Ever since shares on Germany's Neuer Markt collapsed under their own weight, the reaction of commentators and investors has been almost as hysterical as the irrational exuberance that created the bubble in the first place.

Hindsight is always perfect and identifying scapegoats serves little purpose. Nevertheless, there are some lessons to be learnt.

The Neuer Markt was created to supply high-growth and technology companies with risk capital. For as long as things went according to plan, it was the darling of the media. Young entrepreneurs whose start-ups went public were accorded the status of film stars. But it did not require a Nobel Prize in economics to realise that many of the equity valuations were unsustainable. Quite simply, some investors got carried away.

The massive correction in the price of technology stocks is not a purely German phenomenon, however, but a worldwide trend. Having peaked at more than 5,000 points, the Nasdaq now hovers around 2,000.

Even so, the US correction has been less severe than Germany's, because of Nasdaq's relative maturity. Nasdaq has a core of blue-chip technology stocks that, although depressed in valuation, are still outstanding companies. The Neuer Markt is four years old - too young to nurture a Microsoft, an Intel or a Cisco.

In addition, the American attitude towards market volatility is more mature. Its equity culture is more patient, more risk tolerant and more understanding of the inherent risks in entrepreneurial capitalism.

None of this means that everyone involved in the Neuer Markt is beyond criticism. The investment banks deserve to be singled out for their sloppy research reports urging investors to buy at ludicrous valuations. Never wanting to slight a client and lose potential corporate fees, research analysts and bankers pushed these equities with reckless abandon.

Some responsibility for the meltdown rests with the investing public. Greed created the bubble and fear burst it. Investors now have the opportunity to sift the embers for true diamonds.

In retrospect, it can also be argued that Deutsche Borse, which created the Neuer Markt, could have been more selective in its listings. But at the time there was enormous pressure to accept initial public offerings from a variety of fast-growing industries, both national and international. And - although the general public may not be aware of it - the bourse did reject a large number of entrepreneurs that applied to join the market.

It should also be remembered that the stock exchange's role is not to express opinions on valuations or to regulate prices: it is simply to operate the marketplace.

Last, the meltdown demonstrates that the ordinary investor needs to be better educated about the convergence of venture capital markets and stock exchanges. Critics in the media who have been so quick to attack the Neuer Markt might reflect on their responsibilities in this area.

It used to be the case that the venture capital market took most of the risks of entrepreneurial capitalism. Recently, the start-up maturation process was shortened. Like other exchanges, the Neuer Markt began to list companies that would have raised funds in the venture capital market, where sophisticated investors understood the risks.

Whatever the pain now felt in financial markets, the Neuer Markt's impact on Germany has been positive. With the emergence of a new breed of capitalists willing to create wealth and to take risks, Germany has finally been recognised as a place of entrepreneurship. Neuer Markt has attracted a vast amount of badly needed private equity and venture capital into the economy.

It has brought new expertise to German financial institutions. In untypical fashion, German banks moved quickly to make the most of profit opportunities on Neuer Markt, building new business divisions and hiring and training young people to analyse and invest in technology. As a result, German banks have gained some skills to compete against US investment banks in the lucrative area of technology financing in the next growth cycle.

Neuer Markt has demonstrated to the world that technology can be produced in Germany not only by household names like Siemens and SAP but also by small and mediumsized enterprises and start-ups that rival the best companies in Silicon Valley. Entrepreneurial capitalism, the type of market capitalism displayed on Neuer Markt, was always going to be a rough ride. The Americans understand this all too well.

Germany, and the rest of Europe, must prepare to meet the challenge of a super-competitive US and a resurgent Asia. Its future lies not on the paper-strewn desks of Eurocrats in Brussels but in cellars and garages across the continent where creative minds are sweating over new ideas. The Neuer Markt, and exchanges like it, are part of that future.

The writer is a former head of the Neuer Markt