Study on Corona Consequences: Migrants start fewer companies

Status: 02.11.2021 3:39 p.m.

In the Corona year 2020, the number of business start-ups by migrants fell particularly sharply. For the first time since 2009, their share among business start-ups was lower than the share in the population.

The effects of the corona pandemic are also increasingly evident in the start-ups of migrants. Last year, for the first time since 2009, the proportion of founders who did not have German citizenship was below their proportion of the workforce, as a study by the state development bank KfW shows. The now published KfW “Start-up Monitor” is based on a representative survey of around 50,000 people. The survey has been taking place annually in this form since 2002.

Above average decline

The number of start-ups by migrants fell to 110,000 in 2020 – in 2019 the comparison figure was 160,000. The share of the total number of business start-ups in Germany fell from 26 to 21 percent. In the Corona year 2020, the number of business start-ups fell from 605,000 to 537,000. “Business start-ups by migrants fell above average in the Corona year,” explains KfW chief economist Fritzi Köhler-Geib. Nevertheless, even after the pandemic, migrants remained an “important pillar of start-up activity in Germany”.

Traditionally, migrants are more willing to start their own business than the average workforce. On the one hand, their desire for independence is more pronounced than on average. According to an earlier KfW study, 38 percent of them prefer self-employment to dependent employment; for all German citizens, the proportion is 29 percent. The focus of the business start-ups is on “personal services”, especially in the hospitality industry – an industry that was particularly hard hit by the effects of the restrictions during the pandemic.

Emergency start-ups due to a lack of employment alternatives

On the other hand, migrants in Germany have poorer chances on the labor market. This was also shown last year by the proportion of “emergency start-ups” reported by the KfW start-up monitor for this population group: The percentage of emergency start-ups due to a lack of employment alternatives for migrants was 35 percent last year, an increase of three percentage points compared to 2019. On average, it was 35 percent the proportion of emergency start-ups even fell from 23 to 16 percent.

Leave a Reply

Your email address will not be published. Required fields are marked *