- Germany's Entrepreneurial Landscape Deteriorates According to DIHK
The German Institute for Business and Commerce (DIHK) shares concerns over challenging business start-up conditions in Germany, predicting significant drawbacks. "I'm really worried about our location," expressed DIHK President Peter Adrian, reflecting on the DIHK report titled "Business Foundation 2024."
Last year, the DIHK noted a 6% decline in their consultancy offers for business establishment, reaching a record low, as per the report.
Despite some recovery, the DIHK remains pessimistic. "In the industrial sector, we're essentially saying goodbye due to rising production constraints and migration trends," Adrian noted. "If fewer people are interested in starting businesses these days, we're losing valuable growth and innovation opportunities."
Interestingly, there's been a 17% surge in one-on-one business establishment consultations, based on concrete business ideas. However, the report attributes this rise not to improved business environment, but to recuperation from the coronavirus period – delayed projects are now being addressed.
Founders voice dissatisfaction
In a survey conducted by DIHK in January and February 2024, 952 business owners, start-ups, and young companies graded the German business establishment environment with an average of 3.6 - the lowest score ever, according to the report. Using a school grading system, this translates to a drop from "just about satisfactory" to "meets basic requirements."
Entrepreneurs expressed their desire for simpler taxation and less bureaucracy. "Exorbitant business operating costs and the labyrinth of bureaucratic red tape are currently crushing entrepreneurial ambition," Adrian lamented. "Clearer signals for better location policies couldn't beclearer."
Therefore, DIHK once again advocates for easing bureaucratic barriers as the primary area of action and suggests nine strategies. Simplified forms, simpler business start-up for foreigners, and a unified starting point for new businesses to decrease founders' workload are among their proposals.
The Commission at DIHK, in response to the concerns raised by Peter Adrian, is currently examining ways to simplify taxation and reduce bureaucracy in business start-ups. The German Commission, as part of DIHK's nine strategies, is also advocating for simplified forms and a unified starting point to decrease the workload of new business founders.
