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The purpose of this paper is to review the results of studies that investigate the most important active labour market policy (ALMP) measures in Germany. A focus is also on programmes devoted to foster entrepreneurship which can make important contributions to a country’s growth and social welfare.

The study relies on quantitative and qualitative assessments and a comparison of results of previous studies on ALMPs.

The available evidence suggests that most ALMP measures increase labour market prospects of the participants. In particular, evaluations of the entrepreneurship promotion activities show high success rates as well as high cost efficiency. The bulk share of participants of entrepreneurship measures is still self-employed after several years and nearly one-third of these businesses had at least one employee. The authors mention problems regarding the evaluation of previous programmes and highlight future challenges of German ALMP.

This is the first study on ALMP that has an extensive and explicit focus on entrepreneurship-promoting programs.

We investigate regional differences in the level and the development of regional new business formation activity. There is a pronounced variance of start-up rates across the regions. The level of regional new firm formation is rather path-dependent resulting in relatively small changes. The main factors determining the level of regional start-ups are innovative activity and entrepreneurship. These factors are also responsible for changes in the level of regional new business formation. The growth of regional demand and regional unemployment do not play a significant role for the change of regional start-up activity. Steering innovation and creating an entrepreneurial atmosphere could be an appropriate starting point for policy measures that try to promote start-ups. Our empirical evidence strongly suggests that such measures may have significant effect only in the long run.

Looks at problems and experiences of the so‐called “bottom‐up” transformation of the post‐socialist countries of Eastern Europe. Bottom‐ up transformation stands for the change of economic structures by means of new enterprises and already existing private firms. Discusses the experiences with the performance of small and new firms in the countries of the West, the potential role of small firms in post‐socialist countries as well as the prerequisites and impediments to the establishment of an economically strong small‐firm sector. Based on information on the development of the small‐firm sector in post‐socialist countries during the past years, analyses the relationship between private‐sector share and economic performance. Draws conclusions concerning implications for the future economic policy, the main conclusion being that bottom‐up transformation may be the only viable way for post‐socialist countries of Eastern Europe to transform but this way requires thorough support by government policy.

This chapter utilizes German tax data to present evidence about the direct and indirect effects of new firm formation. Cohort analysis is applied to investigate survival, sales, inputs, and value added of start-up firms. Most dropouts occur in the early years. We show that start-up microenterprises increase economic vitality directly. Sales and value added are in an approximate proportion of 3:1. With respect to the indirect effects of new firms, we find that one Euro of sales induces considerable indirect effects because 66 Cents are used to buy products and services from incumbents. For this reason, new firms substantially promote economic prosperity of incumbents. Sectoral differences are also indicated, with the manufacturing industry generating highest sales and relying most heavily on inputs in the early periods.

This volume outlines a new framework for analysis of democratic participation and economic growth. The new framework joins two past traditions. Their background histories are clearly separate. Democratic participation ideas come mostly from Alexis de Tocqueville, while innovation/bohemian ideas driving the economy are largely inspired by Joseph Schumpeter and Jane Jacobs. New developments building on these core ideas are detailed in the first two sections of this volume. But these chapters in turn show that more detailed work within each tradition leads to an integration of the two: participation joins innovation. This is the main theme in the book’s third section, the buzz around arts and culture organizations, and how and why they are critical drivers for the new democratic politics and cutting edge economies. Buzz enters as a new resource, with new rules of the game. It does not dominate; it parallels other activities which continue.