Migrant Founders Monitor 2023 confirms bureaucracy as major hurdle

Startups in Germany benefit from talented founders from abroad. But despite their advantages, these high potentials often encounter bureaucratic hurdles and language barriers.

The Migrant Founders Monitor by Startup-Verband e.V. and Friedrich Naumann Foundation emphasizes the importance of internationality and immigration for the startup ecosystem, as talented employees alleviate the shortage of skilled labor and ambitious migrant founders provide valuable impetus for innovation and growth. The report explores the characteristics and challenges of migrant founders in Germany.

Above all, one central message emerges from this year's Migrant Founders Monitor: immigration also plays an important role in the topics of innovation, founding and thus economic development.

Maren Jasper-Winter, Member of the Board Friedrich Naumann Foundation for Freedom

The current study shows that founders with an immigrant background make up a significant part of the German startup ecosystem, with a share of 21 percent. Six out of ten German startups valued in the billions have at least one Migrant Founder on their founding team. The distribution of Migrant Founders across industries and federal states is closely related to the internationality and population structure of the respective locations. Another finding of the Migrant Founders Monitor is that six out of ten Migrant Founders are first-generation founders who were born abroad.

The startup ecosystem is very international - even here in Germany. At the same time, there is still a lot of untapped potential. If we become more international and attractive for founders from all over the world, our country will benefit.

Magdalena Oehl, Deputy Member of the Board Startup Association

Studies and the job market as motivators

A large proportion of first-generation migrant founders came to Germany to study here. This development confirms the international attractiveness of the German higher education and research landscape. Another factor is the strength of the German labor market, which motivated 22 percent of the Migrant Founders surveyed to come to the country for a job. However, it also shows that only a comparatively low 8 percent of respondents came to Germany to start a business here.

Bureaucracy as a barrier

The study describes that 42 percent of first-generation migrant founders are at a disadvantage when dealing with authorities and offices in Germany. Complex procedures and a lack of digitization make cooperation more difficult and lead to higher costs and lost time, as additional services such as translations are required. A third of respondents also find contact with banks difficult, and similar challenges arise here.

The result shows the high potential of migrant founders in the German startup ecosystem. In particular, their more international orientation and their pursuit of venture capital as a growth resource make them valuable players in the German economy. However, obstacles in bureaucracy and banks still need to be removed in order to tap their full potential and increase the attractiveness of Germany as a business location.

The entire Migrant Founders Monitor 2023 can be downloaded from the Startup Association's website here.