Many people in Germany put their plans for self-employment into practice last year, after having put them on hold during the coronavirus crisis. According to data from the state development bank KfW, 607,000 people realized their ideas for starting a business in 2021. That was 70,000, or 13 percent, more than in the crisis year of 2020, meaning that start-up activity had left the coronavirus pandemic slump behind and had reached roughly the pre-crisis level of 2019, KfW chief economist Fritzi Köhler-Geib reported.
Founders took the plunge into self-employment more frequently last year in order to seize a business opportunity that presented itself. According to KfW, the proportion of so-called opportunity start-ups rose to 82 percent (2020: 80 percent).
The share of emergency start-ups fell to a low of 15 percent. Emergency start-ups are those founded by people who become self-employed for lack of better employment alternatives. The strong use of short-time work is likely to have contributed to the fact that there were not more people taking up self-employment out of necessity, KfW analyzed in the preliminary evaluation of its start-up monitor. The remaining 3 percent were mixed forms of opportunity and necessity start-ups.
According to the data, the majority of the founders became self-employed with new companies (85 percent). However, in KfW's view, this is not good news for small and medium-sized enterprises, which are plagued by succession worries.
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