For a long time, business sentiment among SMEs knew only one direction – up. This has now suffered a setback and has fallen for the first time since January. Concerns about newly rising incidence rates are the main reason. Business sentiment among small and medium-sized enterprises is declining solely due to expectations, while the situation assessment is showing a moderate improvement.
As the pandemic situation has clearly eased, SME sentiment in June surged again at a similar pace as in May, almost matching the level of large enterprises. The improvement in business situation assessments was the second strongest since the beginning of the time series in January 2005, while SMEs’ expectations were more optimistic than they have been for more than ten years now. Now it is crucial to take responsibility for the regained freedom and to continue rolling out vaccines quickly, especially given the accelerating spread of the highly infectious Delta variant of the virus.
Coronavirus crisis is slowing down innovation among SMEs
The coronavirus pandemic has left its mark on SMEs’ innovation activity. After a brief surge at the beginning of the pandemic, small and medium-sized enterprises further reduced their innovation activities. The key findings are:
- Three in ten SMEs reduced their innovation in 2020
- Financing difficulties and skills shortages are the main barriers
- The share of innovators in the SME sector rose in 2019 as a result of new OECD definitions
Coronavirus crisis is putting pressure on businesses – lending environment is becoming more difficult.
KfW Group has conducted its 20th business survey on bank behaviour and financing in collaboration with 18 business associations.
The most important findings:
- The financing situation of enterprises has worsened. The proportion of enterprises reporting difficulties in accessing credit was 26.5%.
- Around 60% of the surveyed enterprises conducted loan negotiations in 2020. Long-term loans were particularly sought-after.
- The crisis has weighed on enterprises’ financial situation. That has put downward pressure on ratings, with 34.5% of enterprises reporting a lower credit rating.
- Around two thirds of the surveyed enterprises invested in their business in 2020, although less than the year before. However, investment plans for 2021 point to a recovery.
The third wave of coronavirus infections has been contained, the vaccination rate is rising and there are prospects for continuing relaxations of lockdown rules in more and more regions. This good news quickly lifted the spirits of small and medium-sized enterprises in May, sending confidence levels back into positive territory for the first time since the start of the pandemic. The rise is bolstered primarily by a much more optimistic outlook on the coming six months. But although it is all systems go for the economy, it is also good advice to be gentle with the accelerator. Lifting regulations too quickly could still put Germany at risk of gambling away the most recent successes in containing the pandemic.
The third coronavirus wave has required tighter lockdowns in many places and there is still a long way to go before broad sections of the population have been immunised. At the same time, the global economy is clearly recovering. In an environment filled with contradictory signals, SMEs are putting up a good fight. Their business sentiment rose for the third consecutive month. Both sentiment components contributed to the increase. In order for the hoped-for upswing to now become a reality, new infections must be consistently contained and vaccinations ramped up further.
The coronavirus crisis has left a deep mark on the German SME sector. SMEs that generate part of their turnover abroad were hit particularly hard. They were more likely than other SMEs to suffer a decline in demand, shrinking sales territories and disrupted supply chains. Estimates put the decline in SMEs’ international turnovers at a significant 17% in 2020, down to around EUR 494 billion after some EUR 596 billion in the pre-pandemic year 2019. The experience of the crisis is likely to have a lasting impact on SMEs’ global integration. Many businesses want to focus more strongly on domestic customers and suppliers in the years ahead. On the other hand, large SMEs in particular want to diversify their international business more. Only very few intend to withdraw from global value chains – the international division of labour continues to provide advantages despite the coronavirus crisis.
Focus on Economics
The coronavirus crisis really pulled the handbrake on in-company continuing education in 2020 because many companies do not have the money, time and planning certainty they need. A current supplementary survey under the KfW SME Panel revealed that nearly 40% of small and medium-sized enterprises reduced their continuing education activities last year, half of them down to zero. But the need for continuing education remains during the crisis. Indeed, it grew strongly in the area of digital skills in 2020. Lack of digital skills in the workforce is one of the most formidable barriers to the digital structural transformation, making the crisis-induced decline in continuing education all the more problematic for enterprises’ future transformational capacity and competitiveness.
In March, sentiment among small and medium-sized enterprises brightened for the second consecutive month – this time very strongly. With the arrival of spring, business confidence rose three times the typical monthly variation. Expectations in particular spiked, turning slightly positive for the first time since the outbreak of the pandemic. Large enterprises are currently even more upbeat. But the strong improvements in sentiment across the overall economy are only a snapshot amid the surging third wave of infections. Yet they underscore the great potential for a rebound once the pandemic has been successfully suppressed. They can be seen as a vote of confidence in the upturn.
The current KfW SME Digitalisation Report examines the development of digitalisation activity before and during the coronavirus pandemic.
The key finding is that digitalisation activity exhibited a mixed trend during the crisis:
• One third of SMEs expanded their digitalisation activities, while another third still did not carry out any digitalisation projects at all
• Most have put crisis management measures in place that could be implemented swiftly, while strategically oriented projects were more often postponed
• Large SMEs in particular have been ramping up their activities; the SME sector could break up into two groups
A current study commissioned by KfW Research identifies which technologies are the most promising for Germany in the medium term. The most important results are:
• Germany has a differentiated technological profile
• Good starting positions particularly for automotive and manufacturing, as well as environmental and climate technologies
• It is imperative to expand competences with regard to information technologies.
After January was spent digesting the hard lockdown, February brought a hint of spring. SME business confidence rose again noticeably by 4.2 points to -10.1 balance points. Expectations in particular improved and assessments of the current business situation also improved slightly. But the gap remains wide between the services and retail businesses, which were hit hard by the restrictions, and construction and industrial firms. Sentiment among small and medium-sized manufacturers continued to rise strongly. In retail businesses, on the other hand, it was only the hope for better times that brought a slight improvement in business confidence in February, while their situation assessments were almost as negative as during the first lockdown.
Focus on Economics
Artificial intelligence (AI) is seen as a future technology with strong growth potential and the qualities to be a game changer in many sectors. It is, however, not widely used in the SME sector. The focus on SMEs carrying out R&D highlights the challenges it currently still presents.
Economics in Brief
Most Germans are not really into continuing their education. This applies to low-skilled workers and those in the low-wage sector in particular. The trend is growing but 60% of the working population did not engage in further vocational education in 2018. Among workers with a low skill level it was 75%. This is of concern because the coronavirus crisis is threatening many jobs and the digital, demographic and ecological structural transformation is requiring workers to be much more adaptable. Further education can also address growing skills shortages. For a culture of lifelong learning it is therefore important to eliminate the deficits in education and professional development.
SME business sentiment: retail in freefall, manufacturing steady
SME business sentiment in Germany fell sharply in January as a result of the extended and tightened lockdown. Situation assessments and business expectations both fell. Factors that likely contributed to pessimism were uncertainty about the end of the lockdown and disappointment in the slow pace of the vaccine rollout. But the overall sentiment level is still nowhere near the record low of last spring.
Focus on Economics
The coronavirus pandemic caused a superficial push for innovation and digitalisation. However, as the crisis continued, the innovation efforts of SMEs deteriorated. As the crisis continues, this is also a threat to digitalisation. Long-term, strategic projects in particular are likely to be pushed aside or delayed as a result of the difficult financial circumstances.
In the first half of December, Germany’s SMEs were still relatively unimpressed by rising new infections and the prospects of a tougher lockdown. Their business confidence rose 1.4 points to -10.6 balance points. SMEs’ situation assessments improved noticeably, while their expectations were only slightly higher. The positive outlook for an easing of the situation in the medium term through the rollout of effective vaccines is likely to be neutralised by a dimmer view of the coming months. However, the specific closure of child daycare centres, schools and many stationary retail shops, which went into effect on 16 December until at least 10 January, was not yet specifically known when most of the responses were returned.
Focus on Economics
In the coronavirus year of 2020, Germany’s SMEs were suddenly confronted with existential challenges and putting their plans for the future on the backburner – including transferring management to the next generation. Against that backdrop, KfW Research delivers a positive snapshot of SMEs’ succession activity. First, many entrepreneurs whose withdrawal is imminent are at least adhering to their succession plans even in the crisis. Second, they entered the crisis well-prepared and are staying the course with succession processes they had already initiated. Negotiations for almost half of the approx. 260,000 transfers planned for the next two years have been completed. But the longer the crisis drags on, the higher the risk that successions may fail. The crisis has further exacerbated a fundamental problem: the shortage of successors due to unfavourable demographics and weak entrepreneurial spirit. Removing barriers to entrepreneurial activity is key to a successful generational transition in the SME sector.
The second wave of infections and the partial lockdown leave their mark on small and medium-sized enterprises. SME business confidence fell by 4.5 points in November – a significant decline but only moderate compared to the crashes of 18 and 25 points in March and April. Situation assessments presented themselves as relatively steady, while business expectations plunged. Service enterprises are currently the most pessimistic in both size classes. After all, this segment includes all industries that have been directly affected by the lockdown since the beginning of November. Small and medium-sized enterprises in particular are likely to represent a large share of the critical sectors. Medium-sized retailers, however, also reported a rapid deterioration in business confidence. In the large enterprise segment, the manufacturing sector managed to lift overall sentiment.
Focus on Economics
The COVID-19 pandemic has deeply affected and unsettled Germany’s enterprises. To be sure, most enterprises rest on a solid financial foundation. The current situation, however, is making it difficult for businesses to make the necessary investments to tap into growth areas in the transition to a digital and climate-neutral economy. But such investments are very important for them to grow out of debt and secure prosperity in the future. The coronavirus crisis has already thwarted the investment plans of many small and medium-sized enterprises. Companies expect to invest almost EUR 40 billion less than last year. That is why economic policy must also seize the moment to create the framework, provide incentives for investment and lead the way with start-up finance to make future growth possible in these two key areas.
The outlook for small and medium-sized enterprises is darkening amid the second wave of infections. In October the containment measures, still mild and mostly local, hardly disrupted business activity but tighter restrictions were foreseeable as new infections were rising fast. The partial lockdown in November will interrupt the economic recovery. However, the response means there is a good chance that the damage can be confined to the particularly contact-intensive sectors. But there is still a long winter ahead and the downside risks are therefore high.
Focus on Economics
Many small and medium-sized enterprises use digital platforms. This shows that many enterprises have recognised the advantages of platforms for their business and that the barriers for their use are not excessively high. Early adopters are large SMEs and knowledge-based service providers, as well as R&D-intensive manufacturers. Also apparent is the fact that young businesses and companies with a high proportion of young employees are often active on digital platforms.
The coronavirus crisis has left a deep imprint on the SME sector. The KfW SME Panel 2020 shows that they continue to be severely impacted and their expectations for 2020 as a whole are at a historic low. The turnovers of small and medium-sized enterprises (SMEs) are set to drop more steeply than in the financial crisis of 2009. As a result, many enterprises fear further considerable pressure on employment. Equity ratios are also under stress. But SMEs broadly rest on a solid foundation, partly because of their renewed good performance in 2019. Employment, turnovers and investment rose again last year. SMEs were able to increase their profitability and build up their financial buffers once again, so they entered the crisis from a very good position. But the pathway out is likely to be long and hard and the impact will be felt for a long time.
The ERP digitization and innovation loan has currently been evaluated externally. As the evaluation confirms, the program addresses the key obstacles and helps to transform the innovation potential of small and medium-sized companies into growth. The funding has measurable positive effects on innovation and investment expenditure as well as on employment and sales growth, as could be determined using a modern statistical method. The funding is also characterized by high efficiency. A summary of the evaluation results can be found here:
Number of start-ups in Germany was steady at 70,000 in 2019 – impact of the coronavirus crisis is uncertain
The number of innovation- or growth-driven young enterprises in Germany has stabilised. After rising in 2017 and 2018, the number of start-ups stayed at 70,000 in 2019. It is uncertain how the coronavirus crisis will impact the development of start-ups in 2020. More businesses will close their doors and there will be fewer start-ups, probably leading to more internet-based and digital business models. One fifth of start-up founders plan to employ venture capital to finance their future growth. That is twice as many as in the previous year. The appetite for VC is growing.
A second wave of new coronavirus infections is on its way in Europe, taking on alarming proportions in some neighbouring countries and jeopardising the economic recovery. Against this backdrop, the fifth rise in the business climate indicator for German SMEs is sending out reassuring signals. Nevertheless, the resurging pandemic is becoming a growing obstacle for the economy as the cold season begins. It can still be overcome but the difficult part of the recovery has begun.
VC market Germany: Ready for the next development stage
The market for venture capital has been growing in Germany for some years now. Since 2014, annual VC investment has grown from EUR 0.7 billion to EUR 1.9 billion. But the German VC market is falling further behind other countries, as their VC markets have evolved much better in relation to the strength of their economies. In order to catch up with the United Kingdom, the European champion, German start-ups would have to receive roughly twice as much venture capital each year and over one third more to reach the level of France.
Large financing rounds pose a particular challenge for the German VC market. Foreign investors are involved in nine out of ten financing rounds. For the German VC ecosystem, that increases the risk of start-ups that need finance leaving the country.
The economic crisis from the coronavirus shock is unprecedented in the speed of its spread, its depth and global scale. Because of high uncertainty, a lasting recovery is particularly difficult and will depend mainly on meeting three key challenges: First, the business sector can be expected to incur higher debt, which will adversely impact investment activity. High loan losses and low earnings are putting increased pressure on banks’ equity positions, reducing credit supply. Second, the coronavirus pandemic has accelerated the implementation of short-term digitalisation and innovation projects. More long-term, in-depth projects, however, are at risk of being put off for lack of funds. Third, climate change demands structural adjustments in all areas of the economy which must be addressed quickly and decisively regardless of financial constraints.
Proportion of businesses planning digital projects stagnates on a high level
KfW Group has surveyed enterprises about their digitalisation activities in collaboration with 19 business associations for the fourth time. The most important results:
- The current survey does not confirm the trend of the past years towards more businesses with digitalisation plans. But the coronavirus pandemic is set to give digitalisation a fresh boost.
- Large enterprises as well as wholesale and foreign trade businesses are pioneers of digitalisation.
- Seizing opportunities remains the most important motive for digitalisation. However, pressure from the business environment to step up digitalisation is clearly increasing.
The initially very strong sentiment improvement driven by the relaxation of coronavirus restrictions since May is weakening. In August, however, SME business confidence continued to brighten but much less than in the preceding months, remaining well below the pre-crisis level of February. For the first time in a good two and a half years, large enterprises are slightly more upbeat than SMEs. The easy part of the recovery since the historic slump in eeconomic activity in April is over and bringing it closer to what it was before the crisis this coming autumn and winter will be rather challenging by comparison.
Economics in Brief
More and more businesses now use social media – even to recruit workers. At present, some 40% of small and medium-sized enterprises in Germany hire workers using social media, and the European average is as high as 46%. This was revealed by the European SME Survey, for which KfW Research interviewed more than 2,500 businesses in Germany, France, Poland, Spain and the United Kingdom jointly with other European promotional banks.
Businesses that are heavily affected by the skills shortage in particular turn to social media. Another reason these channels are becoming increasingly important in recruiting skills is that more age cohorts who have grown up with digital media are entering the workforce. The coronavirus crisis has provided further impetus to the use of social media and is likely to boost their use in the SME sector in the medium term as well.
SME business sentiment rose for the third consecutive month in July. This shows that small and medium-sized enterprises were quite successful in relaunching their businesses after the containment of the first wave of infections. They started the summer quarter on a robust path of recovery. What is particularly encouraging is that situation assessments also improved. However, headwinds are building. Continuing high global infection rates are hurting export-oriented manufacturing in particular. The recent rise in new infections in Germany also poses a risk to almost all sectors.
Businesses are well-equipped for the crisis
In cooperation with 19 trade associations, KfW Group has conducted a business survey on banking behaviour and financing for the 19th time.
The most important results are:
- The financing situation remained good until the outbreak of the coronavirus crisis.
- The proportion of enterprises reporting difficulties in accessing credit was 13.4%.
- As before, however, small businesses are still much more likely to face difficulties in accessing credit.
- The positive development of businesses’ equity ratio and credit rating continued up until the beginning of 2020.
- Bank loans remain an important source of funding for businesses. Internal funding, however, continues to play by far the most important role in business financing.
Focus on Economics
Many SMEs are reacting to the coronavirus crisis with innovations. 27% have already introduced process, product or business model innovations. If we include the companies who are still planning to do this, the share rises to 43%. This includes businesses who have suffered heavy losses in turnover in particular. The innovations tend to represent measures that can be adopted on an ad hoc basis rather than result from more long-term development processes.
The low number of new infections in Germany and the resulting easing of restrictions combined with strong economic-policy stimulus measures have led to a rapid surge in SME business sentiment at the beginning of summer. There is good reason for confidence to return, given the extensive stabilisation measures and success in containing the virus. However, risks remain very high as the further course of the pandemic is virtually impossible to predict.
Bolstered by cyclical and labour market growth, entrepreneurial activity in Germany picked up again in 2019 for the first time in years. The number of newly founded businesses rose to 605,000 (+58,000). This was primarily due to a significant rise in part-time business start-ups, while full-time start-ups dropped to a new low. At the same time, the number of opportunity start-ups grew by a disproportionately high 439,000. The number of internet-based and digital start-ups also rose. The outlook for entrepreneurial activity in 2020 was positive but the coronavirus pandemic is changing much of this. Many entrepreneurial plans, which had increased again, will now likely be put off. However, the crisis can be expected to result in more necessity start-ups.
Focus on Economics
The dark clouds of the coronavirus crisis are gradually clearing. Nevertheless, most of the small and medium-sized enterprises will feel the impact of the coronavirus crisis for a long time. That was one of the findings of the second representative supplementary survey based on the KfW SME Panel in early June 2020. Most enterprises do not expect to return to full economic activity before the spring of 2021. Around 2.3 million SMEs were affected by losses in turnover in May as well. Companies lost an average of 46% of their normally anticipated turnover. Overall, SMEs lost around EUR 88 billion in May. This is also putting pressure on their liquidity. It is true that the situation appears to have eased for some enterprises, with 25% currently reporting adequate liquidity reserves. But around one in five will run out of liquidity in four weeks at the latest unless the situation improves.
Economics in Brief
The coronavirus pandemic has not only caused a drop in demand in the SME sector but also led to employee absences due to illness, quarantine and a lack of childcare. A supplementary survey to the KfW SME Panel shows that this is resulting in business disruptions for one in four SMEs.
In order to stay in business and protect their employees, many SMEs have increasingly transitioned to flexible and digital working arrangements. More than one third of them have expanded their remote working arrangements and nearly half are increasingly holding video or telephone conferences. Around 15% of SMEs want to continue remote working arrangements even after the crisis has ended.
The coronavirus pandemic has caused unprecedented sentiment volatility in the SME sector. In May, business confidence recovered very sharply from its historic nosedive the month before. But what is remarkable are the relations. The rise in confidence from the previous month was the second strongest since the beginning of the timeseries but it made up for only a good one fifth of the decreases in March and April. The stronger sentiment is being carried solely by a record rise in business expectations, which nevertheless remain very pessimistic.
Focus on Economics
Many small and medium-sized enterprises are responding creatively to the coronavirus crisis, with 43% adapting their product/service offerings, sales method or business model. When combined with businesses that still plan to do this, that percentage even rises to 57%. Companies that were hit particularly hard by the crisis and those that have previously innovated are leading the charge.
SME business sentiment continues in freefall, dropping even more sharply in April than in March. The mood is thus even more depressed than eleven years ago, at the height of the financial crisis. Both subindicators stand out with new negative records. Situation assessments have deteriorated more than ever before and business expectations have plunged to a new historic low. We are confident nonetheless that we saw sentiment bottom out in April – thanks to the comprehensive coronavirus containment strategy, the successes achieved in stopping the spread of infections and the now announced or already implemented easing of restrictions.
Digitalisation projects are gaining traction in the SME sector but digitalisation expenditure has remained low for years
The most important findings are:
- 40% of SMEs completed at least one digitalisation project.
- Digitalisation expenditure was EUR 19 billion per year.
- SMEs spent an average EUR 17,000 on digitalising their business.
- The coronavirus pandemic will trigger a surge in digitalisation.
Focus on Economics
As anticipated, the coronavirus crisis has hit the SME sector with force. A current special survey based on the KfW SME Panel shows the magnitude of the impact. In March, more than 2.2 million SMEs suffered losses in turnover as a result of the crisis. On average, they lost slightly more than half the normally anticipated March turnover alone, or around EUR 75 billion. Still, SMEs are very resilient against crises of this nature because they have continuously improved their equity base and built up financial buffers. This is helping them to temporarily absorb losses in the current crisis and reduce pressure on liquidity. If the lockdown drags on, however, SMEs’ losses will increase and half of them will run out of liquidity reserves by the end of May.
The coronavirus crisis has hit the export-oriented German economy in what was already a difficult situation. Growing tensions in international trade relations and a worsening global economy also affected SMEs, whose international turnover grew by a mere 3.1% in 2018 to EUR 595 billion, down from 5.5% in 2017. The KfW ifo Export Expectations of the German SME sector were persistently negative in 2019, before crashing through the floor in March 2020. The approx. 800,000 internationally active SMEs have been hit particularly hard by the consequences of the coronavirus crisis in Europe, where their most important sales and procurement markets are located. Even though the trade conflict between the EU and the US is being overshadowed by the coronavirus crisis, one in three SMEs are worried about a possible escalation.
The SME business climate is experiencing an historically unique collapse in light of the corona crisis. This drop of 20 points considerably overshadows the sharpest previous decline during the financial crisis. Unlike in previous recessions, the slump is not primarily being caused by the more cyclical industrial sector. Rather, many parts of the domestic economy have been deliberately shut down. As a result, the business climate of small and medium-sized service providers, as well as that of retailers and wholesalers, is plummeting. But it still fails to capture the full extent of the crisis. During the survey period, while it became apparent that the pandemic would escalate and the resulting restrictions would be intensified, most of them were not yet in force in Germany. The full impact is not likely to be mapped until April.
Focus on Economics
Do digitalisation projects have specific characteristics that conflict with external financing? To answer this question, this study compares the financing structure of digitalisation projects with that of investments using a statistical procedure from evaluation research.
The central finding is that the financing structure of both types of projects differs significantly – even when comparing companies that are similar in size, age, credit rating and the respective project scope. This indicates that special characteristics of digitalisation projects are an obstacle to financing with bank loans.
In February, small and medium-sized enterprises in Germany did not appear to be concerned about the coronavirus outbreak, which was still concentrated in China at the time. According to the current KfW-ifo SME Barometer, SME business sentiment rose again moderately after falling in the previous month. The driver behind the improved sentiment was a rise in expectations. On the other hand, a coronavirus effect already began to appear among large enterprises, whose business confidence suffered a setback for the first time since October 2020.
The innovator rate in SMEs is falling to the lowest level ever measured by the KfW SME Panel. Since 2006 the share of innovators among SMEs of all sizes and sectors has declined. The loss of innovators affects both enterprises that produce market innovations as well as the broad mass of imitating innovators. Innovation expenditure is developing without a clear trend in the medium term. Innovation efforts are thus concentrated in fewer and fewer enterprises.
In order to ensure Germany's competitiveness, an innovation policy is needed that pursues two strands: On the one hand, the research and development (R&D) of new technologies must be encouraged. On the other hand, it is necessary to support the innovation activities of companies without R&D, which cannot be achieved through R&D funding measures.
Focus on Economics
Improving the work-life balance plays a key role in securing the supply of skilled workers – also in the German SME sector. Two thirds of SMEs have already adopted specific policies for creating more family-friendly working conditions. Knowledge-intensive manufacturing firms and service providers are leading the field and many are optimistic that digitalisation will further contribute to balancing work and family life.
Flexible arrangements for working hours and working from home are among the most common measures being adopted by SMEs to improve the balance between work and family life. Rather less common to date are policies designed to support child daycare or granting leave to care for close relatives. SMEs that have adopted specific policies are more likely to be growth-driven and regard a more family-friendly workplace culture as an advantage in competing for skilled labour.
The year 2020 began with a setback for small and medium-sized enterprises. Their business climate dropped to the lowest level since August of last year. The decline in sentiment is exclusively due to the renewed drop in expectations. Large enterprises, however, showed clear signs of life. The positive trend among large enterprises reflects easing tensions in the foreign trade environment, while the hitherto reliable domestic economy lost a bit of steam. The coronavirus outbreak currently poses a new burden. All in all, economic momentum remains subdued for the time being.
Focus on Economics
One third of SMEs cannot meet their digital skill requirements. The problem applies not just to basic digital skills, such as the use of standard software and digital devices, but also to advanced skills such as programming and statistical data analysis. Most SMEs attempt to build digital skills through further training. But short training measures with often limited skill-building effects predominate. More intensive training is hampered primarily by financial barriers. One third of SMEs describe the direct costs as a problem, while one quarter are challenged by employees’ absence from work. Digital learning formats enable more flexible learning, so they have the potential to stimulate further training in small and medium-sized enterprises.
The number of innovation- or growth-driven young enterprises in Germany has increased again. In 2018 there were 70,000 start-ups, after 60,000 in the previous year.
On average, nine in 100 businesses founded by men have start-up characteristics, as opposed to only three in 100 for women. Businesses founded by women and men differ primarily in how strongly they are innovation- and growth-driven. Examples of suitable measures for closing the gender gap include stepping up efforts to attract women to technical and scientific careers and teaching business skills to school students.