2019 was a record year in Germany for Total Early-stage Entrepreneurial Activity (TEA). A total of 7.6% of the 18-64 population were either nascent entrepreneurs or owner-manager of a new business. The global pandemic reversed this trend. In 2020, this number decreased to 4.8% according to the 2020/2021 German National Report published by Leibniz Universität Hannover and RKW. This rate is back in line with the long-term average over the years.
“A significant part of this decrease happened due to the pandemic as many nascent entrepreneurs in Germany have either postponed their plan to start a business or have completely given up the idea to start one,” says Rolf Sternberg, team leader GEM Germany.
Germany now ranks 28 of 30 high-income countries that are covered in the latest GEM rankings.
Other report findings are:
- The majority of persons with entrepreneurial intentions postponed the planned start of the company due to the pandemic. At the same time, the crisis is creating new opportunities. One fourth of all TEA-founders took advantage of opportunities that have arisen as a result of the pandemic.
- The continuation of a family tradition remains the most important reason to become an entrepreneur in Germany (62%). Despite the crisis, the motive “to earn a living” has increased only slightly (45%).
- There are less regional opportunities for entrepreneurs. In 2020, only 36% of the surveyed people stated that there are good opportunities for starting a business in the area they live (compared to 52% in 2019).
National entrepreneurship experts, who were surveyed in the national expert survey (NES), see the protection of intellectual property, public support programs and customers’ appreciation of new products/services as strengths of Germany as an entrepreneurship location. Weaknesses exist in entrepreneurship education, regulation and the labor market situation.
The report was authored by Rolf Sternberg, Natalia Gorynia-Pfeffer, Matthias Wallisch, Armin Baharian, Lennard Stolz, Simone Chlosta and Julia Schauer. You can access the Executive Summary in English. The 2020/2021 Report and all other Country Reports of Germany can be downloaded at the following link.
For questions, contact gem@wigeo.uni-hannover.de.