Nurturing startups

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Startups: An increasingly rare site in Germany.
  • Why it matters

    Why it matters

    Without increased support for innovative new companies, entrepreneurial Germans will move overseas.

  • Facts

    Facts

    • Berlin has become a startup hub, with 40 percent of new German companies based there.
    • But the rest of Germany has become a startup desert.
    • Key reasons include a lack of venture capital, a dearth of business training and Germans’ preference for secure jobs.
  • Audio

    Audio

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If you look only at Berlin, you might think all is well on the German startup landscape. In the recent 2015 Global Startup Ecosystem Ranking, Germany’s capital took ninth place among the best locations for startups worldwide.

But Berlin is just an oasis in the startup desert landscape of Germany. Forty percent of new companies have their headquarters there, while in contrast even other cities popular with young people are far behind, including Hamburg with 7 percent and Munich with 8 percent. Once beyond city boundaries, the startup scene looks grim as fewer and fewer Germans want to start a company.

That has significant consequences. Germany is falling further behind in innovations, since new developments are no longer being made by large corporations, but rather by one- to five-person operations.

Google, Facebook, Amazon, all the companies that have radically changed people’s lives in recent years, had their origin not in a major corporation but in the minds of individuals with the courage to follow their vision. If Germany continues to allow its talent to go unused, it will continue to look at the U.S. with envy.

Why do so many more successful founders come from the U.S. and not Germany? The answer is complex. First, there is the matter of mentality, which is largely oriented toward security. Germans like secure jobs in an employee relationship.

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