Germans find jobs, set up fewer new firms

Germans find jobs, set up fewer new firms
Photo: DPA

Germans are increasingly taking on jobs rather than deciding to become their own bosses, with the number of new start-up businesses this year expected to be the lowest since reunification.


"The interest in starting one's own business in Germany is nearing an all-time low," said Hans Heinrich, head of the German Association of Chambers of Commerce and Industry (DIHK).

This is mostly due to the strong job market, he told the Handelsblatt newspaper on Thursday.

With more jobs available, said Heinrich, "fewer people want to be their own boss."

The number of new businesses has been falling steadily, from a high of 500,000 in 2005 down to 400,000 in 2011, according to figures from the Bonn-based IfM institute, which studies small and medium-sized businesses.

And the DIHK report says this collapse will continue, predicting considerably fewer than 400,000 new start-ups in 2012, bringing it down to the lowest level seen since 1990.

Most business advisers working with the DIHK - 70 percent – said they expected the number of new businesses to continue to fall, with just 5 percent predicting growth.

Difficulties finding start-up capital and bureaucracy were further barriers. "We need to revive the private equity market," Heinrich said.

High tech start-ups are losing foreign investors who are put off by fears of double taxation under what he described as unclear German tax laws. And complicated bureaucracy forces business founders run from "pillar to post", he said.

"To make real start-ups more attractive we need to cut red tape for new businesses," said Heinrich.

Women would seem to be less excited by what is on offer on the job market – the female share of those contacting the DIHK for advice on starting their own companies rose from 33 percent in 2002 to 41 percent last year.

The Local/jlb



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