Munich-based startups, scaleups and grownups employ more than 96,000 people worldwide. These are the findings of the first “Munich Startup Employment” report by Munich Startup and Dealroom. According to the report, the companies create 38,700 jobs in the greater Munich area, another 14,300 jobs in the rest of Germany and 43,000 jobs worldwide.
The report examines not only recently founded startups, but all companies from the Munich innovation ecosystem that have started since 1990 with the aim of growing rapidly. The study is thus based on the startup definition by Paul Graham, co-founder of the Y Combinator. However, the companies are divided into several cohorts, depending on their age. This shows that 80 percent of all job-creating companies were founded after 2009, and together they provide around 23,000 jobs. Around half of these jobs are concentrated in a few industries such as transportation, health and enterprise software.
The impact of VC capital on job creation
Not surprisingly, better-funded startups are able to offer more jobs. Last year, startups that were able to collect a total of between 4 and 15 million euros had an average of 32 employees, while startups with lower funding (1 to 4 million euros) had 17 employees. Nevertheless, companies with VC funding do not dominate the labor market. Because 54 percent of all jobs come from startups without financing – which, however, is due to the fact that only about a third of all Munich startups have investors behind them.
Startups and the shortage of skilled workers
The shortage of skilled workers does not spare Munich startups either. Last year, for example, about a quarter of all job openings were in tech-intensive fields. But the area of business development also has problems finding suitable employees.
Andreea Chirilov, Talent Acquisition Team Lead at Konux, says:
“The biggest challenge is finding the right balance when hiring people for the technical department. Software and DevOps developers are in high demand. There is a limited pool of experienced developers, intense competition for talent and a high salary level. This is particularly challenging because we are looking for top-notch people who combine software with cloud computing experience, who bring new ideas to the table, take on challenges and think outside the box.”
Of course, Munich’s universities play an important role here. Because they are not only startup forges but also offer companies access to potential new employees – also from abroad, as Jerome Geyer-Klingenberg, Head of Academic Alliance at Celonis, explains:
“A significant proportion of our employees in Munich have roots abroad. Many of them came to Celonis through their studies at one of Munich’s universities.”
And further:
“As part of its Academic Alliance, Celonis cooperates with around 700 educational institutions (especially universities) worldwide. In addition, we offer many working student positions: In Munich alone, around 200 Celonis employees have a TUM background, including many former working students, who were then hired full time.”
The complete “Munich Startup Employment” report is available for download here .