Business startups rose by around 3% in Germany last year after a decline in 2022, state investment bank KfW reported on Monday, but said things are not looking good this year.
According to KfW, 568,000 people made the decision to go into business for themselves last year.
But the number of those actively planning to start a business decreased to 3.6% this year, from 4.5% last year.
“Entrepreneurship is stagnant,” said Fritzi Köhler-Geib, economist at KfW.
She cited financial difficulties faced by aspiring entrepreneurs. “We definitely have to improve financial knowledge,” said Köhler-Geib. The bank annually interviews a representative sample of 50,000 German residents.
She predicted that the downward trend would continue into 2024. According to KfW data, around twice as many plans to start a business are abandoned than are actually carried out.
Entrepreneurship in Germany is relatively weak, with only 24% of people aged between 18 and 67 preferring self-employment to a job in a company, regardless of their current situation, according to data from KfW.
The number was twice as high at the start of the millennium, with global economic factors, such as the job market boom since 2006, playing an important role.
Another factor is the aging of society, where people under 30 are more likely to establish themselves on their own.
Financial risks are a factor for 73% of people when considering self-employment, followed by bureaucratic obstacles for 69%. Other factors are fears regarding income, social security and obtaining financing.
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