Start-ups led by founders with international roots are thriving in Germany's tech scene, a survey has found. Non-German company founders, however, find bureaucratic hurdles and language barriers as obstacles to business development.
People with a migration background* play a vital role in Germany's start-up scene, according to a survey published on Thursday (May 4).
About one fifth of start-up founders in the country have non-German roots, the Friedrich Naumann Foundation and the German Start-up Association found in their joint study. Within this group, 58% of founders were reported to be born outside of Germany.
The majority said they had moved to Germany either during their youth or for their studies. Only about 8% came to Germany to explicitly set up a company, the survey found.
The study also found that company founders with a migrant background had above-average levels of education – the proportion of those with a university degree was 94.5%. Among start-ups in Germany as a whole, 87.2% of founders are university graduates.
More diverse, more ambitious
The study also said that those with a migrant background in the start-up scene showed more ambition: Around 30% sought a sale or IPO (initial public offering) of their company with at a valuation of more than one billion euros.
This is more than twice as much than the overall average. To achieve this goal, company founders said they relied on external capital.
Companies with founders from a migrant background were also found to be ahead when it comes to team diversity, with slightly more than half of their employees coming from outside of Germany, according to the survey. Having mixed-gender or all-female start-up teams was also above average among founders with a migrant background, reaching 44%.
Non-German company founders did, however, cite bureaucratic hurdles as well as language barriers as obstacles to business development. They also found it difficult to establish business relations with banks. For this reason, almost 57% of this demographic said they saw themselves at a disadvantage compared to other founders.
With Reuters
* Roughly a quarter of Germany's population (25.9%) are so-called "people with a migration background" ("Menschen mit Migrationshintergrund"). A person is officially considered to have a migration background if they, or at least one of their parents, was born without German citizenship.