The Global Entrepreneurship Monitor (GEM) is the world's largest and oldest comparative study on start-up activities and is celebrating its 25th anniversary this year. Prof. Dr. Rolf Sternberg from the Institute of Economic and Cultural Geography (IWKG) initiated the GEM at the end of the 1990s together with researchers from five other countries and has led the German country team ever since. He is also the founding representative of the Faculty of Natural Sciences and a member of the Presidential Board's Starting Business Steering Committee. On the occasion of the presentation of the new GEM Country Report Germany 2023/24 at the premises of the Federal Ministry of Economics and Climate Protection (BMWK) in Berlin on June 28, 2024, Sternberg handed over the team leadership to Prof. Dr. Christian Hundt, Professor of Economic Geography at the IWKG of Leibniz University Hannover and Director of the Thünen Institute for Innovation and Value Creation in Rural Areas, and Dr. Florian Täube (RKW Competence Centre, Eschborn). This means that Leibniz University Hannover, and in this case the Faculty of Natural Sciences, will continue to be involved in the management of the German GEM team.
Challenges for start-ups in Germany
The current GEM country report 2023/24 highlights Germany's strengths and weaknesses in terms of start-up activities and attitudes in comparison with almost 50 other countries. At 7.7%, the German TEA start-up rate (rate of start-ups among all 18-64 year olds) is the second highest in Germany since the start of the GEM data series, although it only ranks 37th among the 46 countries participating in the reference year 2023. The 25 to 34-year-olds are particularly active with a TEA rate of 13.3%. The start-up rate of 18 to 24-year-olds has more than tripled since 2017. Less pleasing is the persistently large gender gap (also compared to other OECD countries): The start-up rate for men was 9.3% in 2023, significantly higher than that of women (5.9%).
The GEM study shows that start-up activity in Germany has increased in the long term. The proportion of 18 to 64-year-olds who are in the process of starting up or have started their own business in the last 3.5 years is higher than it was 25 years ago. However, start-up momentum has decreased since 2019 and Germany is falling behind other European countries.
Other important aspects of the new GEM country report include start-ups by people with a migration background, the innovativeness of young companies, the effects of the pandemic on the propensity to start a business, individual start-up motives and the start-up and economic policy implications of the empirical findings, including with regard to the ecological and economic transformation. It is particularly noteworthy that the financing options for young companies in Germany have improved, although there are still gaps in the provision of venture capital. The motives behind start-ups have also changed: The desire to make the world a better place is now dominant, while the motive to achieve financial wealth is more pronounced, especially among men.
Education is the key to start-ups in Germany
Professor Sternberg emphasizes that education is the central lever for increasing start-up dynamics in Germany. The German education system still predominantly conveys the model of dependent employment and not self-employment as an equally valid alternative. Improvements are needed, particularly in school education, in order to promote entrepreneurial spirit and start-up skills. The GEM study also points to weaknesses in the physical infrastructure. Germany has fallen from fifth place (2003) to 39th place (2023) in an international comparison. Furthermore, social norms and values inhibit entrepreneurial self-confidence, as entrepreneurial failure is often stigmatized.
