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For IT freelancers, finding a job in Germany is currently difficult. A combination of inflation, economic recession and ever-increasing demands from clients are presenting more and more IT freelancers with challenges. In this situation, even experienced IT professionals face unfamiliar obstacles and have to deal with the stability and future of freelance work in the IT field.
1. Inflation and uncertainty:
Inflation of 6.2% in Germany, caused by the ongoing war in Ukraine, has far-reaching economic effects. For IT freelancers in particular, this means the need to offer their services at prices that reflect the increased costs. The general uncertainty about future developments means that companies act more cautiously and projects are awarded more hesitantly.
2. Recession at home:
Germany is already in an economic recession for the third quarter in a row, which caused the gross domestic product to shrink by 0.3%. The reluctance of companies when it comes to new projects and investments has a direct impact on the demand for IT freelancers. With shrinking project budgets, outside experts are often the first to be crossed off the list, leading to a noticeable slump in orders.
3. Increasing demands from clients:
The demands of clients have skyrocketed in recent years - a development that poses particular challenges for IT freelancers. The expectation of the "perfect solution" is increasing, which raises the hurdle for many freelancers. Those who do not meet all the required criteria have a harder time acquiring orders.
4. Challenges for startups:
The once-bubbly startup scene faces its own difficulties. The bursting of the startup bubble and difficulties in raising or follow-up funding are impacting the availability of projects once offered by burgeoning startups.
5. The Impact of Rising Interest Rates:
Increasing interest rates have created a domino effect. Companies are more reluctant to make investment decisions, which is hampering demand for IT projects. At the same time, startups are also affected by this development, as financing options are narrowing.
In this demanding phase, flexibility is of the utmost importance for IT freelancers. The ability to adapt to changing market conditions, close cooperation with clients and the targeted search for niche markets could offer ways of asserting oneself in this challenging economic situation. Continuous training and the willingness to rethink existing business models are indispensable. The freelancer community is entering a period of change where adaptability and the spirit of innovation are more important than ever.
The Hamburg economy is experiencing a veritable start-up boom, according to a recent press release from the Statistical Office North. In the first half of 2023, 2,847 new businesses were founded in the Hanseatic city - an increase of a remarkable 18 percent compared to the same period last year. This not only represents a remarkable increase, but also marks a historic high since records began in 2008.
The dynamic development on the start-up market is not only reflected in the high start-up figures, but also in a positive balance of business start-ups and closures. A total of 1,568 more businesses were founded than discontinued. This positive difference underscores the strength and attractiveness of Hamburg as a business location.
Although the reasons for the increase may be manifold, it is striking that the propensity to start a business varies across Hamburg's districts. Business startup rates range from 0.6 in the Bergedorf district to a remarkable 4.2 in Hamburg-Mitte. The situation is particularly remarkable in the district of Hamburg-Mitte, where the number of business start-ups increased by more than 60 percent within one year. This could indicate a special dynamic in this district, which is characterized by entrepreneurial innovation and economic growth.
In order for a business start-up to be recorded in the statistics, certain criteria must be met. These include, for example, the legal form of the business or the number of employees. Businesses founded by natural persons can also be included in the statistics, provided they are entered in the commercial register, employ staff or have a craftsman's card at the time of foundation. The statistics thus provide an insight into those start-ups that are particularly relevant due to their economic significance.
A look at the number of start-ups per 1,000 inhabitants shows that 1.5 businesses were founded per 1,000 people in Hamburg. This figure illustrates the breadth of start-up activity within the city.
The development of business start-ups in Hamburg in the first half of 2023 not only shows a pleasing increase, but also points to the city's vibrant and diverse business landscape. The positive development of the start-up market could lead to a further strengthening of Hamburg's economy in the coming months and years and create new opportunities for entrepreneurs.
On August 15, 2023, the CEO of the German start-up association, Miele, expressed his wish for increased political attention and improved framework conditions for the local start-up scene. The German government, he said, should give the industry more priority, particularly to promote innovative strength and future orientation. Compared to countries such as the United Kingdom, the Netherlands and France, Germany is still at a disadvantage when it comes to framework conditions for startups. Areas such as immigration of skilled workers, digitization and access to capital are better developed in other European countries.
The competition for talented professionals is particularly demanding, and German startups often lose out. The industry focuses on start-ups with innovative business ideas and great growth potential. These start-ups are characterized by young founders and employees who focus on a digital orientation from the outset. Overall, the association is calling for better support from the political side to strengthen Germany's position in the European startup competition.
From the fight against uncertainty to a possible turnaround: More startups in the first half of 2023
The past year has been a touchstone for many young companies in Germany, marked by wars, economic instability and rising interest rates. But now there are signs of a possible turnaround as startup formation picks up steam in the first half of 2023
According to a study by the German Startups Association in collaboration with industry service Startupdetector, 16 percent more companies found their way into the business world compared to the previous six months, representing nearly 1,300 startups.
The once-booming German startup scene experienced a peak period in 2021, with record levels of funding from investors. The COVID-19 pandemic acted as a catalyst for digitization in areas such as finance, food delivery and online shopping. However, the environment changed with the Russian war on Ukraine and rising interest rates and uncertainty in the economy. Investors pulled back, and many startups were forced to cut jobs.
The number of start-ups also showed a downward trend. After the record year of 2021 with almost 3,200 startups, this number dropped to 2619 in 2022. Nevertheless, the first half of 2023 shows a positive development, even if the total number of startups remains comparatively low at just under 1,300.
The tourism, mobility, food and software sectors in particular saw an increase in startups compared to previous periods. In contrast, there was less startup activity in the blockchain and cryptocurrencies sectors.
The cities of Berlin and Hamburg stood out in particular. Berlin saw a 40 percent increase in startups (262) after a decline in the previous year. This is particularly noteworthy given that Berlin had to contend with difficult financing conditions last year. Hamburg also recorded significant growth with 90 new startups. In Munich, on the other hand, the startup rate rose only slightly by two percent to 95 companies.
In terms of population, however, Munich remains the leader: in the twelve months from July 2022 to June 2023, 12.6 new start-ups were counted per 100,000 inhabitants in arithmetical terms. This is slightly higher than in Berlin with 12.3 start-ups per 100,000 inhabitants.
The optimistic signs of rising startup activity give hope that German startups can recover from the challenges of the past year and experience a new upswing.