German founders have good alternatives on the job market. This increases the quality of start-ups.
(Photo: imago images/Westend61)
The number of newly founded start-ups in Germany will once again be too small for many: According to an evaluation by the analysis company Startupdetector, there were 3348 in 2021. That is eleven percent more than in the previous year.
At first glance, however, the start-up landscape is developing more promisingly elsewhere. Measured by the number of inhabitants, Germany was only tenth in Europe when it came to start-ups. If the start-up quota in the rest of Europe remained constant, you could make up two places at most this year. But in the end, the raw numbers don’t matter.
Rather, it is crucial how successfully the company is founded. The new data give hope here: on the one hand, the number of financings increased even more than the number of start-ups. On the other hand, there is much to suggest that Germany’s youngest start-ups have more innovation potential than their predecessors.
There are three main signs of this: Firstly, nobody in Germany seems to have to set up a start-up for a lack of alternatives. Due to the shortage of skilled workers, most founders in this country could get a well-paid job.
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Instead, even highly paid engineers and managers are quitting to start up. The figures show that: The group of start-ups with managing directors between 40 and 49 years of age grew particularly strongly. These are people with a lot of market experience who will probably only give up their corporate careers for a really good plan.
Secondly, the data on start-up hotspots and sectors are also encouraging. E-commerce companies are no longer the only ones founded in Berlin, all of which somehow do the same thing. Enthusiasm for starting a business is particularly prevalent around Germany’s top universities. Work is being done on artificial intelligence, on e-mobility, on solutions for the energy transition. When you think of startups, stop thinking of bike messengers – think spaceships.
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Third, more and more people in Germany now know how to lead a start-up to success. Founders are serial offenders. They help each other and find employees who have worked in rapidly growing companies before.
At the same time, there is no reason for illusion: the 3,348 new start-ups will not all become a new SAP, Tesla or Google. Some of them may no longer exist today. But anyone who has learned from successful venture capital investors knows that this is not a bad thing.
In the end, the only thing that counts is whether some of the companies will prevail in the long term and keep the German economy internationally competitive. The new figures show that the rate of these success stories will increase.
More: The fight for 100 billion euros: How start-ups want to equip the Bundeswehr