In 2024, Germany experienced a slight increase in the number of newly founded businesses compared to the previous year. The total number of new enterprises rose by 17,000, marking a 3% increase to reach 585,000. This translates to a start-up intensity of 115 new businesses per 10,000 people aged between 18 and 64 years, up from 110 in 2023. This trend was largely influenced by a challenging labor market situation that encouraged more individuals to pursue self-employment.
“Despite the minor increase last year, we must acknowledge that start-up activity in Germany has been moving sideways since 2018,” stated Dr. Georg Metzger, an economist and start-up expert at KfW Research.
The growth in start-ups was primarily driven by part-time entrepreneurs, whose numbers increased by 5%, or 19,000, reaching a total of 382,000. In contrast, the number of full-time entrepreneurs decreased slightly by 1%, amounting to 203,000 individuals.
These insights are derived from a preliminary evaluation of the KfW Entrepreneurship Monitor, which is based on over 50,000 annual interviews conducted with the population.
Approximately two-thirds (65%) of business founders expressed a preference for self-employment over salaried jobs. Many seek permanent self-employment and value their independence. However, about 31% would prefer employment over self-employment and view their entrepreneurial endeavors as temporary steps towards higher income or career advancement.
In terms of business types established in 2024, newly created enterprises accounted for 83% of start-ups. These are businesses that are legally and organizationally new entities. The remaining share involved acquiring or participating in existing businesses.
“The share of businesses founded through acquisitions and participations has trended downward since the mid-2000’s. Although the share bucked this trend by rising four percentage points to 17 per cent of start-ups in 2024, that is still not nearly enough given the massive succession gap,” commented Dr. Georg Metzger.
KfW Research provides further analysis on these trends and other economic challenges facing Germany in its position paper “Managing the transition, strengthening growth,” which is available for download.