The book Regional Trajectories of Entrepreneurship, Knowledge, and Growth: The Role of History and Culture summarizes and extends research conducted by the authors, Michael Fritsch and Michael Wyrwich, during the past decade. Their comprehensive empirical analyses consider Germany, which saw disruptive shocks to its social, political, and economic environment beginning in the early twentieth century. This is the background upon which Fritsch and Wyrwich try to find the answers to questions such as why some countries or regions are more prosperous than others and why certain countries and regions are more seriously hit by exogenous shocks and suffer for longer periods of time, while others show a quick recovery. The book focuses on regional sources of growth and the effect of relevant factors at a national and international level across regions.

The book starts from the idea that the first consideration regarding the differences between regions is the considerable diversity across regions regarding the resources for growth (knowledge, talent, behavior). Second, it presents regions’ response to global and national challenges. The authors go beyond recognition of “region matters” for economic growth by analyzing long-term trajectories of regional development in the sense of regional economic and social histories.

In the Introduction, the authors explain that regional differences at the level of entrepreneurship (measured by self-employment and new business formation) tend to be rather persistent over the long period of their analysis. Given the disruptive changes to socioeconomic conditions in Germany, the authors argue that a persistent level of regional self-employment and new business formation reflects a regional culture of entrepreneurship. Such a regional entrepreneurial culture can be understood as an informal institution that survives drastic changes to the formal institutional framework.

Starting with the second chapter, “Entrepreneurship Culture and Regional Development,” the authors present the notion of formal and informal institutions and provide a detailed characterization of the regional culture of entrepreneurship. In terms of applicability, the persistence of regional entrepreneurship is demonstrated through studies of established market economies such as West Germany, the Netherlands, Sweden, the United Kingdom, and the United States. These studies show that regional start-up rates tend to be relatively persistent over periods of one or two decades. Regions that have a relatively high level of self-employment and new business formation today can be expected to also experience high levels of entrepreneurship in the future. In the opinion of the authors, policy must strengthen and reinforce the existing elements of a culture of entrepreneurship by supporting the preconditions for self-employment and promoting successful entrepreneurial role models.

The third chapter, “Setting the Stage: Self-Employment and New Business Formation in Germany 1907, 1925 and Today,” brings to the forefront a brief overview of German history since the early twentieth century. Between 1900 and 1950, Germany and all of its respective historical regions were the focal point of several catastrophic events: World War I, hyperinflation, economic crisis, the Nazi regime, and World War II. The authors introduce the primary data sources that are used in the analyses. Finally, the authors describe the regional structures of self-employment and new business formation in both the early twentieth century and today.

The thorough analysis conducted in the fourth chapter, “The Persistence of Regional Entrepreneurship,” allows the authors to put forward three different scenarios: a persistence of regional entrepreneurship in a stable environment—West Germany from 1976 through 2014; a persistence of regional entrepreneurship in the face of two world wars followed by significant in-migration—West Germany from 1907 through 2005; and a persistence of regional entrepreneurship in the face of two world wars, forty years of a socialist regime, a shocking transformation process, and a massive out-migration—East Germany from 1907 through 2014. Fritsch and Wyrwich reveal the important role played by entrepreneurship and entrepreneurial culture in regional development, which incorporates the challenges of the transformation process relatively well.

The fifth chapter, “The Case of East Germany,” focuses on the impact of socialist institutions and policies on regional self-employment and entrepreneurial activity. The authors make an interesting comparative analysis of the regional dynamics of entrepreneurship between the socialist era and after. This review of entrepreneurial activity and self-employment between East and West Germany allows the reader to observe the relative impacts of formal and informal institutions on regional growth.

In Chapter 6, “Regional Entrepreneurship Culture and Growth,” the authors examine the effects of entrepreneurship on regional development and the relationship between a regional culture of entrepreneurship, start-up activity, and regional development. The next chapter, “The Role of Knowledge,” offers current levels of new business formation in technology-intensive industries that can be regarded as being particularly important for regional growth.

The eighth chapter, “Traditions of Self-Employment and the Entrepreneurial Personality Profile of the Population,” tests the conjuncture that a regional tradition of entrepreneurship indicates a regional entrepreneurship culture. In the end, the book brings to the reader’s attention the results of this research, drawing conclusions for theory, discussing policy implications, and outlining avenues for further research. At the same time, the authors persuasively demonstrate that informal rules tend to be more persistent than formal ones and that formal rules can stimulate the level of entrepreneurship and the emergence of an entrepreneurial culture.

In conclusion, this book confirms the fact that historically determined informal institutions play an important role for regional entrepreneurship and development. Such informal institutions are shaped in a way that facilitates entrepreneurship, and it is likely that they will lead to a long-lasting increase in the level of start-up activity. Informal institutions in favor of entrepreneurship reflect a long-standing entrepreneurial culture. Any attempt to understand regional differences in entrepreneurship should try to assess and account for such region-specific informal institutions. The book is rich in academic references relevant to the subject, and the authors are keen observers of regional development trajectories over longer time spans.