Finally more diversity - More and more founders with a migration background

Business start-ups are a driving force behind economic and social development. However, a flourishing labor market, an aging society, and the lack of a 'culture of failure', which is often criticized, contribute to the fact that there are relatively few start-ups in Germany.

However, one social group is an exception. People with foreign roots are extremely active in founding a company: between 2005 and 2018, the number of self-employed people with a migration background rose by around 36% from 566,000 to 773,000. In 2019, 160,000 of a total of 605,000 company start-ups, i.e. every fourth start-up, were realized by migrants.

How can this trend be explained and what economic and social potential does it offer?

Possible explanations:

Willingness to take risks

Migration is a selective process that involves significant ambition, creativity and determination. Accordingly, migrants tend to be more adventurous and entrepreneurial than those they leave behind. In addition, people with migration experience have increased resilience, ie the ability to deal with risky situations.

social capital

A particular advantage that entrepreneurs with a migrant background enjoy is that they can often draw on cheap or free labor from family members, who are often motivated by a strong sense of solidarity to contribute to the family business and “do it together”. In 2019, almost half of the migrants had self-employed acquaintances or relatives. In the case of founders, this proportion is 61%. This not only creates role models, but also gives the new founders access to a broad network and the experiences of their environment.

job opportunities

However, the increased start-up activity also reflects the existing social inequalities. For example, the path to self-employment is often the only way for members of immigrant groups who are particularly discriminated against in the labor market to gain a foothold in the target countries. A distinction must therefore be made between those emergency start-ups and so-called opportunity start-ups, the pursuit of explicit business ideas. Even if the latter make up the clear majority at 47%, there are comparatively many emergency start-ups among migrants. In 2019 it was 32% compared to 23% among all start-ups.

Possible potentials:

Economic potential

The employment effect of entrepreneurs with a migrant background is significant: between 2005 and 2018, the number of people employed in migrant companies in Germany grew by 50 percent from around 1 million to around 1.5 million people. However, their contribution is not limited to creating jobs in the target countries, but also includes important economic areas such as innovation and trade. In this way, the new type of 'transnational' self-employed person, who is integrated into networks in both the old and the new home country, can strengthen economic relationships between the countries of destination and countries of origin. Through access to those international networks, migrants also benefit from knowledge transfer,

Social Potentials

Entrepreneurship can play a crucial emancipatory function, enabling migrant families to acquire property, fund their children's education, move to better neighborhoods, and ultimately create social and economic advancement. As was recently observed with the example of Biontech founders Özlem Türeci and Uğur Şahin, the success stories of entrepreneurs with a migration background can give young people with foreign roots confidence and trigger a positive change in public perception.

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