More than a year after the adoption of a start-up strategy, the federal government sees progress – but at the same time there is a need to catch up in some areas.

Anna Christmann, the Ministry of Economic Affairs’ representative for the digital economy and start-ups, said that 45 percent of the measures that the federal government had planned had been implemented. We want to make progress on other points. The Green politician gave the example that start-ups can more easily apply for public contracts. When it comes to administrative digitalization, the federal government is not yet “where we should be.” In the past, a lot of things were left behind with digitalization.

The federal government is working on linking online services in order to get closer to the goal of a single point of contact for start-ups, as can be seen from an initial progress report on the start-up strategy, which was first reported by the “Handelsblatt”. The aim is to create an integrated, fully digital solution for the entire start-up process.

An important part of the strategy is to make it easier for young start-up companies to obtain venture capital to advance their development. According to the report, the Growth Fund Germany, which is intended to mobilize private capital from institutional investors for start-up financing, has started operations. The target volume of the fund is up to one billion euros.

Employees should benefit from company success

The federal government also wants to ensure that employees benefit more from the success of their own company. This is one aspect of a “Future Financing Act”, the draft of which was approved by the Cabinet in August.

According to the progress report, around 2,600 start-ups were founded in Germany last year – 18 percent fewer than in 2021. This year, start-up activity has picked up speed again. Given the high level of uncertainty, more than half of the start-ups currently find it difficult to assess future business development. In particular, higher interest rates and inflation presented many companies with particular challenges.

There are currently 31 “unicorns” in Germany, i.e. start-ups with a company valuation of at least one billion dollars. This puts Germany in fifth place internationally. Countries like the USA and Israel have more than five times as many unicorns per capita as Germany.

Criticism from the Union

Julia Klöckner, economic policy spokeswoman for the CDU/CSU parliamentary group, told the German Press Agency that given the increasingly difficult conditions for start-ups in Germany and declining investments, the federal government’s self-praise was remarkable. “To date, too little of the listed start-up strategy has been implemented. Even when it comes to employee equity participation, the traffic light has been left too short,” criticized Klöckner. Evidence of this is the poor development of new start-ups. “It doesn’t work. In principle, founders need a protective zone and have to be freed from almost all bureaucracy, especially in the first two years.”