German startups are satisfied with their regional environment and most of them are also optimistic about the future, according to the results of a survey The management consultancy PwC surveyed 1,000 decision-makers in German startups. The biggest challenge is finding employees.
Nine out of ten startups surveyed by PwC are very or fairly satisfied with their environment. There is a clear divide between large and small cities: 95 percent of founders in large cities are satisfied with the startup ecosystem, compared to only 70 percent in small towns and 79 percent in medium-sized cities.
“The public sector, including individual municipalities or communities, is called upon to increase the attractiveness of the location,”
says Ashkan Kalantary, Head of the PwC startup initiative NextLevel.
“Regions that behave too passively run the risk of young skilled workers and entrepreneurs migrating and choosing other locations.”
Nationwide, digital infrastructure leads the individual location factors with 89 percent satisfaction. Logistics connections are also rated at least good by 87 percent, followed by access to financial resources at 86 percent.
The startups surveyed are also largely doing well in other respects: Two-thirds expect revenue growth in 2018, and 61 percent plan to hire additional staff. However, many young companies are reaching their limits here: Every second startup considers recruiting their biggest challenge. For 62 percent of respondents, finding suitable employees is very or somewhat difficult. Programmers, IT security experts, and developers are particularly sought after.
“Cooperations are attractive for those involved”
Seven out of ten startups surveyed collaborate with other players, most frequently with established companies. Every second startup cooperates with the Old Economy. Young entrepreneurs most frequently anticipate the benefits of collaboration in the development of new sales channels (40 percent), the acquisition of missing know-how (37 percent), and the easier development of new markets and customer groups (36 percent each). However, access to cooperation partners varies by location. For example, the proportion of startups that do not yet have partners is significantly higher in small towns and rural areas (42 percent and 32 percent, respectively) than the overall average of 29 percent.
"Cooperations are attractive for those involved because they can learn from each other. Traditional companies bring new technologies and product ideas into their own companies, learn agile working methods, and experience a different corporate culture,"
says Kalantary.
“Startups, in turn, gain access to customers, new markets, and internal structures from the finance function to the human resources department.”
