One in five entrepreneurs in Germany have ‘foreign roots’

A new study shows that immigrants in Germany are experiencing an "entrepreneurial boom", with 44 percent of new businesses last year founded by people with non-German heritage.

One in five entrepreneurs in Germany have 'foreign roots'
American immigrant Jess Erickson, who founded the company Geekettes in Berlin. Photo: DPA.

The number of independent businesses-owners with an immigration background jumped by 30 percent in the decade between 2005 and 2015 – up by 171,000 to 737,000, according to a study by the Economic Affairs Ministry.

The report, seen by publishing group RedaktionsNetzwerk Deutschland (RND) on Thursday, showed that over the same time period, the number of entrepreneurs of German descent fell by 90,000 people, or a drop of 3 percent.
“Through this transformation, about one in five to one in six engaged entrepreneurs have foreign ancestry,” according to the study, which is set to be presented at a conference by the Economic Affairs Ministry on Thursday.
The report also notes that contrary to stereotypes, business owners with immigrant backgrounds don’t only go into restaurant or retail business. Immigrants are particularly active in the construction, science and technology sectors.
“This development is a testament to the significant modernization and range of services offered by immigrant establishments.”
The authors also see great potential in the future, given that immigrants often start from less than Germans.
Immigrants are also playing an ever more important role in starting new businesses. In 2003, there were 56,000 businesses started by people with foreign ancestry, compared to 369,000 started by those with German heritage. But last year, there were 100,000 businesses started by people with immigrant backgrounds, compared to 127,000 founded by people with German roots.
That means the portion of new businesses founded by immigrants rose from 13 percent in 2003 to 44 percent in 2015.
Therefore the study authors described an absolute “entrepreneurial boom” among those with immigrant backgrounds, further noting that the majority of such businesses were not started out of necessity: just 8 percent of immigrant entrepreneurs were previously registered as unemployed.
A separate study in August by the Bertelsmann Stiftung described immigrants as the “job-engine of Germany”, calculating that employers with immigrant backgrounds had created 1.3 million jobs in 2014.
Economy Minister Sigmar Gabriel told RND that he was very pleased with the results of the latest study by his ministry.
“In Germany we need more entrepreneurs,” Gabriel said.
“They bring new innovations, create jobs and are important for the competitiveness of our economy.
“I am happy that entrepreneurs with immigrant roots are staying on the ball and are taking on an ever more important role in our business landscape.”

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