How should young people become entrepreneurs

More and more young people are setting up companies

This is shown by the German edition of the Global Entrepreneurship Monitor (GEM) 2019/20, which the RKW Competence Center is creating in cooperation with the Institute for Economic and Cultural Geography at Leibniz University Hannover. 50 countries took part in the current study.

The TEA (Total early-stage Entrepreneurial Activity) start-up rate on which the GEM is based is defined as the proportion of those 18 to 64-year-olds who have founded a company during the last 3.5 years and / or are in the process of starting a company. The increase in this TEA rate in Germany - from 5 percent in 2018 to 7.6 percent in 2019 - is due in particular to the two youngest age groups.

For the second year in a row since the beginning of the GEM data series in 1999, the highest TEA rate is found in the 25 to 34-year-old age group with 11.8 percent and in the 18 to 24-year old age group with 10.1 percent. Compared to the younger age groups mentioned, the middle cohorts fell slightly in 2019. This is particularly noticeable in the group of 35 to 44 year olds (TEA rate 7.3 percent), which in many earlier years was the most start-up age group in Germany. The TEA rate of the two young age groups is two and a half times as high as that of the 55 to 64 year olds.

Positive image from the start

The positive image of start-ups and entrepreneurship as a form of employment has influenced younger people in particular. For 80.7 percent of those surveyed, successful start-ups enjoy a high reputation in society, and 55.3 percent of those surveyed believe that the media often report on start-ups. Media consideration and attention to the topic of “founding” has increased continuously in recent years.

Start-up attitudes according to age groups

The youngest (18 to 24 year olds) and oldest (55 to 64 year olds) age groups are among those who are least likely to be deterred by fear of failure. And that, although these two age groups rate their ability to start a business, on average, they rate it worse than people from other age groups. When assessing start-up opportunities in their own region, the 25 to 34-year-olds and 35 to 44-year-olds are right at the front.

Entrepreneurship Education is bearing fruit

The start-up climate in Germany has improved continuously in recent years. For example, in the case of school-based start-up training - which is still classified as the framework condition with the greatest need for action - the assessment is significantly more positive than in previous years. The evaluation of start-up education at universities and schools is also showing an upward trend. Since 2015, it has been observed in the results that both areas of education are performing more positively from year to year in terms of their supportive effect on start-ups, and that entrepreneurship education is becoming increasingly important in the German educational landscape.

Promote digital skills at an early stage

According to the GEM 2019/20, around a third of the population has digital skills, including basic programming skills. Will the current crisis mean that in the field of education, especially in primary and secondary schools, the imparting of economic background knowledge in connection with the expansion of digital skills will continue to intensify?

The corona crisis and the resulting faster virtualization of many areas of life and work intensifies the need for digital skills, especially among founders. The early learning and application of new technologies can bring essential competitive advantages for young founders. That is why new, integrative education and learning concepts are required at schools and universities, which place the handling of young people with digital media and technologies at the center of the training. In addition, the teaching of basic skills for programming or designing your own digital products should be on the curriculum.