Status: 4/4/2023 1:21 p.m
According to the state bank KfW, the number of business start-ups fell again significantly last year. A long-standing trend in Germany is thus continuing.
Start-up activity in Germany was hit again in 2022. This is shown by a preliminary evaluation of the representative start-up monitor of the state development bank KfW. With 550,000 business start-ups, around 57,000 fewer people than in 2021 took the step into self-employment. This corresponds to a decline of nine percent compared to the previous year. As early as 2020, the number of start-ups had fallen noticeably due to the corona.
According to KfW, start-up activity decreased in 2022, both full-time and part-time. The number of full-time start-ups has fallen to 222,000, a drop of 14,000 or six percent compared to 2021. The decline in part-time start-ups is even greater, which has fallen by 43,000 to 328,000 – a drop of twelve percent. This also has an effect on the so-called start-up rate. It went back to 108 start-ups per 10,000 people aged 18-64. In 2021 it was still 119.
“Hardly had she made up for the Corona kink for a short time when start-up activity in Germany is unfortunately already declining again in 2022,” comments Fritzi Köhler-Geib, Chief Economist at KfW.
More start-ups out of an emergency
The proportion of business start-ups to take advantage of a business opportunity, the so-called “opportunity start-up”, fell by 11 percentage points to 71 percent in 2022. Analogously to this decline, the proportion of business start-ups due to a lack of better employment alternatives rose from 15 to 24 percent year-on-year according to the start-up monitor. This group includes, for example, people who had no alternative on the job market and therefore became self-employed, so-called “emergency start-ups”.
With the vast majority of business start-ups in Germany, the step into self-employment was associated with a new company that had not previously existed in legal or organizational terms. In 2022, their share remained at the record level of the previous year at 86 percent. The remaining 14 percent was accounted for by company takeovers and investments. “In view of the large number of medium-sized companies that are looking for a successor solution, this is an economic challenge,” says KfW.
Declining trend for years
Overall, it is noticeable that the number of business start-ups has been falling for many years. In 2003, for example, there were still well over 1.4 million start-ups, since then the number has been falling almost consistently. “This is bad news for the German economy, because start-ups are key drivers of structural and technological change – and they support the future viability of the entire economy,” said Köhler-Geib.
Especially with a view to the “green” and digital transformation, Germany needs new companies with fresh and innovative ideas. “Strengthening the entrepreneurial spirit again remains a fundamental challenge for which all political, social and economic actors must pull together,” said the KfW chief economist.