Fewer businesses started in Germany

The number of newly started businesses in Germany decreases despite programs and support for start-ups and entrepreneurs. Regarding internationally growing venture capital investments, Germany lacks behind. 

The request of the Grüne in the German Bundestag shows that the number of company founders in Germany has decreased continuously. The Rheinische Post reports that, according to the request, in 2014, 309.000 persons have founded a business or entered self-employment. In 2010, 417.000 have gone this step. 2004, even more, 572.000, founded a business.

Just recently, Germany’s economic minister Sigmar Gabriel said on a conference for start-ups: “We want to renew the founder spirit. Our goal is to encourage more people to found a business.” According to Germany’s opposition, the reality is far of the government’s goal. “The federal government talks much about innovation and founding culture. But more concrete, nothing is done to prevent the number of founders to decrease further,” says Green parliamentary party leader Kerstin Andreae in Rheinische Post.

But the German government is not completely inactive. Together with Deutsche Börse, the government has started the Deutsche Börse Venture Network just about a month ago (to the release), to connect young companies with international investors in order to finance their growth and establish a network. The concept is explained by the Deutsche Börse in a video on altii.

Globally, more and more is invested in start-ups and young companies. According to Preqin, VC investments have grown even further after the strong start of the year. During the first quarter of the year, 29 billion USD of venture capital were invested. In the second quarter, VC investments have reached a new high of 34 billion USD. According to the MoneyTree Report published by PricewaterhouseCooper and the National Venture Capital Association, which is based on Thomson Reuters data, venture capital investments have grown by 61 percent last in 2014. Especially software companies and firms in expansion stage are profiting from the growth.

In an international context, especially compared to the United States, Germany lacks venture capital investments. A Barkow Consulting study shows that the gap between the United States and Germany increases in size despite the strong growth of VC investments in Germany of about a third. Adjusted by GDP, the United States invest 7.5 times more in start-ups.