KfW Research: Number of newly founded businesses rose slightly in 2024

• Positive trend driven by start-ups founded on a part-time basis
• Majority of founders have a genuine desire to be their own bosses
• Most start-ups are newly established businesses, while acquisitions increased on a low level

Slightly more people ventured into self-employment in Germany in 2024 than the year before. The number of newly founded businesses grew by 17,000 or 3 per cent to 585,000. Start-up intensity increased to 115 newly founded businesses per 10,000 people aged 18 to 64 years – from 110 in the year 2023. More people chose self-employment as a result of the more difficult labour market situation.

“Despite the minor increase last year, we must acknowledge that start-up activity in Germany has been moving sideways since 2018,”

said economist Dr Georg Metzger, start-up expert at KfW Research.

The moderately positive growth of start-up activity was due to an increase in businesses founded on a part-time basis, which grew by 5 per cent or 19,000 to 382,000. The number of new full-time entrepreneurs was 203,000, down slightly by 1 per cent or 2,000 people from the previous year.

These are the findings of a preliminary evaluation of the current KfW Entrepreneurship Monitor, a representative survey of the population based on more than 50,000 annual interviews.

Nearly two thirds of founders (65%) started a business because they preferred self-employment to salaried employment. Most of them want to be self-employed on a permanent basis and value their independence most of all. At the same time, 31 per cent of business founders would really prefer to be employed than self-employed. They are more likely to plan their self-employment as a temporary episode in order to achieve a higher income, implement a business idea or advance their own career.

Eighty-three per cent of start-ups founded in 2024 were newly established businesses. Start-ups founded from the ground up are new enterprises in legal and organisational terms. Other businesses are founded by acquiring or participating in existing businesses.

“The share of businesses founded through acquisitions and participations has trended downward since the mid-2000’s. Although the share bucked this trend by rising 4 percentage points to 17 per cent of start-ups in 2024, that is still not nearly enough given the massive succession gap,”

said Dr Georg Metzger.

The brief analysis is available in German at Economics in Brief | KfW

Where does the German economy stand today? What does the country need to become future-proof? KfW Research explores these questions in the position paper “Managing the transition, strengthening growth”, with analyses of the current situation and recommendations for action in five policy areas. It is available for download at Papers and Proceedings on Economics | KfW