The State's Position in the World Economy and the Vulnerability of Middle-Income Groups: The Role of Startup Ecosystems in Structural Upgrading — A Comparative Study in Light of Dependency Theory and World-Systems Analysis

This working paper examines how a state's position in the world economy shapes the stability of its class structure, with particular attention to the erosion of middle-income groups and the spread of poverty and vulnerability. Drawing on dependency theory and world-systems analysis, it treats core, semi-peripheral, or peripheral position not as a deterministic cause but as a structural condition. That condition takes effect through four mechanisms: position in value chains and technology; exposure to external finance and foreign currencies; capacity for redistribution and social protection; and institutional quality and the presence of conflict. The study compares ten cases: Germany, France, the United States, Brazil, Argentina, Türkiye, Egypt, Tunisia, Syria, and China. It includes focused studies of Syria, Türkiye, and China and uses the latest indicators available through July 2026. It also introduces an exploratory Startup Support Institutionalization Index (SSII), which separates policy adoption from actual ecosystem strength. Core states are not immune to middle-class contraction, but strong institutions and safety nets keep shocks from becoming broad class collapse. Semi-peripheral states combine a substantial productive base with monetary fragility, spatial and ethnic inequality, or external financial dependence, so class mobility there is faster and more volatile. In peripheral economies, low productivity and limited fiscal space compound these pressures. Syria shows how conflict, institutional fragmentation, and asset destruction can turn inequality into widespread livelihood collapse. China is a transitional case that fits neither side of the core–periphery binary. The paper argues that dependency theory retains more explanatory force when combined with analysis of the state, institutions, and social policy. It also proposes that formal startup-policy institutionalization produces structural or class gains only where financial, technological, and institutional capacity turns firm creation into scale, productivity, and higher-value jobs.