Young people are reigniting entrepreneurial spirit in Germany

• Percentage of workers who want to be their own boss stabilised at 26% in 2019
• Entrepreneurial spirit among tertiary students is up sharply
• Coronavirus crisis has likely put a damper on the positive trend

The trend towards self-employment in Germany stabilised in 2019. Given a choice, 26% of the working-age population would take the step into self-employment. The multi-year downward trend has ended, as more and more young people want to start a business. A new analysis by KfW Research shows that tertiary students are the driving force behind this positive development. Given a choice, 46% of graduates opted to work for themselves in 2019 (2018: 33%).

“The growing entrepreneurial spirit among young people is a positive development. It is not least through the intense public debates about big issues such as climate action and social participation that many young people appear to have recognised the opportunities which starting a business gives them to proactively shape the future of the economy and society”, said Dr Fritzi Köhler-Geib, Chief Economist of KfW.

In the past 20 years the share of entrepreneurially minded people in Germany’s working-age population had dropped from 45% in the year 2000 to just 25% in 2018. Among the reasons is the ageing of the population, as entrepreneurial intentions diminish as people grow older. Furthermore, crises such as the financial crisis, the EU debt crisis and Brexit have heightened economic uncertainty, which also reduces the desire for self-employment. “Economic uncertainty has risen substantially as a result of the coronavirus crisis and the high stress it has placed on self-employed persons and businesses. It must therefore be feared this will put another damper on entrepreneurial spirit in 2020”, said Dr Fritzi Köhler-Geib. “We are hopeful that the effective support being given to those who have been hit by the crisis will prevent this damper from worsening and prevent more lasting damage to people’s entrepreneurial spirit.”

The current analysis by KfW Research can be retrieved from
www.kfw.de/fokus