OREANDA-NEWS. July 16, 2012. About 184,000 persons and thereby slightly less than one fourth of all those who entered into self-employment in Germany in 2011 had a migrant background (22%). Compared to last year, the number of start-up founders with a migrant background increased by 15% even while the number of start-ups overall declined by 11%. Self-employed non-EU foreigners (+31%) drove the increase. This is a key result of the special evaluation of the KfW Start-Up Monitor 2012. "Many migrants, particularly if they have no educational or professional degree recognised in Germany, apparently were not able to benefit as much from the favourable job market conditions as German start-up founders," says Dr Margarita Tchouvakhina, Vice President at KfW Bankengruppe. "However instead of becoming discouraged, they take their fate into their own hands and risk the move to self-employment. This greatly revives the start-up activities in Germany," adds Dr Tchouvakhina.

Migrants and Germans differ only slightly in their start-up projects. For example, migrants found start-ups somewhat more often as teams than do German founders (26% vs 19%) and they tend to more frequently hire employees already from the beginning (48% vs 27%);  35% of these employees come from their extended family (Germans: 30%). Start-up founders with a migrant background most often offer personal services through their company (35%; for instance, hairdressers, beauty parlours, photographers or DJs) (also a top choice in German start-ups: 30%).

However, one difference is striking: Among the start-up founders with a migrant background, in many cases the main motive given for founding a start-up was to implement a - frequently innovative - business idea, and from the outset hire employees. On average for the years 2008 to 2011, these so-called entrepreneurs accounted for 24% of founders with a migrant background, while for Germans it was only 11%. "In general, entrepreneurs are considerably more successful than other start-ups. They provide important stimulus for our economy," points out Dr Tchouvakhina.

A look at the data from 2008 to 2011 shows that nearly one fourth of all start-ups with a migrant background were carried out by people with Turkish nationality; almost one out of ten founders comes from Russia. The next largest groups are made up of Austrians, Poles, Italians and Greeks, each accounting for 4-5%. "Immigration from EU countries that are strongly impacted by the financial and debt crisis increased significantly in 2011: About 90% more immigrants came from Greece, 52% more from Spain. In the coming years we expect the number of start-ups by these groups to increase," says Dr Tchouvakhina.

To carry out their start-up project, migrants make use of their own finances somewhat less frequently than Germans (70% vs 67%) and instead seek out external lenders somewhat more frequently (41% vs 33 %). However, 24% of them - and thereby almost twice as many as German founders - run into difficulties: "Particularly for start-ups founded to exit unemployment, the structural disadvantages intensify for these founders in gaining access to finance. In addition, some may have educational and professional degrees that are not recognised, which understandably restricts support from external lenders," says Dr Tchouvakhina.