One-Third of German Entrepreneurs Under 30 - KfW Study
Younger entrepreneurs are increasingly prevalent in Germany's business scene.
In the midst of the economic crisis, Germany experienced a surge in self-employment, according to the state-owned KfW bank's study. With 585,000 new businesses in 2024, the number increased by a whopping 17,000 or 3%, the report says.
The Emergence of the Young Hustlers
The study reveals that the average age of entrepreneurs dropped to a record low of 34.4 years. At the dawn of the millennium, the average age was typically around 37 to 38 years. What's more, an astounding 39% of all entrepreneurs in 2024 were aged 18 to 29—a record high for this group.
Young folks are increasingly open to entrepreneurship, with 36% of the 18- to 29-year-olds expressing a preference for self-employment over employment. KfW's Start-up Monitor, based on 50,000 telephone interviews and 10,000 online interviews, indicates that more people are planning to start their own businesses. "Start-up numbers are expected to see a slight increase for 2025," says KfW's Chief Economist, Dirk Schumacher.
Start-ups: Essential for the Economy
Small businesses are key to the economy, the KfW emphasizes. They drive the medium-sized sector, foster relentless competition among established companies, and bring fresh ideas and jobs. A staggering 485,000 full-time jobs were created through new start-ups in 2024.
The Desire to Start a Business in Germany - A Slow Crawl
Although the numbers may be rising, it's worth noting that Germany's entrepreneurial spirit remains relatively low, says Schumacher. People are frequently deterred by bureaucratic obstacles and financial risks, as a staggering 30% of start-ups fold within three years. In the early 2000s, there were nearly 1.5 million start-ups, but the number has since been stagnant.
The recent boom in self-employment among young people can be attributed, in part, to a favorable economy in which people chose job security over entrepreneurship. However, Schumacher argues that this is rooted in mentality. He also points out the impact of demographic change, as Germany's aging population traditionally has low entrepreneurial intentions. Schumacher adds that educational initiatives promoting entrepreneurial skills can help boost those intentions.
- Policy Support
- Inclusive entrepreneurship policies and support for young entrepreneurs could be factors if they have been implemented or enhanced in recent years, though this is not directly mentioned in the study.
- Demographic Changes
- An aging population and demographic shifts may encourage younger generations to seek alternative employment paths, such as self-employment, to fill emerging gaps in the labor market.
- Economic Conditions
- Economic downturns or shifts can push individuals towards self-employment as traditional employment opportunities decrease.
- Educational Trends
- The shift in educational focus could influence career choices, potentially steering more young people toward entrepreneurship as a viable career path.
In light of the economic boom, policy support for inclusive entrepreneurship, particularly for young individuals, could have played a role in the surge of small businesses and self-employment among Germans under 30. Demographic changes, such as an aging population and generational shifts, might have also motivated the younger generation to explore alternative employment paths, like self-employment, to fill labor market gaps. Concurrently, economic downturns or shifts may have driven some individuals to self-employment as traditional employment opportunities became scarce. Furthermore, the emergence of entrepreneurship-focused educational initiatives could help nurture the entrepreneurial spirit among young Germans, potentially influencing their career choices.
