti-entrepreneurial socialist centrally planned economy. In some regions of East Germany, it was possible to receive West German TV while this was not the case in some other places. For example, it was not possible to watch Western TV around the city of Dresden, which implied that the area was called the “valley of the clueless” by the rest of the GDR population.

Western TV portrayed entrepreneurs in shows, series, and news much more positively than in the socialist TV in the East. We find that start-up rates after German re-unification were particularly high in East German regions where Western TV was available during separation. Hence, watching TV can affect start-up activity. We also observe that children of parents living in regions where Western TV could be received have higher entrepreneurial intentions. This suggests an intergenerational transmission of entrepreneurial values.

A crucial inquiry stemming from our research pertains to the extent of policies aimed at fostering entrepreneurship and cultivating an entrepreneurial mindset within the local community. Initiatives such as portraying entrepreneurs positively in the media and implementing local awareness campaigns that facilitate entrepreneurship could serve as effective starting points. However, it is important to recognize that policies focused on stimulating regional entrepreneurship and nurturing an entrepreneurial culture may need considerable time before they have effect as we know from previous research on the persistence of regional differences in entrepreneurship. Thus, cultivating an entrepreneurial ethos and enhancing the entrepreneurial attitude among the local populace is a strategic and long-term endeavor.

Author: Michael Wyrwich - m.wyrwich rug.nl

Reference:

Slavtchev, V. and M. Wyrwich (2023), The effects of TV content on entrepreneurship: Evidence from German unification, Journal of Comparative Economics, 2023, Vol. 51, 696-721, https://doi.org/10.1016/j.jce.2023.01.008