OREANDA-NEWS. In 2012 the job market in Germany continued to evolve positively. Last year this environment provided good opportunities for people to find dependent employment. This impacted negatively on startup activity: 775,000 persons decided to start their own business – 60,000 or 7% fewer than in 2011. It was the lowest number of startups in Germany since 2000. These are the main results of KfW's current survey on startup activity in Germany.

The evaluations of the representative KfW surveys show that low startup activity mainly translates into fewer full-time business founders (315,000 against 381,000 in 2011). This also affects employment creation. In 2012 startup businesses created a total of 383,000 full-time equivalent jobs – 212,000 jobs for the full-time business founders themselves and 117,000 for their employees. This is a 15% decline against 2011. The number of jobs created dropped to the lowest level since the start of the time series in 2005. In a good job market it can be difficult for startup entrepreneurs to hire staff. "Startups compete with established enterprises for qualified staff and, obviously, their new businesses are not yet market tested. However, they can advertise their flexibility and opportunities for employees to shape business decisions to showcase their attractiveness as employers", said Dr Jorg Zeuner, Chief Economist of KfW Bankengruppe.

The city states of Berlin, Hamburg and Bremen have the highest startup activity. In these conurbations, individuals who decide to set up a business benefit from agglomeration effects such as short distances and low transport costs in large local sales markets. They are followed by the western German states (excluding the Saarland) as a group, then the eastern German states. The Saarland and Brandenburg record the lowest activity.

"We are not expecting a startup boom in 2013 either. However, if the job market proves to be less stable than expected, this could stimulate startup activity somewhat", Dr Jorg Zeuner commented on the expectations for the year.