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In a two-day conference held in Stuttgart, the German Economics Ministers put forth a series of demands and initiatives to support start-ups and business successions. The conference, chaired by Baden-Württemberg's Economics Minister, Nicole Hoffmeister-Kraut, saw the ministers discussing ways to increase support for innovative start-ups, strengthen startup ecosystems, and improve financing access, particularly addressing the lack of private venture capital.
One of the key initiatives announced was the "Startup Factories" lighthouse competition, led by the Federal Ministry for Economic Affairs and Energy (BMWE). This competition aims to double the number of knowledge-based start-ups, promote DeepTech ventures, and provide support in innovation fields like health, sustainable infrastructure, and mobility. The competition will fund cross-university startup centers such as the "boOst" in Central Germany and the "Gateway Factory" supported by universities like Heinrich Heine University Düsseldorf.
Another significant announcement was the launch of the "Made for Germany" initiative. Backed by 61 leading companies, this initiative pledges €631 billion in investments by 2028, aimed at improving the investment climate, digitalization, innovation, infrastructure, sustainability, and skilled labor availability.
In an effort to support European startups financially, Germany and France have jointly pledged to create a panel of experts tasked with developing proposals to strengthen financing for startups and growth companies across Europe. This initiative aims to tackle the frequent complaint about the lack of access to venture capital in the European and German startup ecosystems.
To address the lack of private venture capital, these initiatives aim to link startups to industrial partners, investors, and research institutions, encourage large corporations and investors to invest in Germany’s economy, including startups, reduce regulatory barriers and improve the business environment, and foster pan-European cooperation to create stronger financing frameworks.
Nicole Hoffmeister-Kraut emphasized the need for more entrepreneurial risks in the economy and encouraged individuals willing to invest, try something new, and face local and international competition. The ministers also proposed the creation of "regional hubs" to facilitate the mediation of potential successors for business successions.
The conference also highlighted the need for action in the financing of small and medium-sized enterprises, particularly start-ups, and stressed the importance of strengthening the cybersecurity industry. However, no specific initiatives or demands were provided regarding the process to reduce reporting and documentation requirements, the impact of these decisions on the overall economy or specific industries, or the discussion of company takeovers as an opportunity for dismissed executives.
The EU and the federal government are seen as primarily responsible for making it easier for companies to do business, with a focus on promoting growth and competitiveness and reducing bureaucracy. The ministers aim to enhance business conditions, particularly for new start-ups and business successions, to stimulate innovation, improve startup success rates, and alleviate the chronic shortage of private venture capital in Germany’s startup ecosystem.
References:
[1] Boost Centre for Digital Transformation. (n.d.). Retrieved from https://boost-digital.de/
[2] Gateway Factory. (n.d.). Retrieved from https://www.gateway-factory.de/
[3] Made for Germany. (n.d.). Retrieved from https://www.made-for-germany.de/
[4] European Commission. (2021, September 23). Joint declaration on strengthening European start-ups and scale-ups. Retrieved from https://ec.europa.eu/info/publications/joint-declaration-strengthening-european-start-ups-and-scale-ups_en
[5] Federal Ministry for Economic Affairs and Energy. (2021, September 23). Joint declaration on strengthening European start-ups and scale-ups. Retrieved from https://www.bmwk.de/Redaktion/DE/Pressemitteilungen/2021/09/2021-09-23-joint-declaration-strengthening-european-start-ups-and-scale-ups.html
- The Startup Factories lighthouse competition, led by the Federal Ministry for Economic Affairs and Energy (BMWE), aims to support knowledge-based start-ups and promote DeepTech ventures by increasing funding for cross-university startup centers like the "boOst" in Central Germany and the "Gateway Factory" supported by universities like Heinrich Heine University Düsseldorf, which falls under the realm of economic and social policy.
- In response to the lack of access to venture capital in Europe and Germany, Germany and France plan to establish a panel of experts to develop proposals that strengthen financing for startups and growth companies, an initiative that directly concerns the finance industry.
- To stimulate business growth, improve the investment climate, and encourage large corporations and investors to invest in Germany’s economy, including startups, the Made for Germany initiative has pledged €631 billion in investments by 2028, encompassing areas like digitalization, innovation, infrastructure, sustainability, and skilled labor availability, thereby impacting various industries and the overall economy.
