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Welcome to Germany: Opportunities for Canadian Women-Owned Enterprises

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Table of Contents

Germany: An overview

Germany is the largest market in the European Union (EU)

Population

Foreign inhabitants

Trade between Canada and Germany is increasing

Export growth from 2010 to 2019:

Share of goods from Canada:

Share of goods from Germany:

Germany is well known for its strong small and medium-sized enterprises (SMEs)

SMEs represent 99.3% of German enterprises

Germany: An overview

Women are well established in the German workforce

Employed people

Almost half of employed people (46.2%) are women

22% of employees have graduated from university, half of whom are women

Self-employed

9.8% of employed persons in Germany are self-employed; the largest German cities, Berlin (14.8%) and Hamburg (13%), have the highest share of self-employed persons

12% of male and 7% of female workers are self-employed

High levels of female entrepreneurship: Percentage of females in start-up businesses: 29% in full-time and 43% in part-time jobs

Family policy in Germany: Child care and parental allowance

1 | Introduction

In Germany, seven percent of the female workforce are self-employed, often as owners of small and medium-sized enterprises. At the same time, women in Germany have a substantial share in start-up activities. The female share in business start-ups amounts to 29 percent in full-time and 43 percent in part-time jobs (cf. KfW 2018). However, in recent years the number of new entrepreneurs among the female and male population has declined overall due to a stable German job market and low unemployment rates. Hence, in 2017 only 557,000 persons started a new business and became self-employed. Nevertheless, Germany remains an attractive country for entrepreneurship for women as well as for men. There continues to be a high number of innovative entrepreneurs in digital and other growing industries (cf. KfW 2018).

With a growing economy, the German market offers great opportunities for Canadian women-owned enterprises. This report provides reliable market information for selected sectors in Germany to assist Canadian women in evaluating market opportunities for their products and business ideas. It also provides tips on women’s networks in Germany and on leading German trade fairs, as well as information about start-up and twinning programs.

In the following, we first take a look at general macroeconomic conditions and trends that are important factors for the success of future business activities in Germany. Then we deal with the general prospects of selected growth sectors in the country. Sectors such as agri-food and agriculture, consumer products, professional services, digital media and ICT, the creative industries and cleantech are described. For each of these sectors, we provide useful information and practical advice for women-owned businesses. To conclude, general advice on starting and running a business in Germany is provided.

Your key contact in Germany: The Embassy of Canada in Berlin

The embassy offers services for Canadian companies, assistance to Canadians, cultural cooperations and more.

The Embassy of Canada aims to support Canadian women-owned enterprises in Germany with this report.

2 | The German economy

Key facts:

Germany: A major player in the EU with strong international trade relations

Germany is the leading economy in Europe and one of the most important in the world. In 2019, gross domestic product (GDP) of 3.4 trillion euros was generated, representing 21.3 percent of the EU’s economic performance (cf. Eurostat 2019). Thus, within the EU, Germany has the biggest market potential. As Figure 1 shows, German GDP has grown by 13.7 percent since 2010. This is significantly stronger growth than the EU average (+10.7 percent).

Deeper economic integration between Canada and Germany is desirable for both countries. The new Canada-European Union Comprehensive Economic and Trade Agreement (CETA) offers strong growth potential in bilateral trade between Germany and Canada. In particular, German imports from Canada have strong potential for further development in many economic areas, since, up to now, the focus has been mainly on primary products. Due to expected GDP growth, international trade and division of labour may continue to increase in the future. This provides many possibilities for closer bilateral integration especially in regard to trade of knowledge-based industrial goods. International communication can lead to strong economic and social progress for both countries as a result of knowledge transfer.

Thriving knowledge-based industries and high consumption rate in Germany

One of the main drivers of the German economy in recent years has been the increase in significance of economic sectors with an above-average share of highly qualified staff. Since 2010, employment in knowledge-intensive industries has increased by 9.8 percent with total employment growing strongly by 15 percent. Of note, knowledge-intensive services have gained significantly in importance. In 2017, 20.7 percent of German employees worked in knowledge-intensive services, while in 2010 this figure stood at 19.8 percent (cf. Federal Employment Agency 2019).

There is a shortage of workers for many industries due to an increase in demand for highly qualified employees in Germany, which has one of the lowest overall unemployment rates in the EU (5.2 percent annual average in 2018). Shortages of (qualified) labour in Germany may become increasingly severe in the future due to the shrinking of the population of employable age.

Along with knowledge-based structural changes, there are many other drivers of the German economy. In addition to export growth, increasing consumption has significantly stimulated German GDP in recent years. Since 2010, consumption has increased by 11.3 percent in real terms (cf. Eurostat 2019). Compared to the EU average, this is relatively strong growth, EU consumption having risen by 6.8 percent in the same period. As long as interest rates in Europe remain relatively low and German buying power remains high, it may be expected that consumption will stay at a high level, or even continue to rise. German consumption growth was lower than total GDP growth, implying a decreasing consumption share of total GDP. Not only consumption but investments have also increased remarkably since 2010. German gross fixed capital formation grew by 18.2 percent from 2010 to 2017. This is significantly higher than the EU average (+12.5 percent). Despite this strong growth, Germany’s investment share of total GDP (20.3 percent) is only slightly higher than the EU average (20.2 percent). Because investments are the basis for economic progress resulting from new technologies or processes, a further increase in investments is desirable. Specifically, a high level of gross fixed capital formation, especially in the research and development field, is a very important requirement for future economic growth.

Four networks that Canadian female entrepreneurs should know

Useful links for Canadians to open a start-up business in Germany

3 | An insight into German markets

3.1 Agriculture and agri-food: Opportunities due to diversification of products

Key facts:

Agriculture and agri-food comprise, as part of the food supply chain, three major industries: agriculture, the food industry and food retail. Major German business sectors are meat and dairy products as well as baked goods, confectionery and alcoholic beverages. German food retailing is mainly channeled via supermarkets and discounters. While women and men are equally represented in the food retailing industries, the female share in agriculture represents roughly a quarter of staff (27 percent in 2017) (cf. IAB 2018). In Germany, about 600,000 people were working in agriculture and contributing to one percent of GDP and 0.6 percent of gross value in 2017.

90 percent of farms are owner-managed, with the size of individual businesses constantly growing. Meanwhile the number of farms is in decline. As of 2016, there were a total of 275,400 farms with on average 60.5 hectares of land. These farms are typically highly specialized. The farming sector also receives funding from the German government (cf. BMEL 2018). About one third of Germany’s total agricultural production is exported. Trade is sometimes challenged by stringent regulations on food production on both national and EU levels.

The food industry is an important driver of the German economy and of economic growth in general. Total sales of the food industry amounted to 181 billion euros in 2017, representing remarkable growth of 5.7 percent over the preceding year. This growth trended over five years with annual increases of 5 percent. Germany is the third largest exporter of food industry products in the global market. The most important trade partner for Germany is Europe, accounting for three quarters of exports and 67 percent of imports of the food industry. Major partners include the Netherlands, France and Italy as well as the United Kingdom and Switzerland. On an international level, the US, China and Russia are notable customers (cf. BMWi 2019).

Farming will go digital

Agri-food is influenced by a wide range of global trends. Organic production, the application of digital technologies, e.g. precision farming with usage of GPS and drones, and bio-technology are major aspects of the industry today and for the future. Current advancements can be discovered at the numerous industry fairs that are held in Germany throughout the year. The annual International Green Week in Berlin is the worldwide leading fair for agri-food. Furthermore, local farmers’ markets are well established and well recognized by Germans. Recent developments such as so-called “market-crowding bridges” bring regional producers and consumers together using digital technologies. This trend is expected to continue in the future and implies advanced market access (cf. BMEL 2018).

Green biotechnology and organic products as promising avenues of food industry. The food industry benefits from a high domestic demand in Germany which is marked by two major trends:

Firstly, with increased awareness of sustainability, the market for organic and regionally produced products is growing and is accompanied by a diversification of products. Consumer willingness to pay for high-quality food is increasing steadily and new brands developed by start-up entrepreneurs have entered markets successfully in Germany. While the market share of organic and fair-trade products is still low, growth rates have been particularly high and are expected to increase. Businesses in agri-food could benefit from Germany’s image as a supplier of premium brands on international markets.

Secondly, biotechnology and related innovations are opening up prospects for the German food industry. While Germany is characterized by strong resistance to genetic engineering, green biotechnology has good market prospects beyond these issues. Opportunities relate to a reduction of food components that can trigger allergies and to an increase of beneficial ingredients such as vitamins. Moreover, manipulating enzymes in food can result in a broadening of the range of consumables, thus benefiting sustainability. An increase in the world population, accompanied by domestic trends such as aging in society and individualization as well as growing sustainability and health awareness, expand opportunities further. With a high number of biotech clusters and financial programs for related research, Germany is well positioned in the biotechnological field.

Influence of digitalization and opportunities of franchise models for food retailing

Cooperation and franchising models are good options for entering the German market of food retailing. With 1.5 m² per capita, Germany possesses the fourth largest sales area for grocery products in Europe. Sales in food retailing have shown high growth rates and in 2017 stood at 158.3 billion euros, 45 percent of which were recorded by discounters (cf. EHI Retail Institute 2017). Discounters are well established in Germany and each of the biggest players offers at least one cheaper brand of their own. The four main foodstore chains are Edeka, Schwarz Group, Rewe Group and Aldi. Addressing consumers’ increasing appetite for regional products, companies are currently launching various pilots focusing on fresh and organic goods as well as on premium quality convenience products. These initiatives expand business opportunities for regional producers and organic farmers. Generally, well-established brands of the food industry are significant gatekeepers when it comes to new businesses entering the market.

Delivery on-demand and online shopping are further new trends in food retailing. Ongoing digitalization and e-commerce related to food retailing are likely to continue to increase in Germany, providing new business opportunities for entrepreneurs. However, Germans still show a high degree of reluctance to shop online for groceries and rely on supermarkets, which offer fairly long opening hours (cf. Lebensmittelzeitung 2018).

Potential of the market:Agriculture and agri-food in Germany
ProspectsChallenges
  • Strong and growing domestic and global demand (exports) for German products
  • Productivity increase by adapting digital technologies for farming
  • Product diversification: organic food, fair-trade, regional products
  • High-quality brands
  • Franchise and cooperation related to food retail
  • Regulation of food production
  • Well-established, big companies as strong gatekeepers
  • Reluctance of German population to shop for groceries online

Relevant trade fairs

Networks and associations: Agriculture and agri-food

3.2 Consumer products: E-commerce to be enhanced

Key facts:

Consumer products refer to physical products designed for final consumption and mid-to long-term use. Hence, demand for consumer products in Germany profits from macroeconomic growth and increased per capita income. In Germany, major consumer product business sectors are clothing and shoes, cosmetics and furniture.

High level of clothing and shoe exports from Germany

Germany holds 45 percent of the global market for technical textiles. It is the fifth largest exporter of clothing and textiles worldwide and the largest market in Europe (cf. Federal Statistical Office 2019; GTAI 2019).Textile and leather products generated sales of 45 billion euros in 2018. Seventy-four percent of total production is produced for private consumption while 26 percent serves other industries (cf. textil+mode 2018). Hence, the German textile industry is part of national and global value chains. Generally, the German textile industry has been affected by structural change resulting in firms outsourcing manufacturing.

Despite online shopping still accounting for only 15 percent of total clothing sales in Germany, it has seen a remarkable increase. In 2017, clothing and garments accounted for a third of total German e-commerce (cf. textil+mode 2018). However, the degree of market competition is especially high. Additionally, there are large companies involved in online shopping, both international ones such as Amazon or SHEIN and domestic operations such as Zalando and ASOS. Despite this, most enterprises are small or medium-sized, making up almost 99 percent of the total 1,400 businesses in the textile industry (cf. textil+mode 2018). The textile industry employs 135,000 people, 54.3 percent of the workforce being female (cf. IAB 2018).

Profiting from general trends such as individualization and the aging population, both of which are inspiring new products and designs, the textile industry offers a wide range of business prospects, among others with sustainable and bio-degradable, tailor-made products. Affordable styles are popular and synergies with other business fields such as creative industries and cleantech are being established (cf. textil+mode 2018).

Growing market for cosmetics

Cosmetics refer to products for specialized beauty as well as general body care. The cosmetic industry in Germany grew about 5 percent annually from 2013 to 2018, accounting for a market volume of 13.8 billion euros in 2018 (cf. IKW 2018). Despite the most common channels for sales still being drugstores and perfumeries, the industry is influenced by digital technologies and online shops, which are changing its business environment. Indeed, due to the popularity of tutorials and peer advice on online and social media channels, consumers’ awareness of beauty trends is increasing along with general demand. This digitalization is also visible in market structures. Traditionally, a few international companies such as the US Procter & Gamble, French L’Oréal, UK-Dutch Unilever and German Beiersdorf have dominated the market in terms of turnover (altogether 37 percent in 2017) (cf. IKW 2018). On the other hand, the industry is highly fragmented and majorly comprised of SMEs. Consistent with EU regulations, cosmetics have been cruelty-free since 1997. A growing awareness of sustainability is opening niches for new businesses. Trends can be found in natural and do-it-yourself cosmetics as well as anti-aging and individually tailored products (cf. IKW 2018).

Specialized companies in the furniture industry

The furniture industry in Germany employed 139,207 people (only about 3.5 percent female) while generating nearly 30 billion euros in revenue in 2017 (cf. Federal Statistical Office 2019). Growth rates in Germany have been positive over past decades in both production (plus 2 percent) and shipping (plus 1.5 percent). This positive development is helped by a generally good economic situation in Germany. Essentially, the market is highly specialized, with companies focusing on either production or shipping and often on only one product segment e.g. kitchen equipment. Furthermore, the furniture industry is highly fragmented with large companies accounting for only one third of total sales. Among consumer products, furniture is the only business segment where sales mostly take place in stationary (brick-and-mortar) shops. Additionally, tailor-made and premium products provide niches for new businesses (cf. Federal Statistical Office 2019; GTAI 2019).

Potential of the market: Consumer goods in Germany
ProspectsChallenges
  • Germany’s strong position on the global textile market
  • E-commerce
  • Population aging, awareness of sustainability, individual tailoring of products and digital technologies generally unlock market potential for a variety of consumer products
  • High level of competition due to online and international competitors

Relevant event

German Retail Congress (November 20 to 21, 2020): Annual congress for the German retail industry and its partners

Helpful links

3.3 Professional services: Growing demand

Key facts:

Professional services are defined as all businesses involving transactions of non-physical goods. With the exception of highly regulated public administration, banking, tax consultation and auditing, major business fields in Germany are realty and housing as well as corporate consulting and health services. The industry of professional services is among the most prominent fields for entrepreneurship and accounted for 63 percent of newly launched enterprises in Germany as of 2018 (cf. KfW 2018).

Realty and housing – dynamic service sectors

The realty and housing industry is one of the most dynamic service sectors in Germany. The gross value added of this sector grew 2 percent annually on average from 2008 to 2018. In 2018, it accounted for 10.7 percent of gross value added and 9.5 percent of employees in Germany. Women make up about half of staff, but only 15.2 percent of them are in leading positions. Only 7 percent of all companies are large enterprises, with small and one-person businesses dominating the sector with a share of 80.4 percent (cf. Federal Statistical Office 2019).

General trends of demography and income are important market drivers for the realty and housing market. In Germany there are distinct regional disparities regarding population growth. On the one hand there are many significant growth regions in mainly urban and suburban areas, while on the other many rural areas are fighting against depopulation. Hence, development perspectives for realty and housing vary between German regions, largely depending on economic and demographic developments.

Corporate consulting – service sector with high growth rates

Corporate consulting comprises advisory and planning services for companies in various fields, from human resources and marketing to general organization structuring, business strategy and entrepreneurship. It is one of the fastest growing German service sectors. The turnover was 31.5 billion euros in 2017, representing an increase of 8.5 percent over the previous year (cf. BDU 2017). 65 percent of corporate consulting employees are female. Traditionally, the profession of consulting does not require a special qualification and so anyone with specialized skills and innovative ideas can enter the market. Consequently, a high degree of competition and demand for innovation are prominent within the sector. Additionally, reputation and networking are essential elements for business success. However, the growing demand for expertise, especially related to trends in digitalization, provides good market prospects (cf. BDU 2017). Generally, intercultural and language skills are important competencies for corporate consulting, e.g. in diversity management or in developing strategies for entering new markets abroad.

Health services – growing demand and opportunities

Given a well-established public health system and mandatory health insurance, people in Germany are generally well provided for with healthcare services. With gross value added of 350 billion euros, 12 percent of German GDP was generated by the health sector in 2017 (cf. Federal Statistical Office 2019). Professional health services accounted for 54 percent of this gross value added and 64 percent of employees in this sector. As of 2018, about 75 percent of staff in the healthcare sector were female (cf. IAB 2018). Health-related expenditure grew at an average rate of 3.7 percent per year in Germany from 2008 to 2018 (cf. Federal Statistical Office 2019). However, there are currently concerns regarding the efficiency and quality of the healthcare system, with the current system further pressured by general trends such as an aging population. An enhanced awareness of the importance of physical and mental health, positive income growth and the occurrence of new illnesses combined with still untapped potential of digital solutions increase the need for health services and new solutions. Thus, the field provides desirable prospects for new entrepreneurs aiming to satisfy a strong and growing demand by using synergies with the ICT sector, e.g. telemedicine and innovation involving the interaction of humans and technology, or specializing in naturopathy or nutrition-based health consultation services (cf. Federal Statistical Office 2019; Bavarian State Office for Statistics 2018).

Potential of the market: Professional services in Germany
ProspectsChallenges
  • Steadily increasing demand for knowledge-based services
  • Growing demand for consulting, especially regarding trends in digitalization
  • Many professional services are largely open to the entry of entrepreneurs
  • Strong linkages to other industries
  • Tailored products and market niches
  • Opportunities for (specialized) small and one-person businesses
  • Growing expenditure on healthcare
  • High degree of competition
  • High dependency on qualified staff (which is increasingly affected by labour shortages)

Event tip

Associations

3.4 Digital media and ICT: Some challenges as well as strong prospects

Key facts:

Digital media and information and communications technology (ICT) enable a wide range of business models, including video, gaming and music as well as literature and news that use modern information and communications technology, e.g. internet services, streaming and social media platforms. While women account for about half of staff in the traditional media industry, they are still under-represented in digital technologies. As of 2017 only 16.3 percent of total employees were female (cf. IAB 2018).

Strong market with growing importance and high innovation potential

A fundamental characteristic of the digital media and ICT sectors is that they are strongly interlinked with other industries, e.g. creative industries, the service sector or manufacturing. This pattern is further enhanced by the general trend of digitalization.

Consequently, ICT is one of the largest markets in Germany and Europe with strong growth potential. In Germany, about 82 percent of media and communication companies were digital and technology-based as of 2018 (cf. Federal Statistical Office 2019). In Germany, the sector employed 823,800 people and recorded sales of 140.2 billion euros. Additionally, gross value added of digital media and ICT accounts for slightly more than half of the entire communications industry (66.6 billion euros) (cf. Federal Statistical Office 2016). While consumer electronics declined annually by 2 percent from 2017 to 2018, the segments of IT services as well as hard- and software have shown stable growth rates of 2 percent per annum since 2016 (cf. Bitkom e.V. 2019).

Germany offers strong opportunities for digital companies. With the Digital Hub Initiative, the Federal Ministry for Economic Affairs and Energy (BMWi) is actively promoting digital solutions for corporations, enhancing information accessibility and strengthening excellence by the creation of digital hubs. These digital hubs can be found across the country, e.g. cybersecurity and artificial intelligence (Karlsruhe, Frankfurt/Darmstadt) or MediaTech (Potsdam). Moreover, Germany is host to key exhibitions such as Gamescom in Cologne, IFA Berlin or IT-SA for IT security in Nuremberg. These exhibitions provide good opportunities to attract new customers and financiers and provide insight into trends determined by competitors (cf. Rohr 2018). The ICT and digital media industries are characterized by specialized small businesses and large players such as the US-based Amazon, Microsoft and IBM as well as SAP and T-Mobile, which were founded in Germany (cf. Altradius 2018). Generally, digital media and ICT exhibit high levels of innovation, including cross innovations at the interface between different industries, which are of high relevance.

Growing demand

The high internet penetration rate among the German population, as well as fast product innovations and tailored packages such as payment plans differentiating between students and families, create a stable demand for digital media and ICT. Another feature of the German market is the comparably high proportion of users aged 55 years and older (cf. Kubitschke and Cullen 2010). The German Federal Association for Information Technology, Telecommunications and New Media (Bitkom) found that sales increased by 2.2 percent in 2019 compared to the previous year. The main driver of this trend is software sales, which are expected to increase by 6.1 percent in the coming years. While online gaming, video and music are growing, e-publishing is stagnating with products lacking clear buying incentives (cf. Bitkom e.V. 2019).

Fierce competition and potential for expansion of digital infrastructure

Despite strong demand, ICT is generally characterized by fierce competition and high innovation pressure. Insolvencies and payment delays increased by 1.7 percent in 2017 (cf. Altradius 2018), with this trend expected to continue. Strict legal regulation, e.g. the General Data Protection Regulation (GDPR), and a fragmented network of European digital sectors are challenges for new businesses (cf. Serentschy 2018). Moreover, rigid technical standards must be considered. Developed on the European level in 2000, Germany has since adopted the technical standards DVB and DAB for television and DHB and DAB+ for radio. Also, internet services are not yet fully available in some, especially rural, regions of Germany. Finally, general demographic trends in Germany are also having long-term effects on the industry.

A wide range of market prospects

With its pool of highly qualified staff and the degree of digitalization in enterprises not yet fully exploited, Germany is a market with high potential for ICT and digital media enterprises. Key opportunities for new businesses can be found in new technologies and methods such as artificial intelligence, virtual reality, augmented graphics and ad-based eBooks. Moreover, big data and cloud computing, cybersecurity and internet-based health services can be identified as promising avenues in the industry.

Potential of the market: Digital media and ICT in Germany
ProspectsChallenges
  • Steadily growing sector
  • Further development of digital infrastructure in Germany strengthens demand in relation to digital media and ICT
  • Wide market range and inter-industrial linkages
  • Manifold opportunities for (cross)
    innovation (with industrial as well as with service sectors)
  • Artificial intelligence, big data, virtual reality, IT security
  • High competition
  • Technical standards (EU Digital Single Market)
  • Legal regulation (e.g. General Data Protection Regulation)
  • Labour shortages

Top events

Programs and organizations

Networks for women

3.5 Creative industries: Diverse industry with growth potential

Key facts:

The term “creative industries” refers to eleven sub-markets. The creative industries cover a wide range of industries and products, from music, arts and the performing arts to books, broadcasting and movies and from architecture and design to press, advertising, gaming and software. Following the general definition, all enterprises are covered whose portfolios are cultural or creative in nature and that do not rely on public funds.

High level of self-employment

Traditionally a country of philosophers and poets, the creative industries in Germany are vibrant and dynamic. Major exhibitions are held on a regular basis, some of them receiving global recognition, such as Kassel’s documenta and the book fairs in Frankfurt am Main and Leipzig. Up to 2017 the gross value added of the creative industries grew by 4.3 percent compared to 2015 and generated a turnover of 158 billion euros, accounting for 3.1 percent of German GDP in 2017 (cf. BMWi 2017). The share of the creative industries in GDP is especially high in urban regions, e.g. in the cities of Berlin, Hamburg, Cologne and Munich.

As of 2017, about 1.7 million people were working in creative industries in Germany, including minors and self-employed individuals. About a third of the workforce were freelancers (cf. BMWi 2018). Women are especially prominent in creative industries, accounting for about 40 percent of freelancers and an equal share of regular employees. Among creative workers, innovative employment systems such as home office, co-working, office sharing and fablabs are common.

The sector is typically comprised of one-person and small enterprises (96.8 percent), totalling 254,700 companies. Moreover, the start-up ratio is slightly higher than average, demonstrating that entrepreneur and start-up culture is common in creative industries. Additionally, annual spending on innovation accounts for 3.1 percent of national levels and was 4.8 billion euros in 2016 (cf. BMWi 2017).

Some uncertainties and good opportunities

Due to this innovative culture, the outlook for the creative industries is positive. Digital technology and areas such as virtual reality, augmented graphics and streaming provide high potential for developing and enhancing cultural and creative products and services. Indeed, synergies across industries such as culture and technology can be seen in financing with crowdfunding platforms and in production levels with interface services. Creative pioneering is further fostered by government, on both local and federal levels. In Germany, creative industries are often organized in regional clusters creating opportunities for network building.

Despite the positive trends in the creative industries, they also face some challenges. A major topic is digital copyright, which is still discussed fiercely on various levels from individuals and companies to German society and government as well as European institutions and members. Another risk of significant urgency for creative industries is finding qualified staff to fill vacancies. Software and games, as well as architecture and advertising, are already facing severe difficulties in recruiting, while the least difficulties are reported by the arts, broadcasting and the press (cf. BMWi 2017). However, with the aging population and a diminishing younger population, this trend is expected to increase in the long term. By contrast, the aging of society and trends of enhanced individualization can generally be viewed as creating market potential. New target groups and niche markets are likely to appear, benefiting companies and new start-ups. Additionally, rising spending by the German population on cultural events (live events) provides potential for creative industries.

Potential of the market: Creative industries in Germany
ProspectsChallenges
  • Growing market offers manifold interlinkages with other industries
  • High start-up and innovation culture benefits from potential of digitalization for new business ideas
  • New target groups with population aging and trends of individualization
  • Increased spending on cultural events
  • High share of marginal employment (especially among freelancers and the self-employed)
  • Digital copyright still uncertain
  • Difficulties filling vacancies

Events

Helpful links

3.6 Cleantech: Market with strong SMEs

Key facts:

Cleantech describes products, processes and services that aim to increase efficiency and/or productivity by decreasing either usage of resources and energy or the creation of waste and pollution. The industry’s contribution to increasing sustainability fits well with goals and the consensus in society and politics. Major business fields of the cleantech industry are renewable energies and water and waste management, including all aspects of recycling, environmental-friendly mobility and efficiency solutions. While women only make up 19.3 percent of employees in environmental engineering, 36.7 percent of the workforce in environmental services and consulting was female in 2017 (cf. IAB 2018).

Strong domestic and global market

From a global perspective, Germany is one of the largest cleantech markets and benefits from its image as a high-quality provider of cleantech products. Additionally, the awareness in Germany of sustainability issues in relation to consumption is generally high. Clean energy is especially important with 46 percent of consumers having used clean energy and a majority of 64 percent indicating an increased willingness to do so as of 2016 (cf. UBA 2017). The German cleantech industry has a 14 percent share of the global market and accounts for 15 percent of German GDP (2016) (cf. BMU 2018a). Furthermore, cleantech benefits from several tax breaks and subsidies and is strongly involved in investments in research and development. The industry is male-dominated, only 23 percent of employees being women in 2017 (IAB 2018). Today, about 1.5 million people are employed by cleantech companies. The industry is largely compromised of small and medium-sized businesses (SMEs). However, large players such as Siemens also play a vital role in the market (cf. Fazit GmbH 2019; UBA 2018). 

Germany’s Energiewende, its transition toward more renewables, offers both challenges and opportunities. While moving away from energy production from fossil and nuclear fuels paved the way for an increasing share of renewable energies in the electricity sector, there is some friction over energy storage and transportation. Nevertheless, considerable opportunities for growth exist in these sectors. As well, there is a strong push for increasing e-mobility, although current figures for the use of such vehicles are extremely low (cf. UBA 2018).

Digitalization and waste management as major market gaps

Digital technologies further enhance the performance of companies in the sector. Business is already well equipped in terms of environment-friendly power generation and distribution as well as energy efficiency. By contrast, sustainable mobility and water management are still in the process of being established. Furthermore, material efficiency as well as waste management and recycling show the lowest rates of digital readiness. Indeed, enhancing water quality, especially by addressing contamination by nitrates and phosphates, is a target still to be met by the German economy (cf. BMU 2018a). Additionally, waste management is under regular scrutiny in Germany. While waste from mineral extraction and construction has decreased, household as well as production and commercial waste have remained fairly constant with slight increases in recent years (cf. BMU 2018b). One possible market gap can be identified in innovative business models addressing waste management, the reduction of commercial and private consumption and the expansion of re- and upcycling. A similar picture can be seen in the area of e-mobility. Generally, environmentally friendly mobility has a long tradition in Germany with the government promoting public transport and biking and incentivizing e-cars, although the reality is that German transportation is still largely based on fossil fuels. Investment and research in the field of e-mobility are supported by politics and companies, providing a good basis for new businesses (cf. Buchmann 2017).

Potential of the market: Cleantech in Germany
ProspectsChallenges
  • Leading market with high growth rate
  • Diversified market structure with a high share of SMEs but also some large com-panies
  • Potential due to the German energy tran-sition (tax breaks, subsidies, investments in research and development)
  • Water management
  • Waste management, especially private and commercial waste
  • Material efficiency
  • Innovative business models addressing re- and upcycling
  • Reinforced application of digital technol-ogies
  • Long time horizon until investments pay off for new technologies related to cleantech

Networks

Ecosummit: Network that accelerates green start-ups, investors and corporates

Green Alley Award: Network for green start-ups

4 | Doing business in Germany

Good news: You do not need a visa as a Canadian to enter Germany and you can stay for up to 90 days in any 180-day period from the date of first entry. However, if you intend to stay for a longer period or to work in Germany, you must get a visa, which you can apply for after initial entry. In order to do business (or start a business) in Germany, further administrative steps are required.

Check list: How to start a business in Germany

If you want to stay in Germany after your visa expires, you must …

1. Register your address

Anmeldung

Meldebescheinigung

2. Apply for a residence permit

Aufenthaltserlaubnis

3. Register your business

Gewerbeanmeldung

It is recommended – and certain forms of business require you – to consult a tax advisor.

More details can be found here: Investment Guide to Germany.

Business etiquette in Germany

You may have heard about Germans being punctual, precise and reliable, maybe even stiff or humourless. Although these qualities are rather stereotypical and do not necessarily reflect reality, they are based on certain cultural standards that determine the behaviour of Germans. These qualities should be kept in mind when working here. Here are some basic guidelines:

Be on time – It’s true: Being on time and sticking to schedules and topics really does matter in Germany. Showing up even five or ten minutes late to a meeting is considered rude.

Shake hands and make eye contactIn Germany, a firm and short handshake is the most typical greeting. You should make eye contact with your counterpart as it is considered friendly and honest to look at someone directly rather than to look off to the side.

Communicate directlyGermans are quite direct and open when speaking, and they will appreciate it if you also express yourself clearly.

Value of structures and rulesIn German business, there are many rules, regulations, procedures and processes. Many German business people prefer contracts and written agreements over verbal agreements.

Dress appropriatelyGenerally, business dress is understated, formal and conservative in Germany. For women, that usually means a jacket-and-skirt combination or a trouser suit. Start-ups, for example, use a more casual dress code – jeans and T-shirt are fine.

Advice for female entrepreneursGerman business is male-dominated: The percentage of female managers in the German small and medium-sized enterprises sector is around 15 percent. The self-employment rate among women is 7 percent – only half the figure for men. Therefore, a female entrepreneur in Germany is still an exception, in certain industries even rare. Although this is changing, you should be aware of these circumstances. Don’t be discouraged.

As in Canada, work culture varies from industry to industry, from city to city and from office to office. In general, it is best to start a business relationship in a formal and professional manner and then become more casual and personal over time if that seems to be usual among your customers or clients, partners or service providers.

You can find more detailed tips here on the Federal Government Website.

Female Founders Speak: Top 3 tips for Canadian women coming to Germany

We spoke to Sandra Gundermann, a Canadian citizen who has lived in Germany since 2000. She started as a legal adviser in a law firm in Germany and is currently working for a sport equipment company.

# 1 Take a six-month intensive German language course

“Unfortunately, I learnt that the language barrier is extremely high; a lot of information you need to start and run your business is available only in German. That is why I attended a six-month intensive language course to learn German and I recommend every woman to do the same.”

Img de Sandra Gundermann

# 2 Join international women networks

“You are not alone. There are other women in similar situations. Knowing this and talking with other women about the challenges one faces, gave me strength and really encouraged me. I joined the International Women’s Club, an organization bringing together women from all over the world.”

#3 Stand tall as a woman

“Although things are changing in Germany, compared to Canada, it is still a "man's world" when it comes to business. You should be prepared for this, but do not feel intimidated by it.”

5 | Funding and other resources

Although information on the following websites is provided in German only, it might be helpful with a translation tool. You can also search for contact email addresses or forms (“Kontakt” or “Kontaktformular”) and ask for a person with English language skills.

Funding opportunities

General:

Agriculture and agri-food:

Professional services:

Other resources

Upcoming events for (female) founders:

 

Networks for businesswomen in Germany you need to know


Digital media and information and communications technology (ICT) networks for women

 

Professional services


Cleantech

Grüne Startups: Platform for start-ups in the field of sustainability and green innovations

6 | List of references

General

KfW Bankengruppe (Kfw) (2018): KfW-Gründungsmonitor 2018 - Gründungstätigkeit weiter im Tief, aber Wachstum, Innovation und Digitales gewinnen an Bedeutung, Frankfurt am Main.

The Comprehensive Economic and Trade Agreement (CETA) is a free-trade agreement between Canada, the European Union and its Member States. It has been provisionally applied and the treaty has eliminated 98% of the tariffs between Canada and the EU. The negotiations were concluded in August 2014: https://www.international.gc.ca/gac-amc/campaign-campagne/ceta-aecg/index.aspx?lang=eng

Germany: An overview

Federal Statistical Office (2019): https://www.destatis.de.

KfW Bankengruppe (Kfw) (2018): KfW-Gründungsmonitor 2018 - Gründungstätigkeit weiter im Tief, aber Wachstum, Innovation und Digitales gewinnen an Bedeutung, Frankfurt am Main.

The German economy

Eurostat (2019): https://ec.europa.eu/eurostat/de/data/database.

Federal Statistical Office (2019): https://www.destatis.de.

Federal Employment Agency (2018): Sozialversicherungspflichtig Beschäftigte nach Wirtschaftszweigen, Nürnberg.

Federal Employment Agency (2019): https://www.arbeitsagentur.de/presse/spr-2019-2-jahresruckblick-2018-arbeitsmarkt-entwickelte-sich-weiter-sehr-gut.

Deutsche Bundesbank (2018): Perspektiven der deutschen Wirtschaft – Gesamtwirtschaftliche Vorausschätzungen für die Jahre 2019 und 2020 mit einem Ausblick auf das Jahr 2021, Deutsche Bundesbank Monatsbericht Dezember 2018, Frankfurt.

Agriculture and agri-food

Bundesministerium für Ernährung und Landwirtschaft (BMEL) (2018): Landwirtschaft verstehen. Fakten und Hintergründe. Edited by Federal Ministry of Food and Agriculture (BMEL). Available online at https://www.bmel.de/ SharedDocs/Downloads/Broschueren/Landwirtschaftverstehen.pdf?__blob=publicationFile, updated in July 2018, checked on 2/28/2019.

Bundesministerium für Wirtschaft und Energie (BMWi) (2019): Lebensmittelindustrie. Edited by Federal Ministry for Economic Affairs and Energy. Available online at https://www.bmwi.de/Redaktion/DE/Artikel/Branchenfokus/ Industrie/branchenfokus-lebensmittelindustrie.html, updated in 2019, checked on 2/25/2019.

EHI Retail Institute (2017): Lebensmittelhandel. Available online at https://www.handels-daten.de/branchen/ lebensmittelhandel, updated in 2017, checked on 2/28/2019.

Institut für Arbeitsmarkt- und Berufsforschung (IAB) (2018): Berufe im Spiegel der Statistik. Edited by Institute for Employment Research (IAB). Available online at http://bisds.iab.de, updated in 2018, checked on 3/5/2019.

Lebensmittelzeitung (2018): Ranking: Die Top 30 Lebensmittelhandel Deutschland 2018. Edited by Lebensmittelzeitung. Available online at https://www.lebensmittelzeitung. net/handel/ Ranking-Top-30-Lebensmittelhandel-Deutschland-2018-134606, updated on 3/15/2018, checked on 2/25/2019.

Consumer products

Federal Statistical Office (2019): Germany in Data. Edited by Federal Statistical Office. Available online at https://www-genesis.destatis.de/genesis/online, updated in 2019, checked on 3/5/2019.

Germany Trade and Invest GTAI (2019): Consumer Markets and Retail Landscapes. Large markets, big opportunities. Edited by Germany Trade and Invest (GTAI). Available online at https://www.gtai.de/GTAI/Navigation/EN/Invest/Industries/Consumer-industries/consumer-markets-retail.html, updated in 2019, checked on 3/5/2019.

Institut für Arbeitsmarkt- und Berufsforschung (IAB) (2018): Berufe im Spiegel der Statistik. Edited by Institute for Employment Research (IAB). Available online at http://bisds.iab.de, updated in 2018, checked on 3/5/2019.

Industrieverband Körperpflege- und Waschmittel e.V. (IKW) (2018): Market Data. Edited by The German Cosmetic, Toiletry, Perfumery and Detergent Association (IKW). Available online at https://www.ikw.org/ikw-english/market-data/, updated in 2018.

Verband der Textil- und Bekleidungsindustrie e.V. (textil+mode) (2018): Mit jeder Faser intelligent. Die deutsche Textil- und Modeindustrie 2017. Edited by textil+mode - Association of fashion buisnesses. Available online at https://www.verband-textil-bekleidung.de/fileadmin/Daten/Rundschreiben-Wirtschaft/RS-2017-Wirtschaftspolitik/zahlen2017_web.pdf, updated in 2018, checked on 3/11/2019.

Professional services

Bavarian State Office for Statistics (2018): Gesundheitsökonomische Gesamtrechnung der Länder. Gesundheitspersonalrechung, Gesundheitsausgabenrechnung, Wertschöpfungs-Erwerbs-tätigen-Ansatz. Available online at http://www.statistiknetzwerk.bayern.de/mam /the-men/statistiktage/gesundheit/schaumburg_ggrdl_fg.pdf,  updated on 7/20/2018, checked on 3/11/2019.

BDU (2017): Consultingwirtschaft Deutschland. Edited by Federal Association of German Management Consultants (BDU). Available online at https://www.bdu.de/der-bdu/unsere-branche/consultingwirtschaft-deutschland/, updated in 2017, checked on 3/11/2019.

Federal Statistical Office (2019): Germany in Data. Edited by Federal Statistical Office. Available online at https://www-genesis.destatis.de/genesis/online, updated in 2019, checked on 3/5/2019.

Institut für Arbeitsmarkt- und Berufsforschung (IAB) (2018): Berufe im Spiegel der Statistik. Edited by Institute for Employment Research (IAB). Available online at http://bisds.iab.de, updated in 2018, checked on 3/5/2019.

KfW Bankengruppe (Kfw) (2018): KfW-Gründungsmonitor 2018 - Gründungstätigkeit weiter im Tief, aber Wachstum, Innovation und Digitales gewinnen an Bedeutung, Frankfurt am Main.

Digital Media and ICT

Altradius, N.V. (2018): Market Monitor ICT Germany 2018. Edited by Altradius N.V. Available online at https://atradius.de/publikation/market-monitor-ict-germany-2018.html, updated on 6/12/2018, checked on 2/18/2019.

Bitkom e.V. (2019): ITK-Märkte. With assistance of Veronique Stübingner. Edited by German Federal Association for Information Technology, Telecommunications and New Media (Bitkom e.V.). Available online at https://www.bitkom.org/Marktdaten/ITK-Konjunktur/ITK-Markt-Deutschland.html, updated in January 2019, checked on 2/18/2019.

Federal Statistical Office (2016): Information and communications technologies. Edited by Federal Statistical Office. Available online at https://www.destatis.de/EN/FactsFigures/ NationalEconomyEnvironment/EnterprisesCrafts/ICTEnterprises/ICTEnterprises.html/Tabellen/IKTB_03_UnternehmenTaetigeUmsatzInvestitionen.html, updated in 2016, checked on 2/18/2019.

Institut für Arbeitsmarkt- und Berufsforschung (IAB) (2018): Berufe im Spiegel der Statistik. Edited by Institute for Employment Research (IAB). Available online at http://bisds.iab.de, updated in 2018, checked on 3/5/2019.

Kubitschke, L.; Cullen, K. (2010): ICT & Ageing. European Study on Users, Markets and Technologies. Available online at http://www.ifap.ru/library/book400.pdf, updated in January 2010, checked on 2/18/2019.

Rohr, M. (2018): Information Technologies. Edited by Germany Trade and Invest (GTAI). Available online at https://www.gtai.de/GTAI/Navigation/EN/Invest/Industries /information-technologies.html, updated in 2018, checked on 2/18/2019

Serentschy, Georg (2018): A New Regulatory Paradigm for the Digital Sector in Europe. In Intereconomics 53 (5), pp. 287–290, checked on 3/26/2019.

Creative industries

Bundesministerium für Wirtschaft und Energie (BMWi) (2017): 2017 Cultural and Creative Monitoring Report. Edited by Bundesministerium für Wirtschaft und Energie. Available online at https://www.bmwi.de/Redaktion/EN/Publikationen/monitoringbericht-kultur-kreativwirtschaft-2017.pdf?__blob=publicationFile&v=7, updated in December 2017, checked on 2/21/2019.

Cleantech

Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit(BMU) (2018a): Greentech made in Germany 2018. Facts, data, diagrams. Edited by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Available online at https://www.bmu.de/publikation/greentech-made-in-germany-2018-environmental-technology-atlas-for-germany/, updated on 3/1/2018, checked on 2/18/2019.

Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit (BMU) (2018b): Waste management in Germany 2018. Facts, data, diagrams. Edited by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Available online at https://www.bmu.de/en/publication/waste-management-in-germany-2018/, updated on 3/1/2018, checked on 2/18/2019.

Buchmann, Marius (2017): Cleantech startups: can German utilities bridge the Valley of Death? Edited by energypost.eu. Available online at https://energypost.eu/cleantech-startups-can-german-utilities-bridge-the-valley-of-death/, updated on 4/20/2017, checked on 2/18/2019.

Bundesagentur für Arbeit (2018): Die Arbeitsmarktsituation von Frauen und Männern 2017. Edited by Bundesagentur für Arbeit (Berichte: Blickpunkt Arbeitsmarkt). Available online at https://statistik.arbeitsagentur.de/Statischer-Content/Arbeitsmarktberichte/Personengruppen/generische-Publikationen/Frauen-Maenner-Arbeitsmarkt.pdf, updated in July 2018, checked on 2/25/2019.

Fazit GmbH (2019): Zukunftsbranche Greentech. Edited by Fazit GmbH, Auswärtiges Amt (Tatsachen über Deutschland). Available online at https://www.tatsachen-ueber-deutschland.de/de/rubriken/umwelt-klima/zukunftsbranche-greentech, checked on 2/18/2019.

Institut für Arbeitsmarkt- und Berufsforschung (IAB) (2018): Berufe im Spiegel der Statistik. Edited by Institute for Employment Research (IAB). Available online at http://bisds.iab.de, updated in 2018, checked on 3/5/2019.

Umweltbundesamt (UBA) (2017): Marktbeobachtungen für die Umweltpolitik. Grüne Produkte in Deutschland 2017. Edited by Federal Agency of Environment (UBA). Available online at https://www.umweltbundesamt.de/sites/default/files/medien/1410/publikationen/171206_uba_fb_gruneprodukte_bf_low.pdf, updated in October 2017, checked on 2/28/2019.

Umweltbundesamt (UBA) (2018): Indikator: Erneuerbare Energien. Edited by Umweltbundesamt. Available online at https://www.umweltbundesamt.de/indikator-erneuerbare-energien, updated on 12/18/2018, checked on 2/18/2019.

Published by

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Contact:Counsellor, Commercial | Conseiller, commerce | Botschaftsrat, Wirtschaft

Email:Deutschland.commerce@international.gc.ca

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Contact: Lisa Dust

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ETR: Economic Trends Research GbR

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Authors: Nathalie Repenning, Prof. Dr. Sven Schulze, Dr. Silvia Stiller, Dr. Mark Teuber

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