This website is using cookies to ensure you get the best experience possible on our website.
More info: Privacy & Cookies, Imprint
Germany has developed into one of the leading locations for start-ups in Europe in recent years. The dynamism and diversity of the German start-up scene is impressive. But while start-ups are being founded in many cities across the country, three cities in particular stand out: Berlin, Munich and Hamburg. In this article, we take a look at these top cities for start-ups in Germany and their unique qualities.
1. Berlin - The capital of start-ups:
Berlin is undoubtedly the heart of the German start-up scene. The city is known for its vibrant entrepreneurial culture and cosmopolitan flair. Founders will find a wide range of support options here, from incubators and accelerators to funding opportunities and talent.
Advantages of Berlin:
Great variety of start-up events and networking opportunities.
Access to international markets and investors.
A thriving ecosystem of tech companies and creative industries.
2. Munich - Innovative power in the south:
Munich has developed into an important hub for technology and innovation. The city is known for its first-class universities and research institutions, making it an ideal location for technology-oriented start-ups.
Advantages of Munich:
Access to first-class talent and research facilities
Strong presence of large technology companies that offer partnership opportunities.
A high quality of life that attracts skilled workers.
3. Hamburg - Port city for creative start-ups:
Hamburg is an important center for creative and media companies. The city offers a unique combination of entrepreneurship and cultural diversity, which makes it particularly attractive for start-ups in the media, advertising and entertainment sectors.
Advantages of Hamburg:
Influential media landscape and advertising industry.
Access to investors and companies from various industries.
Cultural diversity and quality of life.
Other up-and-coming cities:
In addition to these top cities, there are also other up-and-coming start-up hotspots in Germany. These include cities such as Cologne, Frankfurt, Stuttgart and Düsseldorf, which are seeing a growing number of start-ups and a diverse business landscape.
Conclusion:
The German start-up scene is vibrant and diverse, and Berlin, Munich and Hamburg are the prominent cities that are the driving force behind this development. Each city has its own unique assets and strengths that make it attractive to different types of start-ups. Ultimately, the choice of location depends on the individual needs and goals of each company. Germany offers a wide range of opportunities for innovative founders looking for a suitable location for their start-up.
Introduction
The start-up scene in Germany has seen impressive development in recent years. Supported by funding programmes, a growing venture capital industry and an increasing acceptance of entrepreneurship as a career path, the country has seen an increasing number of start-ups. But what will it look like in 2023? What trends and developments are shaping the German start-up scene?
1. Continued upswing despite pandemic
Despite the fact that the COVID-19 pandemic has affected economies worldwide, the German start-up scene has held up surprisingly well. In 2022 there was already a strong upswing, and in 2023 this momentum seems to be maintained. Many founders have used the pandemic as an opportunity to develop innovative solutions to the changing needs of society.
2. Digitisation and technology as drivers
Digitisation and technology remain important drivers for start-ups in Germany. In particular, e-commerce, digital health services, fintech and artificial intelligence continue to be highly interesting fields for young entrepreneurs. The German government has stepped up its efforts to improve the digital infrastructure and promote innovation in these areas.
3. Sustainability and social responsibility in focus
A remarkable trend in the German start-up scene is the increased focus on sustainability and social responsibility. More and more start-ups are focusing on environmentally friendly technologies, social projects and ethical business management behaviour. Sustainability is no longer just a trend, but an integral part of many business models.
4. Increasing internationalisation
German start-ups are increasingly striving beyond national borders and internationalising their business models at an early stage. Globalisation offers access to a broader market and investment opportunities. German founders are willing to engage in global competition and offer their products and services worldwide.
5. Support from investors and funding programmes
The German start-up scene benefits from a growing number of investors and funding programmes. Both private and state funders support promising start-ups. This support helps to overcome financing hurdles and accelerate the growth of young companies
Conclusion
The German start-up scene continues to present itself as lively and dynamic in 2023. The pandemic has put the flexibility and innovative strength of the start-up community to the test, but at the same time it has also opened up new opportunities. The focus on digitalisation, sustainability and internationalisation shows that the German start-up scene is ready to face the challenges of the future and drive the country's economy forward. Support from investors and funding programmes plays a crucial role in this and is expected to continue growing. Germany remains a promising place for anyone pursuing the dream of starting a business.
An analysis of commercial register data shows that start-up activity in Germany has plummeted this year after the corona pandemic ended in 2022.
In recent years, Germany has experienced an unprecedented economic roller coaster ride, ranging from the corona pandemic to inflation. But while the pandemic has put many businesses to the test, and even forced some to close, inflation has managed to affect startup activity in the country in a very different way. A detailed analysis of commercial register data over the past five years sheds light on this remarkable trend.
A look at the data
The commercial register data show a significant decrease in the number of company start-ups in Germany since 2022. In particular in the years 2019, 2020 and 2021, the number of start-ups remained relatively stable, with fluctuations being recorded in the various calendar weeks. In 2019, the year started with 2,880 foundations in the 20th calendar week, but reached a low point of 2,354 foundations in the 25th calendar week before it rose again.
The post-pandemic tipping point
However, times changed after the end of the Corona pandemic in 2022. While the economic outlook was initially optimistic, analysis of the data for this year shows a striking void in start-up activity. Only 1,878 and 2,414 start-ups were recorded in calendar weeks 24 and 23, which represents a drastic decline compared to previous years, even if these figures do not include the start-up of associations. Post-pandemic uncertainty, coupled with economic uncertainties and rising inflation, seem to deter potential entrepreneurs.
Inflation as the new stumbling block
While the Corona pandemic has undoubtedly had a significant impact on business activity, it is worth noting that inflation has emerged as a new factor negatively affecting start-up activity in Germany. Inflation can increase the cost of starting a business as commodity, rent and labor prices rise. This could make budding entrepreneurs reluctant to start new businesses as economic uncertainty and rising costs pose a significant risk.
Outlook and challenges
Current data suggests that start-up activities in Germany are facing serious challenges. As the economic landscape continues to be characterized by uncertainty, it will be crucial for governments, business associations and companies alike to devise strategies to encourage entrepreneurship and support budding founders. The effects of inflation on start-up activity illustrate the need for a holistic approach to ensure economic stability and growth in Germany.
Overall, the analysis of the commercial register data makes it clear that start-up activity in Germany is influenced by a variety of factors, from the pandemic to inflation. The coming months and years will show whether and how Germany can overcome these challenges in order to stimulate start-up activities in the country again.
| Year | KW 20 | KW 21 | KW 22 | KW 23 | KW 24 | KW 25 | KW 26 | KW 27 | KW 28 | KW 29 | KW 30 | KW 31 | KW 32 | KW 33 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2880 | 2746 | 2148 | 2708 | 2157 | 2354 | 2793 | 2785 | 2801 | 2770 | 2714 | 2770 | 2596 | 2692 |
| 2020 | 2697 | 2069 | 2625 | 2121 | 2237 | 2807 | 2840 | 3048 | 3034 | 2735 | 2954 | 2861 | 2682 | 2809 |
| 2021 | 3458 | 2744 | 2857 | 3467 | 3286 | 3266 | 3334 | 3181 | 3278 | 3068 | 3219 | 3046 | 2939 | 2992 |
| 2022 | 2344 | 2299 | 2708 | 2414 | 1878 | 2345 | 2372 | 1993 | 2138 | 2111 | 2431 | - | - | - |
| 2023 | 1692 | 1821 | 1327 | 1861 | 1604 | 1791 | 2235 | 1749 | 1703 | 1888 | 1755 | 1128 | 2294 | 819 |
Data sources: Commercial Register 2019-2021, StartupDetector Newsletter 2022-2023 (excluding associations).
Note: Data missing for week 31-33/2022
The GEM country report Germany 2021 presents pleasing results regarding start-up activities in 2021 and their connection to the COVID-19 pandemic. The start-up rate, measured by the total early-stage entrepreneurial activity (TEA), has increased significantly compared to the previous year. This could be due to a positive response from business and the adaptability of those looking to start a business during the pandemic.
Start-up rate at the second highest level since 1999
The TEA rate, which represents the proportion of 18-64 year olds in Germany who have founded a company or are in the process of founding one, reached the second highest value in 2021 since the survey began in 1999 – 6.9%. This represents an increase of 2.1 percentage points compared to the previous year (4.8%). This increase suggests that, despite the ongoing uncertainties due to the pandemic, the willingness to start a business has increased in Germany.
Pandemic as driver for new business opportunities
Interestingly, more than a third of the TEA founders surveyed appear to indicate that the COVID-19 pandemic has opened up new business opportunities. This makes it clear that in the midst of the crisis, entrepreneurial opportunities can also arise that lead to new start-ups. In 2020, that proportion was even lower (a quarter of TEA startups were based on pandemic-related opportunities).
More focus on digital sales channels
Although around 76% of TEA founders in Germany have set up their sales channels digitally, the report shows that there is still room for further progress in the field of digitalization. In particular, cooperation between established companies and young, up-and-coming start-ups could lead to a win-win situation. Digital sales platforms and the customers of established companies could offer young companies faster market access.
Gender differences in start-up activity
An interesting aspect highlighted in the report concerns gender disparities in start-up activity. This shows that the gender gap, i.e. the difference between the start-up activities of men and women, was reduced during the COVID-19 pandemic. This applies above all to the prospective founders (nascent entrepreneurs), whose proportion is equalizing. The results indicate that women are more likely to intend to start a business, but are less likely to put them into practice than men.
Measures to promote start-ups by women
The report proposes various measures to further reduce the gender gap and to promote the start-up activities of women. This includes the expansion of childcare options, the promotion of women in business and STEM subjects and the presence of successful female founders as role models. Access to venture capital for female founders could also be improved, especially in the technology-oriented area.
Conclusion: increase in start-up activities despite the pandemic
The GEM country report Germany 2021 shows that the start-up rate in Germany increased in 2021 despite the ongoing COVID-19 pandemic. This could be due to an increased adaptability of the entrepreneurs, the identification of new entrepreneurial opportunities and the positive reaction of the economic policy. Gender differences in start-up activity have also narrowed during the pandemic, indicating increased support for start-ups by women. In order to further support this trend, targeted measures could be taken to strengthen the framework conditions for women in the start-up world.
For IT freelancers, finding a job in Germany is currently difficult. A combination of inflation, economic recession and ever-increasing demands from clients are presenting more and more IT freelancers with challenges. In this situation, even experienced IT professionals face unfamiliar obstacles and have to deal with the stability and future of freelance work in the IT field.
1. Inflation and uncertainty:
Inflation of 6.2% in Germany, caused by the ongoing war in Ukraine, has far-reaching economic effects. For IT freelancers in particular, this means the need to offer their services at prices that reflect the increased costs. The general uncertainty about future developments means that companies act more cautiously and projects are awarded more hesitantly.
2. Recession at home:
Germany is already in an economic recession for the third quarter in a row, which caused the gross domestic product to shrink by 0.3%. The reluctance of companies when it comes to new projects and investments has a direct impact on the demand for IT freelancers. With shrinking project budgets, outside experts are often the first to be crossed off the list, leading to a noticeable slump in orders.
3. Increasing demands from clients:
The demands of clients have skyrocketed in recent years - a development that poses particular challenges for IT freelancers. The expectation of the "perfect solution" is increasing, which raises the hurdle for many freelancers. Those who do not meet all the required criteria have a harder time acquiring orders.
4. Challenges for startups:
The once-bubbly startup scene faces its own difficulties. The bursting of the startup bubble and difficulties in raising or follow-up funding are impacting the availability of projects once offered by burgeoning startups.
5. The Impact of Rising Interest Rates:
Increasing interest rates have created a domino effect. Companies are more reluctant to make investment decisions, which is hampering demand for IT projects. At the same time, startups are also affected by this development, as financing options are narrowing.
In this demanding phase, flexibility is of the utmost importance for IT freelancers. The ability to adapt to changing market conditions, close cooperation with clients and the targeted search for niche markets could offer ways of asserting oneself in this challenging economic situation. Continuous training and the willingness to rethink existing business models are indispensable. The freelancer community is entering a period of change where adaptability and the spirit of innovation are more important than ever.