Record low: Hardly anyone still wants to become self-employed in Germany
Sep 10, 2019

Record low: Hardly anyone still wants to become self-employed in Germany

Germany is slowly running out of founders. Fewer and fewer people opt for self-employment because of the good situation in the labor market. But there are exceptions.

Sebastian Däuwel from Speyer has a good laugh. His bakery start-up is growing steadily. In front of his sales outlet in an inconspicuous commercial area, customers regularly queue up. “I couldn’t be more satisfied,” he says. It’s been three years since the 36-year-old took the plunge into self-employment. A few elementary baking trials quickly turned into a business idea. Today, Däuwel and his bread purists mainly bake bread – always with the aim of keeping the product as simple and pure as possible.

His passion for baking and his desire to set up his own business were the main reasons why he decided to set up his own business. “I knew that if I didn’t dare, I would regret it later,” says Däuwel today. At first, he was afraid of failure. But the great response from friends and strangers ultimately made it easy for him to decide to give up his secure job at an energy supplier for his own company.

Only 25 percent of the working population can imagine self-employment.

Unlike bread baker Däuwel, however, fewer and fewer people in Germany are prepared to take the risk of becoming self-employed. According to a survey conducted by Förderbank KfW in 2018, only 25 percent of the working population could imagine being their own boss. There has been no lower figure since the survey began in 2000. At that time, the theoretical willingness to start a business was still 45 percent.

The still-good situation on the labor market and the aging society have been slowing down the entrepreneurial spirit of the citizens for some time, KfW analyses. Däuwel believes that there are many advantages to being self-employed: “When it comes to setting up your own company, you are freer and can achieve much more quickly. The decision-making process is much shorter.” In addition, he said, professional self-fulfillment was not possible in any other way.

The Federal Ministry of Economics is concerned about the dwindling willingness to become self-employed: “Start-ups are the drivers of innovation and, in particular, of digital change. Germany, therefore, needs founders,” says a spokesperson. If the founders were missing today, competitiveness would suffer tomorrow.

Däuwel does not want to hide the fact that self-employment also has its downsides. ” You’ re constantly caught up in the processes. It’s hard to switch off during holidays or illness.” In addition, the workload is sometimes enormous, says the baker. “If I were to extrapolate my working time, I’d certainly get about 60 hours.” A time that doesn’t always feel like work, because he works exclusively for himself, he says.

Although he acknowledges the necessity of bureaucratic duties, Däuwel criticizes the outdated work steps in the authorities – which he had been allowed to deal with sufficiently. He had seen himself exposed to a great deal of paperwork. The 36-year-old believes that these steps can be carried out digitally.

Criticism of bureaucracy and legislation

The Association of Founders and Self-employed in Germany (VGSD) sharply criticises the bureaucratic requirements and legal framework conditions for the self-employed. Regarding the small start-up readiness of the Germans, VGSD boss Andreas Lutz says, it is also the consequence of a whole series of founder-hostile laws. As examples it calls a quadruplication of the contributions to the voluntary unemployment insurance and the prevailing right uncertainty around the topic of pseudo self-employment. “Added to this are laws that are poorly drafted in terms of craftsmanship, such as the implementation of the DSGVO, which create a lot of uncertainty and bureaucratic effort,” he adds with a view to the new data protection ordinance.

The number of start-ups reached a record low of 547,000 last year, according to the start-up monitor of the KfW Förderbank. In any case, the figure fell less recently: last year it fell by only two percent. In previous years there had still been double-digit declines.

The Association of Founders and the Self-Employed (VGSD) expects even lower start-up figures for the current year. “The political and legal framework conditions have not changed. A trend reversal is unlikely from our view, therefore, says VSGD boss Lutz. KfW also expects a further decline. “The forecasts for overall economic development send a negative signal,” says Georg Metzger of KfW Research.

You can find the original article in the German language here:


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