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5 December 2012
In North Rhine-Westphalia, the subsidy for master craftsmen has been available for 17 years. Approximately 15.000 new businesses or acquisitions have been supported, and over 70.000 jobs have been created or secured.
The number of people of working age in southern Brandenburg will decline sharply in the coming years. Demographic change will hit the Lusatian labor market with full force. "This makes it all the more necessary to counteract the looming shortage of skilled workers today," says Peter Thirty, President of the Chamber of Crafts Cottbus.
One measure would be the introduction of a bonus for master craftsmen and women starting their own business or for highly qualified individuals in Brandenburg. "This would motivate qualified specialists to become self-employed in the craft trades," says the master baker. "For example, they could take over an existing company and thus secure important jobs for the state, thus securing income and purchasing power."
This topic has gained enormous importance since the start-up grant was revised. The Federal Employment Agency increasingly withdrew from start-up funding in 2012, and the number of new businesses is declining sharply. The master craftsman start-up bonus would help in this regard; there are examples of this, as the capital city of Berlin demonstrates.
That's where it all began. In 1986, the state decided to support master craftsmen who wanted to start a business, take over a company, or invest in an existing one. The Master Craftsmen Start-up Bonus was born. The goal: to encourage master craftsmen to become self-employed in their trade as quickly as possible and create jobs. And so, the capital has been supporting young entrepreneurs for 26 years (with a brief interruption in 1988/89).
In the mid-1990s, the number of skilled craftsmen in North Rhine-Westphalia was 15,5 percent below the national average – the NRW skilled crafts association called this a self-employment gap. Facilitating the start-up of small and medium-sized businesses was, from the perspective of the North Rhine-Westphalian Crafts Day the best way to close the gap.
Berlin had already shown the way with the Master Craftsmen's Start-up Bonus. The experience there was positive. It accelerated the transition to self-employment, encouraged investments, increased the creditworthiness of start-ups with banks, and created jobs. Now, a similar funding program was needed in North Rhine-Westphalia.
Representatives of the North Rhine-Westphalian state parliament and trade association promptly traveled to the capital to investigate the potential transfer of the master craftsman start-up bonus to North Rhine-Westphalia. After discussions at the Berlin Chamber of Skilled Crafts, there was unanimous agreement: the cost-benefit analysis favored transferring it to North Rhine-Westphalia.
Just ten days later, members of the state parliament debated the master craftsman start-up bonus. Ultimately, all parliamentary groups represented in the North Rhine-Westphalian state parliament voted unanimously to introduce the subsidy on March 31, 1995. Since then, in approximately 17 years, approximately 15.000 new businesses or acquisitions have been supported, and well over 70.000 jobs have been created or secured. Further effects: Founders hire additional staff more quickly and begin training apprentices sooner. Furthermore, the market exit rate for subsidized skilled trades businesses is particularly low.
In politics, the Master Craftsman Start-up Premium has often been described as the most successful and cost-effective business start-up program of all time. "The Master Craftsman Start-up Premium is a completely undisputed program and is praised by all sides," confirms Dieter Schlimmer of the State Trade Promotion Agency of the North Rhine-Westphalian Crafts (LGH). As the granting authority, the LGH is the institution that administers the premium.
Operations management
Operations management
The Chambers of Skilled Crafts in Germany - HWK of Saarland
When parliament approved the funding program, the SPD governed with an absolute majority. Shortly thereafter, it had to bring the Greens on board. Ten years later, they were replaced jointly by the CDU and FDP. Five years later, the SPD and Greens were back in power – initially as a minority government and, after the premature dissolution of the state parliament, with a majority in parliament. The master craftsman start-up bonus was never questioned during this time.
"I hope that we can develop a joint initiative as quickly as possible so that such a [master craftsman start-up] bonus becomes possible in North Rhine-Westphalia, in addition to the existing funding measures. It can be considered proven that it is effective. It has been demonstrated that it creates jobs." This is how Bodo Hombach, then economic policy spokesman for the SPD parliamentary group, advocated for support for master craftsmen in parliament at the end of 1994. Ernst Schwanhold (SPD), then NRW's Minister of Economic Affairs, praised the state government in 2002 for making a significant contribution to the start-up initiative with the funding program.
"The Master Craftsmen's Start-up Bonus is an excellent example of how much can be achieved with comparatively little money," emphasized Christa Thoben (CDU), the state's Minister of Economic Affairs, on the 15th anniversary of the program in 2010. Her successor, Harry K. Voigtsberger (SPD), also had nothing but praise shortly afterwards: "The Master Craftsmen's Start-up Bonus is not only an extremely effective subsidy for start-ups in the skilled trades. It also lays the foundation for long-term success in businesses and new jobs."
And the current Minister of Economic Affairs, Garrelt Duin (SPD), also continues to rely on start-up support: "With measures like the master craftsman start-up bonus, we want to pave the way for young entrepreneurs in the skilled trades to start their own businesses." So far, there's no end in sight to this success story.
Currently, master craftsmen in Berlin who want to start a business, take over a business, or invest in an existing one receive up to €12.000 in funding. In a two-stage process, the basic funding is €7.000. After three years, they can apply for a job creation grant of €5.000. In North Rhine-Westphalia, the funding amount is €7.500. In both Berlin and North Rhine-Westphalia, receiving the bonus is subject to certain conditions.
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