Where and under what conditions are digital companies founded?

The study entitled ‘Infrastructure Required, Skill Needed: Digital entrepreneurship in rural and urban areas’, conducted by Christian Bergholz (Thünen Institute) with Rolf Sternberg (Leibniz Universität Hannover) and Moritz Lubczyk, Lena Füner, and Johannes Bersch (ZEW Mannheim), analyses the spatial conditions under which digital companies are founded. Based on data from all German municipalities, our results show that the availability of broadband internet is essential for the likelihood of digital companies being founded. If this basis is available, it requires people who know how to use this infrastructure entrepreneurially, and these are particularly people with a university degree, as our results show. Accordingly, the emergence of digital start-ups particularly depends on the concentration of well-educated people in a community. This applies to both rural and urban areas, although agglomeration effects amplify the effect in urban areas. Nevertheless, rural areas can also benefit from the increasing digitalisation of society in general and the economy in particular. The extent to which these digital companies can contribute to the development of rural areas will be the subject of future research.

Link to the article: https://doi.org/10.1016/j.jbvi.2024.e00488

The study was conducted as part of the cooperative project Rural Entrepreneurship. It was funded by the Federal Rural Development Program.

Contact: Dr. Christian Bergholz