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STARTUPS

Germany sees spike in new startups in first half of 2023

The number of startups founded in Germany rose significantly in the first six months of the year - with two new cities emerging as entrepreneurial hubs.

Published: 11 July 2023 13:17 CEST
A start-up founder attends an online meeting.
A start-up founder attends an online meeting. Photo: picture alliance/dpa/dpa-tmn | Catherine Waibel

Around 1,300 new startups have been set-up in Germany in the first half of 2023, according to a new report, with Berlin, Hamburg and Munich holding their positions as the three top locations for entrepreneurs.

The data released by the German Startup Association (DSV) shows a 16 percent uptick in the number of new companies being founded nationally this year.

In particular, new startup registrations jumped by 40 percent in Berlin, with 262 new startups entering the market, and by a similar percentage in Hamburg, where 90 startups were launched over the six-month period. 

Munich, meanwhile, saw 95 new startups founded from January to June, representing an increase of two percent.

However, the Bavarian capital continues to punch above its weight in the business community compared to its relatively small size. In the twelve months between July 2022 and June 2023, there were 12.6 new startups founded per 100,000 – more than Berlin’s 12.3 per 100,000 people.

Somewhat more surprisingly, the university towns of Karlsruhe, Darmstadt and Heidelberg all appeared in the top 5 destinations for startups per capita. 

READ ALSO: EXPLAINED: The German regions attracting startups

According to the DSV, this is largely because of the symbiosis between research facilities and entrepreneurship, which shows the potential to create startup hubs outside of cities like Berlin and Munich.

“In order to make better use of our strength in research, we need to make the topic of entrepreneurship more prominent in universities and lower legal and bureaucratic hurdles for setting up companies,” said DSV CEO Christian Miele. If this succeeds, “we will see many more startups at German universities”.

Post-pandemic recovery 

The sharp increase in the number of companies launched at the start of the year could be a sign that Germany’s startup scene is recovering after the tough pandemic years.

“After the slump in startups in 2022, this is an important signal for the economic and innovative strength of our country,” said Miele.

In particular, businesses in the tourism sector are once again taking off after years of travel restrictions and uncertainty. In a climate of renewed optimism, startups in this sector soared by 111 percent. 

READ ALSO: ‘Lack of diversity is a problem’: What it’s like to work at a Berlin tech startup

Other clear winners in 2023 include the mobility sector (+ 30 percent), grocery companies (+ 28 percent) and startups in the software industry (+ 23 percent).

On the other side of the coin, the number of new blockchain and crypto companies slipped by 63 percent, with environmental tech startups and agriculture businesses dropping by 18 and 13 percent respectively.

Responding to the data, Miele welcomed the spike in startups but warned that the trend was not “self-sustaining”. 

He called on the government to quickly implement the policies in its Startup Strategy, which include easier access to both public financing and venture capital and measures for supporting startup founders with migration backgrounds. 

“If we make Germany the world market leader for startups, it can give our limping economy a real boost,” Miele added.

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WORKING IN GERMANY

Germany ranked fifth most popular destination for foreign workers

Germany is among the most popular destinations in the world for foreign workers to migrate to, according to a new study. But Germans themselves are reluctant to move abroad.

Published: 24 April 2024 11:32 CEST
Germany ranked fifth most popular destination for foreign workers

Encouraging skilled workers from abroad to migrate to Germany is a key issue right now, with the government aiming to transform the European powerhouse into a “modern migration country”. 

But according to the results of a widescale survey published on Wednesday, the Bundesrepublik already ranks highly as a desirable location for international workers to migrate to.

Management consultancy Boston Consulting Group, the job portal Stepstone and its umbrella organisation The Network surveyed 150,000 employees in 188 different countries to try and gauge the willingness to work abroad and the most attractive destinations to do so.

They found that Germany was the fifth most popular country for foreign workers to move to, coming in behind Australia, the United States, the United Kingdom and Canada. Among non-English speaking countries, meanwhile, Germany ranked the highest.

In terms of cities that foreigners wanted to move to, Berlin landed in sixth place. London was the most popular city for foreign workers, followed by Amsterdam, Dubai, Abu Dhabi and New York.

According to the researchers, however, attractive jobs and a healthy job market were much more important to foreign workers than the desire to move to a particular country or city.

This was especially relevant for Germany: for almost three quarters of respondents (74 percent), job quality was the reason they choose Germany, while the healthcare system, for example, was only relevant for around a third (34 percent).

“In the competition for workers from abroad, the companies that offer talented people attractive working conditions as well as organisational support – for example when applying for work permits – will win,” said Jens Baier, a senior consultant at BSG who worked on the study.

“Unfortunately, this is often still very laborious in Germany.” 

READ ALSO: Why German companies want faster permits and more housing for foreign workers

Support with the immigration process was also expected by the majority of workers, with 77 percent saying they thought employers should offer significant help with relocation and applying for work permits.

Germans ‘relatively sedentary’

On a global level, researchers found that the willingness to move to a foreign country was high, coming in at around 60 percent of respondents.

Between October and December last year, almost a quarter of respondents were actively seeking work abroad.

For residents of Germany, however, relocating for work didn’t appear to be a high priority: just seven percent of the 14,000 people surveyed were looking for a job in a foreign country, with Austria and Switzerland ranking as the top destinations.

This was less than half the percentage of people from the UK, Italy and USA who said they dreamt of working abroad.

People from African countries, meanwhile, were most likely to want to relocate, while more than half (54 percent) of Indians also expressed a desire to live and work in a foreign land.

The results are likely to give a boost to Germany’s current government, which has recently passed sweeping citizenship and migration reforms with the aim of attracting an influx of skilled workers. 

READ ALSO: Germany’s plans to improve digital access to the labour market

However, there are signs that Germany may be losing some of its lustre as a destination for foreigners: back in 2018, the country managed to land in second place in the international rankings.

For Stepstone Group labour market expert Dr. Tobias Zimmermann, who co-authored the study, both the private and the public sector should be involved in making immigration easier for workers.

“Without immigration, we will not be able to maintain our prosperity,” Zimmermann said. “It is a huge opportunity that so many people are keen to move to Germany for a good job. Politics and business should work even more closely together to promote more flexible and faster labour market integration.”

Vocabulary

Migration of workers – (die) Arbeitsmigration

Attractiveness – (die) Anziehungskraft

Willingness – (die) Bereitschaft

Proportion – (der) Anteil

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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