SMEs in the idea of Ludwig Erhard’s Social Market Economy Matthias Schäfer Head of Team Economic Policy Konrad-Adenauer-Foundation, Berlin 4 The „Entrepreneur“ in the eyes Ludwig Erhard Matthias Schäfer Head of Team Economic Policy [email protected] Schmöckwitz, 22 August 2018 www.kas.de Content › Ludwig Erhard and the model of Social Market Economy › The role of entrepreneurship in a Social Market Economy: The „honourable“ entrepreneur › The current situation of entrepreneurship in Germany The „Entrepreneur“ Ludwig Erhard › 4 February 1897 – 5 May 1977 › 1949-1963 Minister of Economic affairs › Chief architect of the „Social market economy“ and the „economic miracle“ › 1963-1966 Chancellor of West Germany The „Entrepreneur“ 7 © Bundesarchiv The social market economy › Is based on „free entrepreneurship“ › Has an economic and socio-political function › Regulatory Policy instead of Planned Economy The „Entrepreneur“ 8 © Bundesarchiv Economic Models after WW II Laissez-faire liberalism Socialistic Centralised Economies e.g.: UdSSR e.g.: : USA 1. Socialism will always fail!! 2. Capitalism (understood as laissez-faire liberalism) is curable!! The social market economy How to cure capitalism? Keynesian thinking: • Public intervention during an ecomimic crises via fiscal policy or monetary policy • Public withdrawing in times of ecomic upsing Ordoliberal thinking of founding fathers of Social Market Economy (Walter Eucken, Freiburg School of Economics): • Public framework for the markets (automatic stabilisation in opposition to market intervention) • Role of the state as a referee • Public intervention only in cases of market failure and in market conform ways The social market economy › Is based on „free entrepreneurship“ › Has an economic and socio-political function › Regulatory Policy instead of Planned Economy The „Entrepreneur“ 11 © Bundesarchiv The social market economy The „Entrepreneur“ 12 The honourable Entrepreneur › Autonomous › Liability: › He`s responsible for both gains and losses › Has a personal stake in his enterprise › Responsible for Product Development and Innovation › Acts independently of government control The › Is either owner (personal enterprise) or manager (managerial enterprise) „Entrepreneur“ 13 The current situation of Entrepreneurship in Germany The „Entrepreneur“ 14 The amount of SME is high and dynamic The „Entrepreneur“ © Statistia, chart 1: KAS 15 The amount of managers increases with the size of an enterprise The „Entrepreneur“ © BMAS 16 Few innovative SMEs The „Entrepreneur“ 17 © Statista In average, self-employers earn more but their salaries differ Employees Self-employment Solo self- Self-employment with employees employment The „Entrepreneur“ Salary per month (€) 18 SMEs are mainly responsible for apprenticeship The „Entrepreneur“ 19 © KFW Research Thank you for your attention! Find more information on http://www.kas.de/ The „Entrepreneur“ 20.