Women and Graduates - Hopes for Start-Ups

To keep the number of start-ups in Germany on a high level in 2050, the percentage of women venturing into independence has to increase by six percentage points and the number of university graduates by ten percentage points in the next 42 years. If this does not happen, a significant decrease in start-ups in Germany is likely to take place. Due to the demographic change, the 30- to 45-year-old dependent labour force will decline. As most company founders derive from this group, the dynamics of start-ups will slow down. This is likely to result in declining employment figures and a lower innovative strength of the whole economy. These are the findings of a study by the Centre for European Economic Research (ZEW) in Mannheim. The study analyses the parameters which have to be altered to stimulate the start-up activities in a declining and ageing population.

The study indicates that during the last years an average of about 250,000 companies was founded each year. Due to the demographic change, this figure will decline to 195,000 by 2050 if the general conditions stay the same. "Model calculations prove that the probability of founding a company is largely influenced by the gender and qualification of an employed person. The age also plays an important role. These three factors have to be changed to guarantee new start-ups in the future", says ZEW expert Dr. Sandra Gottschalk.

The study simulates three scenarios. The first simulation increases the number of start-ups by women from currently 16 percent to 22 percent in 2050. This moderate increase of six percentage points raises the number of start-ups significantly. The study indicates that about 206,000 start-ups can be founded by 2050.

The second scenario simulates an increase of graduates among the dependent labour force from currently 16 percent to 26 percent by 2050. The tendency to found a company rises according to qualification. Therefore, the increase of the percentage of graduates raises the number of start-ups significantly to a total of 211.000 start-ups by 2050.

The last scenario makes clear that, accumulated over the whole period of the analysis, the effect on the development of start-ups is weaker compared to the other simulations if older employees between 50 to 59 are motivated to found a company. In the model calculation, the percentage of self-employed persons between 50 and 59 is increased from 0.38 percent to 0.41 percent (in comparison, the rate of 30- 39-year-olds currently stands at 0.86 percent). This measure does not stimulate the number of start-ups like the other scenarios over the whole period of the analysis. However, according to the study, a total of 208,000 start-ups can be founded by 2050 due to the motivation of the elderly.

Contact

Dr. Sandra Gottschalk, Phone: +49/621/1235-267, E-mail: gottschalk@zew.de