KfW Entrepreneurship Monitor

Edition 2024

Start-up activity lacks macro-economic impetus – self-employed people are becoming more important as multipliers

According to the KfW Entrepreneurship Monitor, entrepreneurial activity in Germany grew moderately in 2023. The number of newly founded businesses rose to 568,000 (+3%). Of this total, however, businesses launched on a full-time basis decreased to 205,000 (-8%), while part-time business start-ups increased again by 11% to 363,000. Overall, the economy did little to encourage entrepreneurial activity in 2023. Economic and labour market forecasts suggest not much impetus can be expected in 2024 either.

KfW Entrepreneurship Monitor 2024

Press release

Comments from KfW's Chief Economist

“In 2023 there was hardly any impetus to entrepreneurial activity from the economy. Both the business cycle and the labour market stagnated, which was neither particularly favourable nor detrimental to entrepreneurial activity. On balance, the number of newly founded businesses increased slightly.

The macroeconomic environment is unlikely to provide much tailwind for the current year either. Combined with a sharp drop in start-up plans last year, unfortunately this will probably cause a renewed drop in entrepreneurial activity in 2024. Every year, roughly twice as many start-up plans are discontinued as start-ups are realised. If we succeed in reducing this discontinuation rate, that would do a lot for entrepreneurial activity. One key to this is financial literacy, which would remove many barriers to entrepreneurship.

In order to encourage women more broadly to become entrepreneurs, however, gender cliches in school and education must be cast aside and successful role models made more visible. That requires patience and stamina. But a quick win can be achieved by making successful female business founders more visible, since the positive effect of entrepreneurial role models is particularly strong among women."

Analysis of start-up activity in Germany

The KfW Entrepreneurship Monitor is an annual representative population survey conducted by telephone to gather information on start-up activity in Germany. The survey has been carried out by a well-known market research institute on behalf of KfW since the year 2000. The KfW Entrepreneurship Monitor paints a comprehensive picture of entrepreneurship in Germany. In particular the large number of characteristics of the entrepreneurs, as well as their start-up projects, is a defining feature of this database. In addition, business start-up survival in the first three business years can also be determined.

The wealth of information of the KfW Entrepreneurship Monitor allows a detailed analysis of start-up activity. A number of those results are published in the annual report.

Brief description of the KfW Entrepreneurship Monitor:

The annual cross section survey is conducted using computer-assisted telephone interviewing (CATI). Representativity is secured with regard to persons between 18 and 67 years of age resident in Germany with a sufficient command of the German language. Since the year 2008, about 50,000 persons have been interviewed per survey wave. Since 2010, a dual frame approach has been employed to include both households with landlines and households with mobile phones.
About 800 of the respondents in each survey wave entered into self-employment as a freelancer or started a commercial activity up to 12 months prior to the interview. Additionally, persons who have initiated their start-up project up to 36 months prior to the time of the interview are also recorded as new entrepreneurs. The recording of start-up activity is done regardless of whether the start-up project is still active at the time of the interview.
New entrepreneurs are defined as persons entering into full-time as well as sideline self-employment. Persons starting a new business or participating in or taking over an existing venture are also included. It does not matter whether it is a commercial or freelance activity. Both forms of self-employment are included in the data.
New entrepreneurs are asked about 50 questions, e.g. with regard to the form of the start-up project, employees, financing decisions and survival of the start-up. Personal characteristics such as age, gender, educational attainment, migration background and previous labour market status are collected for new entrepreneurs as well as for a comparison group of about 7,500 non-founders.

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KfW Entrepreneurship Monitor

Current KfW Entrepreneurship Monitor

Edition 2024

Start-up activity lacks macro-economic impetus – self-employed people are becoming more important as multipliers

Comments from KfW's Chief Economist

Past editions