DIHK Report: High levels of dissatisfaction among founders in Germany

Berlin – People in Germany who are considering self-employment or want to start their own business are increasingly complaining about the business environment. This is one of the findings of the German Chamber of Industry and Commerce's (DIHK) "Business Start-ups 2025" report, which was reported on in Tuesday's editions of the Funke Media Group newspapers. According to the report, Germany has lost considerable appeal as a place to start a business. Nearly six out of ten founders are now dissatisfied with the conditions for starting a business and entrepreneurship. According to the DIHK, this represents an increase of seven percentage points compared to the previous year. At the same time, the proportion of very dissatisfied founders has almost doubled in the past two years. The current assessment of young entrepreneurs is even worse than during the coronavirus pandemic, the Chamber stated. As a result, interest in starting a business is stagnating at a historically low level. Despite a slight increase compared to the previous year, the number of consultations with entrepreneurs conducted by the Chambers of Industry and Commerce last year was still the second lowest since this survey began in 2003. According to the Association of German Chambers of Industry and Commerce (DIHK), the report incorporated approximately 200,000 contacts from the Chambers' start-up services, including initial consultations and advice sessions, as well as start-up events and entrepreneurship days. The Chambers primarily advise on taking the step into self-employment or setting up a sole proprietorship. Common start-up businesses include online shops, craft businesses, and IT or cleaning companies. However, founders who build start-ups with investor capital are less likely to seek assistance from such start-up consultations. The DIHK also stated that, for the study, founders were surveyed between January 22 and February 28 of this year regarding their recommendations and demands for policymakers. 618 responses from the survey were included in the analysis. DIHK President Peter Adrian expressed his concern regarding the report's findings to the newspapers of the Funke Media Group. "Founders are an engine of innovation in our economy. If we lose their dynamism, we lose our future," said Adrian. "It is precisely young entrepreneurs who recognize opportunities in difficult times and have the courage to venture into new territory. Their entrepreneurial spirit deserves not only respect but also better framework conditions," demanded the DIHK President. The problems that founders in Germany perceive are largely self-inflicted: Many founders report a "jungle of regulations and ordinances" that ties up time and resources. The sheer number of forms, responsibilities, and rules also leads to uncertainty and frustration, according to the report. Bureaucracy is particularly burdensome during the start-up phase. According to the DIHK, high taxes, sharply increased energy and labor costs, and inadequate digital infrastructure also stifle entrepreneurship. Chamber President Adrian called for modernization of the location: "The modernization agenda presented by the federal government could be an important building block in this regard, but only if it is consistently implemented," he said. Those who start a business in Germany still do so driven by an intrinsic motivation: In around two-thirds of the consultations offered by the Chambers of Industry and Commerce (IHK) for business start-ups, prospective entrepreneurs cite the desire to be a business owner as their primary motivation. However, other factors are also gaining importance. The lack of alternative employment options, cited by 34 percent of respondents, is the highest motivation for starting a business in ten years. One contributing factor is job losses in certain sectors. The IHKs are reporting an increase in inquiries from individuals who currently hold management positions in industries affected by the crisis and who want to reorient themselves professionally through self-employment in the event of foreseeable unemployment. For female founders, the desire for greater flexibility, for example, to better reconcile family and career, traditionally plays an above-average role. According to the Association of German Chambers of Industry and Commerce (DIHK), the fact that more and more women are interested in starting a business is a "ray of hope." These days, almost as many women as men seek advice on starting a business. Twenty years ago, the figure was just over a third. Regardless of gender, according to the report, founders in Germany have clear ideas about what needs improvement: Three-quarters of those surveyed are in favor of faster and simpler regulations. More than half call for a simpler tax code. High on the list for aspiring entrepreneurs are also better access to public funding, greater understanding of entrepreneurship in society, and lower energy prices. The German government recently presented a major package of modernization measures. Among other things, it aims to make it possible to start a business within 24 hours. The German Chamber of Industry and Commerce (DIHK) considers this insufficient and is also calling for faster processing of tax identification numbers and other permits. Verena Pausder, chairwoman of the German Startups Association, agrees. "The challenges faced by startups and traditional businesses – for example, in the skilled trades – differ in many respects, but one thing the report clearly shows is that significantly more effort is needed to strengthen Germany as a hub for startups and innovation," Pausder told the newspapers of the Funke Media Group. This includes significantly accelerating the business formation process. Better access to capital is also crucial for startups, as they rely primarily on equity capital for scaling.