Berlin The German start-up scene is weakening: while more than 400,000 new companies were founded in 2011, in 2021 it was just under 240,000. The federal government wants to bring a new start-up strategy through the cabinet next week and, above all, work against the trend with a better financing landscape.
However, there are already doubts as to whether the approach of Federal Minister of Economics Robert Habeck (Greens) will be enough. The deputy federal chairman of the FDP, Johannes Vogel, calls for a “holistic approach” to start-up funding that is not limited to financing issues.
Many departments are required for this: from the Ministry of Health to the Ministry of Labor and the Ministry of the Interior to the Ministry of Education. “If we only tweak the known adjustment screws, we might miss the big lever for more start-up culture and entrepreneurship that we urgently need,” says Vogel.
The first important approach is education. “It would make a huge difference if all young people realized that starting a business is a natural option,” says Vogel. To do this, basic economic knowledge would have to be taught in schools in all federal states.
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Germany is currently wasting a lot of potential, especially among the younger generation. “The question is: How early can you try it out?” says Vogel. He therefore calls for the establishment of a limited liability company (UG) to be made possible with parental consent from the age of 16. Up to now, company foundations in Germany have only been permitted with legal capacity, i.e. the completion of the 18th year of life.
Vogel: The self-employed pay too much for health insurance
Want younger People over the age of 16 who start a business have had to have a family court confirm their “entrepreneurial suitability” at the request of their parents. Vogel believes that the hurdle is too high for young people with ideas.
He sees another obstacle to more entrepreneurial spirit in the generally “unfair” treatment of the self-employed as “second-class workers” in Germany, which is evident, for example, in the topic of voluntary insurance in the statutory health insurance system.
Vogel is calling on Federal Health Minister Karl Lauterbach (SPD) to ensure, as agreed in the coalition agreement, that the self-employed and employees with a similar income have to pay similarly high contributions for insurance benefits: “Above the mini-job limit, contributions for the self-employed to statutory health insurance must be strictly income-related become.” Anything else is simply unfair.
>> Also read here: What details are in Habeck’s start-up strategy?
In the statutory health insurance system, the self-employed should “not bear more, but simply the same costs as employees,” says Vogel.
With his strategy, the Federal Minister of Economics wants to achieve more business start-ups again.
(Photo: dpa)
He also sees a need for improvement in social security for company founders. Self-employed people have to prove that they are not employed as part of a so-called “status determination procedure”. Too often a “bureaucratic monster”, criticizes Vogel.
A better model would be to “create unbureaucratic legal certainty” with a reform of the procedure. Above all, the dialogue with the self-employed and their associations must be conducted. “We have to make everything more transparent, more comprehensible for those affected and, above all, suitable for the digital and agile working world,” he demands.
In addition, Minister of Labor Hubertus Heil (SPD) could specify the statutory mandate of the Federal Employment Agency in such a way that entrepreneurship is also taught as an equal biographical opportunity as part of the careers orientation it carries out in all schools nationwide.
>> Read here: The start-up scene is booming in northern Europe
For Vogel, the examples show how much the white-collar status is considered the norm in Germany. “It’s no wonder that people in such a system are rather reluctant to start a business and the number of start-ups has even been falling for years,” he says.
Start-ups lack the staff
According to figures from the Global Entrepreneurship Monitor, the start-up rate, i.e. the number of business start-ups in relation to the working-age population, was 6.9 percent in Germany in 2021. For comparison: Canada recorded a start-up rate of 20.1 percent, the USA achieved a value of 16.5 percent.
Another major hurdle for the start-up ecosystem in Germany is currently the shortage of skilled workers. Christoph Stresing, managing director of the start-up association, describes the lack of workers as a “brake on innovation and growth”. “You can see queues at airports and closed restaurants – the lack of staff at start-ups, on the other hand, is less of a focus,” criticizes Stresing. According to the startup association, 20 percent of the positions were vacant in a survey in April.
Filling the gap with foreign specialists is often very tedious. Stresing calls for special visas for IT specialists and for the processes in German embassies to be digitized and harmonized. Sometimes it takes up to eight months for visas to be issued, he reports.
The point can also be found in the new strategy of the Ministry of Economic Affairs: The federal government is “striving for a uniform, fast and digital visa process and will expand the recognition portal,” it says. Immigration law should also be further developed for this purpose.
FDP Vice Vogel also calls for an immigration system based on Canada’s model. There, points are awarded to potential immigrants for categories such as education, language skills, age and job opportunities. If you get enough points, you can get a permanent visa comparatively quickly. “We have to get better in the global competition for talent,” demands Vogel.
For this purpose, for example, English should be used as the second official language in offices that deal with immigrant specialists. This can compensate for the competitive disadvantage of not being an English-speaking country.
>> Read here: “It’s going to be ugly for the unicorn generation”: start-ups are threatened with running out of money
Start-ups are also desperately looking for IT and other specialists. A modern immigration law is therefore a basic requirement for modern entrepreneurship: “The Minister of the Interior has to submit this this year,” demands Vogel.
And at another point he sees a need to catch up, as planned by the Ministry of Economic Affairs, for a better one to create a financing environment. So far, a minimum investment quota in venture capital, as envisaged by the start-up strategy, has been considered tricky under European law. In addition, the strategy does not provide for this option for private old-age provision and thus for the large capital collection points.
Here, the draft version of the strategy still needs to be supplemented and the law adapted to modern needs. “As an economic nation, Germany has enormous influence on European law,” says Vogel. This influence must be used.
More: From great success to breaking the law? – There is resistance to Habeck’s start-up strategy