KfW Reports Record Number of Younger Entrepreneurs Driving Growth in Germany’s Start-Up Scene

KfW Reports Record Number of Younger Entrepreneurs Driving Growth in Germany’s Start-Up Scene

(IN BRIEF) Germany’s entrepreneurial landscape in 2024 saw a notable shift toward younger business founders, with the average age of new entrepreneurs dropping to 34.4 years. A 3 percent rise in new business registrations marked a slight recovery, largely driven by an increase in part-time businesses. While younger individuals showed strong interest in entrepreneurship, the overall rate of new ventures remained sluggish, reflecting a long-term trend of stagnation in entrepreneurial activity. However, optimism is building for 2025, with more people expressing plans to start businesses and a growing emphasis on entrepreneurship education.

(PRESS RELEASE) FRANKFURT, 3-Jun-2025 — /EuropaWire/ — In 2024, Germany saw a continued shift in entrepreneurial activity as the average age of business founders dropped to a record low of 34.4 years, the youngest since the KfW Entrepreneurship Monitor began tracking data. This marks a significant change from the early 2000s, when the average age was between 37 and 38 years. Notably, 39 percent of founders in 2024 were aged 18 to 29—an all-time high for this demographic. While the overall trend indicates a younger generation of entrepreneurs, a notable decline in the number of founders aged 40 to 49 has also been observed. This group represented just 16 percent of new business owners, while those aged 50 to 65 made up only 12 percent—the smallest share ever recorded for “silver entrepreneurs.”

These insights were part of the KfW Entrepreneurship Monitor’s findings, based on 50,000 telephone interviews and 10,000 online surveys conducted in 2024. The Monitor defines a business founder as anyone who has become self-employed on either a full-time or part-time basis, whether by starting a business, freelancing, or acquiring an existing one.

Modest Growth in Business Foundations

The year 2024 saw a slight increase in the number of newly established businesses, rising by 3 percent, or 17,000, to a total of 585,000. This rise is attributed to a cooling labor market, which has encouraged more individuals to turn to self-employment. However, this uptick is primarily due to the growth in part-time business ventures, which increased by 5 percent to 382,000. In contrast, the number of full-time entrepreneurs dropped slightly by 1 percent, totaling 203,000.

Despite the positive growth, the broader trend still points to a stagnation in entrepreneurial activity. Since the early 2000s, the rate of new businesses has steadily slowed, with little to no significant increase since 2018.

Dr. Dirk Schumacher, Chief Economist at KfW, commented on the situation: “The entrepreneurial drive in Germany remains weak, which could be partly due to the attractiveness of salaried employment during a strong economy. It also reflects deeper issues in mentality and education. However, the new government’s focus on entrepreneurship education is a positive step forward.”

Positive Outlook for Younger Entrepreneurs

One bright spot is the high level of entrepreneurial ambition among younger people. Around 36 percent of 18- to 29-year-olds expressed a preference for self-employment over salaried positions. Additionally, the number of people actively planning to start a business has risen from 3.6 percent in 2023 to 4.9 percent in 2024, signaling an optimistic outlook for 2025.

Key Findings from the KfW Entrepreneurship Monitor

• Cessation Rate: Approximately one-third of new businesses close within the first three years, with 61 percent remaining in operation after five years.
• Capital Investment: The trend towards more capital-intensive startups continues. In 2024, only 56 percent of founders invested less than EUR 5,000—down from 67 percent in previous years, likely due to inflation.
• Self-Funding: The majority of new entrepreneurs (75 percent) funded their ventures entirely with their own capital, the highest level on record.
• Business Type: 83 percent of businesses in 2024 were founded from scratch, with only 10 percent involving business takeovers and 7 percent involving participations. Dr. Schumacher highlighted the importance of encouraging more business successions to address the growing gap in this area.
• Digitalization: A record 36 percent of new businesses in 2024 were online-based, utilizing digital technologies to deliver their products or services.
• Job Creation: Newly founded businesses in 2024 created 485,000 full-time equivalent jobs.
• Female Entrepreneurs: Women accounted for 36 percent of new entrepreneurs in 2024, consistent with the long-term average. Interestingly, 28 percent of female founders pursued short-term self-employment, compared to just 17 percent of their male counterparts.

Media Contact:

Ms. Nina Luttmer
+49 69 7431 41336
nina.luttmer@kfw.de

SOURCE: KfW