Start-ups in Germany grew to 605,000 in 2019 – 2020 will be defined by the coronavirus pandemic

• Start-up activity in Germany picked up again for the first time in five years
• Number of full-time start-ups has slipped to record low, but part-time start-ups are up
• The outlook for 2020 was positive, but the coronavirus has changed everything

In 2019 the number of business start-ups in Germany increased again for the first time in five years. According to a current preliminary evaluation by the KfW Entrepreneurship Monitor, there were 605,000 new entrepreneurs, 58,000 or 11% more than in 2018.

Unlike in the previous year, the economic growth impact in 2019 overcompensated both the pull effect of the very good labour market and the persistent negative trend, leading to an increase in the number of business founders. The number of part-time business start-ups, which are typically more sensitive to the business cycle, rose by 85,000 to 377,000, while the number of full-time start-ups slipped by 27,000 to a new low of 228,000.

The rise in start-up activity was already foreshadowed in 2018, when the number of start-up plans increased significantly. The current data for 2019 show a renewed rise in start-up plans, which would be a positive signal for start-up activity in 2020. But the impact of the coronavirus pandemic in Germany has wiped out this signal. It is likely that the number of necessity start-ups will increase this year, as was the case during the financial crisis. However, as entrepreneurs witness how the current crisis threatens the livelihoods of many, significantly more will presumably abandon their start-up plans. It remains to be seen which effect will ultimately prevail.

“Start-up activity in Germany picked up again in 2019 for the first time in five years. The year 2020 will show whether an increase in necessity start-ups or a decrease from the discontinuation of start-up plans will predominate, given the deep anxiety which the coronavirus crisis is causing for self-employed persons in particular”, said Dr Fritzi Köhler-Geib, Chief Economist of KfW. “State liquidity aid and support for short-time work will help businesses and self-employed persons for now. What is also encouraging is that many self-employed persons are reinventing themselves out of necessity and adapting their business models to the acute challenges. But what is crucial is that all contribute with their behaviour to keeping the current state of emergency as brief as possible. More will then get through this crisis.”

The full report with all findings on start-up activity in 2019 will be available in early summer.

The database:

The KfW Entrepreneurship Monitor is a representative telephone survey of the population on start-up activity in Germany which has been conducted annually since the year 2000. The analysis provides a comprehensive picture of start-up activity in Germany. It collects a wide range of information on business founders and projects as well as on the continuation of start-up projects in the particularly critical first three business years. For more information go to

www.kfw.de/KfW Entrepreneurship Monitor