Germany, a land of startups? Those days are long gone! This is also confirmed by statistics from the Chambers of Industry and Commerce, which have now been made public. According to the data, the number of consultations with prospective entrepreneurs at the chambers fell below 200,000 for the first time last year. By way of comparison: That’s about seven percent fewer than the previous year, and it’s also the lowest number since the survey began 15 years ago.
So are the many support programs and startup campaigns failing to bear fruit? That appears to be the case. The decisive reason for the downward trend, however, is the thriving job market. The pattern is familiar: When German companies are doing well, they hire new employees, and those interested tend to favor permanent employment over self-employment. Demographics also play a role in this trend: The age groups between 25 and 45—which are particularly active in starting businesses—are shrinking.
Currently, there are 4.4 entrepreneurs per 1,000 people of working age. In the United Kingdom, the figure is 8.3—almost twice as many—and in Israel, it’s as high as 11.6. Alarming: Even in 2004, both of these countries had higher startup rates. At that time, many startups in Germany were launched by people who were unemployed. In addition, access to startup funding for the unemployed was still relatively easy.
Another figure underscores the dire situation: 51.2 percent of the working population in Germany cite “entrepreneur” as a desirable career move. In the United Kingdom, 54.8 percent of all people of working age want to become entrepreneurs; in Israel, the figure is 61.5 percent—nearly two-thirds.
One bright spot in the DIHK study: 42 percent of all startup consultations conducted by the Chambers of Industry and Commerce (IHKs) were with women—and the trend is rising. However, it’s also important to note that these consultations do not always lead to self-employment. In the DIHK consultations, many women reported that they had not had the opportunity to save up start-up capital or build helpful professional networks. The DIHK is therefore calling on policymakers to create better framework conditions to improve the work-life balance.
The recent wave of refugees is also contributing to an increase in business start-ups in Germany. In 2016, for example, some 700 migrants inquired with the Chambers of Industry and Commerce (IHKs) about starting a business. Relatively speaking, the proportion is still small, but it is rising. According to experts, the first startups are emerging in retail, the restaurant industry, and, in isolated cases, the IT sector. In addition to financing difficulties, the Chambers of Industry and Commerce (IHKs) view legal uncertainty and a lack of German language skills as the main initial hurdles.
According to the IHKs, the biggest problem overall is bureaucracy. In nearly every consultation, founders report complicated regulations, reporting requirements, and forms. Innovative startups, in particular, want one-stop shops instead of a “marathon of government agencies.” They want to handle everything in one place. Furthermore, it should be possible to establish a business—including obtaining all necessary permits—within one month.
