Germany´s startup ecosystem developed rapidly over the last twenty years. Berlin especially became an internationally renowned startup location, but other regions also established a thriving startup culture. This development is an important addition to Germany´s long-standing entrepreneurial tradition, represented by its many family businesses of all sizes. And while Germany is a very innovative country, its innovation culture focuses on continual improvement.
The disruptive, groundbreaking leaps that are part of the digital transformation were not exactly the strong suit of most German companies. Hopefully, the mixture of traditional companies and startups will help to solve this issue.
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Therefore, the startup ecosystem and its impact on Germany´s innovative culture and its economic success are important research and policy areas. The Friedrich Naumann Foundation for Freedom and the Bundesverband Deutsche Startups e.V. collaborated to create the Migrant Founders Monitor 2021, which looks at the role of migrant founders in the German ecosystem.
For the first time, the MFM examines the connection between migration and startups in Germany. Whereas there is already plenty of documentation on migrants who have set up traditional businesses, there was a lack of data and information regarding the role of migrant founders for innovative and growth-oriented startups.
Strikingly, the MFM shows that particularly first-generation migrant founders think bigger than the average founder in Germany. They are more willing to take risks and aim more often for exits. Also, many have a degree in STEM subjects (science, technology, engineering and mathematics).
All in all, first-generation migrant founders seem to bring the Anglo-Saxon startup mentality to Germany, with a strong focus on innovation and the willingness to grow fast.
Key findings:
- With a share of 20%, founders with a migration background play an essential role in the startup ecosystem and are consequently a driving force behind economic innovation in Germany.
- Migrant founders are particularly strongly represented in the early startup stages, which is especially true for first-generation migrants. It indicates the international appeal of German startup hotspots.
- 91% of first-generation migrant founders have an academic degree, compared with 84% in the ecosystem as a whole. In addition, many have a background in STEM subjects.
- First-generation migrant founders are characterized by a strong startup mindset. They are more willing to take risks and 68% aim for an exit.
- When it comes to funding and collaboration, founders with a migration background are still facing difficulties, pointing to cultural and structural barriers.
