Nearly one in twenty adults in Germany (4.6 percent) is the founder of a new business. Another 2.9 percent are currently in the startup phase. That sounds respectable for a country of medium-sized businesses and corporations—but in international comparison, Germany ranks among the lowest.
Compared to other highly developed countries, Germany's start-up rate is not as strong, ranking lower along with Italy, Spain, France, the United Arab Emirates, and Greece in the "innovation-based" group of 27 countries. Women are particularly rare in Germany: Only 3.1 percent of the women surveyed took the step into self-employment—ranking last in the comparison group.
In another 38 countries, randomly selected citizens were also surveyed about their entrepreneurial activity. However, due to different framework conditions, the study authors say these results are not comparable.
Only a few start up out of necessity
Looking at the development of Germany over time, the situation looks somewhat rosier: Despite persistently declining unemployment figures, the proportion of entrepreneurs in the overall population remains stable. One reason for this could be immigrants, whose entrepreneurship rate usually exceeds that of the resident population.
Also encouraging: for every founder born out of necessity ("lack of employment alternatives"), there are three and a half citizens who start a business because of a recognized market gap. The latter group typically shows better growth prospects than the former. In international comparison, however, Germany ranks only in the lower middle range with this ratio. In the leading country, Sweden, there are almost 20 opportunity-based start-ups for every one born out of necessity ("lack of employment alternatives").
Funding programs great, start-up culture bad
German risk aversion is well known as a barrier to starting a business. 44 of those surveyed would not even start a business for fear of failure, and only 37 believe they possess the necessary skills to do so.
In all 65 participating countries, experts were also asked for their assessment of the local framework conditions. This will allow for a more detailed analysis of potential and obstacles. The results in Germany: The physical infrastructure, the appreciation of new products, and the protection of intellectual property were rated positively. The experts see a need to catch up in school-based start-up training, political commitment, and regulations and taxes. The experts identify social norms and values as the top obstacle. In contrast, they see public funding programs as a major advantage.
