On average, the German startups surveyed as part of the DSM 2021 employ 17.6 people and plan to hire a further 8.7 new employees. Startups in the two German hotspots of Berlin and Munich are significantly larger on average: Berlin startups employ an average of 51.2 people and plan to hire 17.7 new employees. Munich startups employ an average of 40.3 people and plan to hire 17.9 new employees. Young companies from the Bavarian capital are thus growing faster than in any other German city.
With the high number of planned new hires, the search for personnel is becoming an increasing problem: 27 percent of the Investigation The startup founders surveyed already cite recruitment as their biggest hurdle—a 10 percentage point increase over the previous year. However, the biggest challenges remain customer acquisition (65 percent), product development (45 percent), and raising capital (36 percent).
“On the right track in terms of growth and diversity”
German startups are rating their business situation almost as positively as before the coronavirus crisis: In 2019, the Startup Monitor's business climate balance was 52.9 points. Last year, the economic barometer then plummeted to 31.8 points and recovered to 52.2 points this year. Another positive development: the proportion of female founders has increased from 15.9 percent last year to 17.7 percent.
"The pandemic has ruthlessly exposed Germany's deficits in digitalization. Startups offer solutions and are driving innovation for the entire economy. The study shows that our startup ecosystem is on the right track in terms of growth and diversity – but: in view of international competition, things must move much faster in both areas,"
says Franziska Teubert, Managing Director of the Federal Association of German Startups.
DSM 2021: TU Munich and Ludwig Maximilian University among top startup universities
Around two-thirds (65 percent) of the founders surveyed expressed positive views about their respective startup ecosystem. Thirteen percent are dissatisfied with the local startup network. In Munich, 77 percent of startups are satisfied with the ecosystem, and just under 8 percent are dissatisfied. This may certainly be due to the good access to graduates: Both the Technical University of Munich and the Ludwig-Maximilians University of Munich are among the top ten startup universities.
"Universities and research institutions are important places where innovative companies are created. To achieve this, however, they would have to incorporate the training and support of student entrepreneurs much more strongly into their DNA and make this a primary task alongside pure research,"
says Tobias Kollmann from the University of Duisburg-Essen.
"This also includes incorporating entrepreneurship into their degree programs earlier and more specifically, and allowing students to write a business plan as a final thesis to enable a seamless transition to a spin-off."
