A Shift Towards Entrepreneurship in Germany: The Youth-led Revolution
Growing number of young entrepreneurs in Germany making a mark
Amidst the economic turmoil in 2024, Germany has witnessed a substantial rise in self-employment, with the number of new businesses skyrocketing by 17,000 or 3%, according to KfW's recent study [1][2]. This surge can be attributed to the unstable job market, encouraging more individuals to venture into entrepreneurship.
Embracing Entrepreneurship at Younger Ages
In this new wave of self-employment, the average age of entrepreneurs has plummeted to an all-time low of 34.4 years. Back at the turn of the millennium, the average age hovered around 37-38 years. trends suggest a supportive environment for entrepreneurship [1].
An astounding 39% of these entrepreneurs in 2024 fell between the ages of 18 and 29 — a record high for this age group [1]. The growing inclination of young people towards entrepreneurship is a positive sign [1]. In fact, 36% of 18- to 29-year-olds expressed a preference for self-employment over employment [1]. This trend also indicates a rising number of aspiring entrepreneurs eager to launch their businesses [1].
The Economic Impact of Startups
The significance of startups for the economy can't be ignored. They play a crucial role in supporting the middle class, generating strong competition among established companies, and fostering innovation and job creation [1]. In 2024, new startups generated approximately 485,000 full-time jobs [1]. However, it's important to note that the willingness to start a business in Germany remains relatively low [1].
Many potential entrepreneurs are deterred by bureaucratic hurdles and financial risks, with 30% of startups failing within three years [1]. Despite this, the number of startups grew from nearly 1.5 million at the start of the millennium, only to decline and stagnate since then [1].
The stagnation can be attributed to the favorable economic conditions of recent years, leading people to seek the stability of employment over entrepreneurship [1]. As for the future, KfW's chief economist, Dirk Schumacher, expects a slight increase in startup numbers for 2025 [1].
Education and Government Initiatives
The increasing inclination of young people towards entrepreneurship is attributed to economic uncertainty, technological advancements, and government support [3]. The new government aims to promote entrepreneurial skills in schools, which could increase the likelihood of starting a business [1][3].
In Schleswig-Holstein, initiatives focus on integrating young people into the labor market through vocational training programs that incorporate entrepreneurial skills [3]. Furthermore, governments often provide financial support, mentorship programs, and resources for start-ups [3]. Policy reforms, such as simplifying business registration processes and offering tax incentives, make it easier for young entrepreneurs to navigate the business landscape [3].
This shift towards entrepreneurship among young Germans is clearly underway, and it will be interesting to see how this trend evolves in the coming years.
References1. KfW Startup Monitor 2025 – Self-employment remains a braking force on employment growth2. dpa – More young people becoming self-employed in Germany3. Government initiatives for promoting entrepreneurial skills among young people in Germany4. Vocational Education and Training in Schleswig-Holstein5. Erasmus for Young Entrepreneurs
The increase in new businesses in Germany, especially among the youth, indicates a growing interest in small-business finance and entrepreneurship. With nearly 40% of these entrepreneurs falling between the ages of 18 and 29, there's a noticeable shift towards entrepreneurship among younger generations.
This rise in self-employment not only fosters innovation and job creation but also strengthens competition in the business sector. Moreover, governments are taking measures to support this trend, such as promoting entrepreneurial skills in schools and streamlining business registration processes.
