Photo: Andreas Heddergott - LH München

Startup Study Deems Munich a Prime Location

A few weeks ago, PwC published a study on German startups. The consulting company has now presented the results from the participating Munich startups, delivering a positive impression of Munich as a location for startups.

The key finding in the assessment of Munich: German startups are doing well, and Munich startups are doing even better. In the recently published nation-wide study, an impressive 70 percent are expecting revenue growth, with three out of ten even banking on double-digit growth rates. The positive results are outdone in Munich: 82 percent of local startups in the Bavarian capital are looking to increase their revenue this year, and four out of ten are even expecting growth in the double-digits.

The industry remains a driving force in growth and employment: nine out of ten Munich startups plan to arrange investments in the next twelve months. Two out of three plan to hire additional employees and expand their staff by an average of 22 percent (nationwide: 16 percent.)

Founders happy with their location

The study credits the location and excellent infrastructure in Munich for these favorable prospects: nearly nine out of ten of the questioned Munich startups are satisfied with the climate for startups in the city. Moreover, 62 percent of those questioned rate the availability of high-speed internet in Munich as very good in comparison to a mere 46 percent across Germany. High-speed internet is not only critical for innovative, technology-driven companies, but is also a central factor when deciding on a location, reported Senior Partner at PwC Munich Eckhard Späth:

“That is why it is good for Munich to have a solid-footing in this area, and that founders are also aware of it.”

Higher education and quality of life

Another major advantage attributed to Munich in the study is its higher education environment. 20 percent of Munich startups are already collaborating with academic institutions, compared to only 16 percent at a national level.

“The knowledge transfer between Munich’s universities and young companies is working,”

said Späth:

“Intense interaction between the two is one of the major advantages offered by the Munich ecosystem, especially for technology-driven startups.”

At the same time, the universities provide a steady supply of sought-after specialists: while 29 percent of startups have difficulties finding the right employees across Germany, only 18 percent have the same problem in Munich. Nationwide, only one quarter of the startups rated the availability of qualified employees as very good, but more than a third provided the same rating in Munich. In addition to universities, the authors of the study also referred to “soft” location factors:

“The economic strength and high quality of life in Munich attract a high number of well-educated individuals,”

explained PwC expert Späth.

Are Munich entrepreneurs lone warriors?

Of course the analysis also tried to find the fly in the ointment and criticized a certain every-man-for-himself mentality: 36 percent of Munich startups indicated not having cooperation partners, which puts them eight points above the national average. Plus: 90 percent (84 percent nationwide) use their own money for financing. Only 14 percent (nationwide: 25 percent) draw on public funding.

Simon Tischer

Seit Dezember 2015 schreibt Simon Tischer für Munich Startup. Vorzugsweise berichtet er über Studien, Hintergründe und von Veranstaltungen. Er studierte Soziologie an der Ludwig-Maximilians-Universität in München.

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