Number of company start-ups declines sharply

Economic challenges are slowing down start-ups: Why only 161.000 new companies were founded in 2024 and which sectors are particularly affected.

This article is part of the special feature GründerNavi – for founders and young companies

The number of new business start-ups is declining dramatically. According to calculations by the Center for Economic Research (ZEW) in Mannheim and Creditreform Economic Research, only around 161.000 new companies will be founded in Germany by 2024. 

Photo: © Creditreform/ZEW

Between 2015 and 2021, the average was around 168.000 new businesses founded annually, compared to over 200.000 in the first 2000s. The construction industry has also been severely affected.

"The economic crisis and bureaucracy are massively slowing down the startup scene," says Creditreform spokesperson Patrik-Ludwig Hantzsch . High energy costs, a shortage of skilled workers, and increasing bureaucracy are deterring potential founders. "Geopolitical uncertainties have also recently dampened the willingness to start a business," Hantzsch adds.

The manufacturing sector is particularly affected

Photo: © Creditreform/ZEW

According to the study, the manufacturing sector is particularly affected . In 2024, there were approximately 5.000 new business start-ups. This is 38 percent fewer than in 2016, when there were just over 8.000. The number of new businesses also plummeted in the research-intensive segment of industry compared to 2023 (down 20,8 percent). In the construction sector , the number of new businesses fell by 12,7 percent in 2024 to just around 14.700, about 5.500 fewer than in 2019. The main reasons cited were increased raw material and energy costs, higher interest rates, and the ongoing uncertainty surrounding economic developments.

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The number of start-ups is also declining again, after having grown strongly in previous years – currently by 20 percent in the software sector. "Digital technologies are gaining in importance, but they too are not immune to the weak economy," explains ZEW economist Dr. Sandra Gottschalk.

To revive entrepreneurial activity, ZEW and Creditreform are calling for targeted support for innovative companies . "Broad, indiscriminate support is not very effective. Tax incentives for investments in research and development, as well as a focus on startups with genuine innovation and growth potential, would be more sensible," says Hantzsch.

Sources: Creditreform; ZEW

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