The German Bundestag discussed the progress of Germany’s Start-up Strategy last Wednesday. Out of the 130 planned measures, 40% have been rolled out, raising questions about its overall effectiveness. The strategy, set in motion in July 2022, strives to elevate Germany as a global start-up hub and enhance its international stature. Key initiatives encompass financial augmentation, seamless start-up procedures, championing diversity and gender balance, and solidifying regulatory sandboxes.
Anna Christmann from the Green Party, the Start-up Officer at the German Economics and Technology Ministry, expressed confidence in Germany’s start-up ecosystem despite global challenges. Most notably, 80% of start-ups voiced their preference to begin their ventures in Germany again, indicating a robust start-up climate in the country. Additionally, two-thirds are looking forward to securing external funds in the coming year, showcasing an optimistic trajectory.
Criticism abounds
However, not all share this optimism. Hansjörg George from the CDU/CSU highlighted concerns, pointing to the Start-up Monitor. The survey, which covered around 2,000 start-ups, revealed a diminishing satisfaction rate concerning the German start-up ecosystem. Studies further indicate a bleak picture, with German start-ups amassing over €3 billion in venture capital in the first half of this year, a drastic 50% decrease from the previous year. The German Start-up Monitor 2023 corroborated these findings, signalling an all-time low in the business climate, excluding the 2020 pandemic anomaly.
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Cementing its commitment to nurture start-ups, the German government, in its coalition agreement, aspired to establish Germany as the “leading start-up location in Europe”. Efforts include fostering key digital technologies and improving conditions for start-ups in the tech sector. The government also plans to facilitate market entry and grant better financial access to women and immigrants. This focus on start-ups is projected to spur the creation of approximately 560,000 jobs from 2020 to 2030.
Additionally, the plan to unveil regulatory sandboxes aims to simulate real-world conditions for start-ups. Gerald Ullrich, an FDP parliament member, emphasized the necessity of the Regulatory Sandbox Act and the one-stop-shop strategy to simplify bureaucratic processes for founders.
Christmann also spotlighted two significant initiatives – the €1 billion Deep Tech and Climate Fund for deep tech and climate tech companies, and the “Exist Women” programme designed to attract more female founders. She stressed the importance of increasing the visibility and accessibility of female founders in the start-up sphere.
More action in Brussels
Given the challenges faced, there’s a call for Germany to engage more proactively in Brussels, ensuring essential capital market framework conditions are set at the EU level. Christian Democrat MP Klaus Wiener underscored the importance of this involvement, especially to unlock private capital. Supporting this sentiment, Ullrich of the Free Democrats accentuated the importance of a unified Europe for start-ups to flourish, emphasizing the hurdles still present in accessing the European single market.
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