a persistently high failure rate among newly established businesses, particularly within the hospitality and creative sectors.. Recent data released by the Federal Statistical Office (Destatis) reveals that a mere 20.2% of businesses founded five years prior were still operational in 2023, a stark contrast to the 80.2% survival rate of those launched just one year earlier. This decline underscores deeper structural issues impacting entrepreneurial viability across various industries.
The hospitality sector, alongside areas like creative arts, courier services and travel agencies, consistently demonstrate alarmingly low survival rates. Among businesses established in the “creative, artistic and entertainment” industries, a dismal 27.3% remained active after five years, reflecting challenges associated with fluctuating demand and fierce competition within these fields. Courier and express delivery services followed closely behind at 27.9%, while travel agencies and tour operators struggled with a 31.9% survival rate.
While some sectors, such as veterinary services (60.2%) and healthcare (57.4%), display relatively higher rates of business longevity, the overall trend paints a cautious picture. In 2023, approximately 269,000 of the 3.2 million German businesses were newly established, representing an 8.4% founding rate – a modest increase from the 8.0% recorded the previous year.
However, the encouraging growth in new ventures is overshadowed by a more worrying statistic: the closure rate exceeding the founding rate. Destatis reported a total of roughly 283,000 business closures in 2023, translating to an 8.9% closure rate. This indicates that the German economy is experiencing net business losses, potentially stemming from factors such as persistently high inflation, rising interest rates, ongoing supply chain disruptions and evolving consumer behavior.
The data raises critical questions about the government’s support for small and medium-sized enterprises (SMEs) and highlights the need for targeted policy interventions aimed at bolstering business resilience and fostering a more supportive environment for entrepreneurial success. The increasing disparity between founding and closure rates demands a thorough assessment of the systemic barriers hindering sustainable business growth and jeopardizing the long-term health of the German economy.
