The German government has announced it will launch the WIN Initiative, a 12-billion euro funding programme which aims to keep new companies operating in Germany.

Berlin announces WIN funding for start-ups

The traffic light coalition, Germany’s state-owned investment bank the KfW and multiple private investors, including Deutsche Bank, Commerzbank and Allianz, have announced that they will launch a new funding programme for start-ups in Germany.

The “WIN” Initiative (Wachstums- und Innovationskapital für Deutschland or Development and Innovation Capital for Germany), will deliver 12 million euros for Germany-based start-ups in their infancy.

According to the Friedrich-Ebert-Stiftung, a foundation linked with but independent from Scholz’s SPD, an unlisted company which is fewer than 10 years old generally defines a start-up.

The government hopes that the new funding programme will stop companies founded in Germany from moving to competing countries, such as the United States.

“[The WIN Initiative] will further strengthen the German venture capital market and business location as a whole,” said Chancellor Olaf Scholz (SPD) in a press release published by the Federal Finance Ministry.

“[G]rowth financing is of crucial importance for innovative strength in Germany and Europe. Especially in times of shifting geopolitical power relations, strengthening our competitiveness and technological sovereignty is of central importance,” said Scholz.

Half of Berlin start-up employees are non-EU citizens

Germany, particularly Berlin, has seen a start-up boom in recent years. In March 2013, the Frankfurter Allgemeine Zeitung (FAZ) estimated that between 10.000 and 30.000 employees were working in 2.500 Berlin-based startups in 2012. 

According to figures from the Berlin Senate for Economy, Energy and Services, this had increased to 80.000 employees working for 4.500 startups by 2022.

The German capital comes second only to London among the “most popular start-up hubs in Europe 2023”. With English being increasingly used around the office, Berlin has become a hotspot for young, international people looking for work, and coming from outside of the EU too.

So much so that every second employee at a Berlin start-up in 2018 was a non-EU citizen, accounting for 30 percent of start-up employees nationwide.

German government encouraging more Betriebsräte in start-ups

But start-ups being a relatively new phenomenon in the German job market, many German unions such as ver.di or IG Metall have voiced concern about the conditions offered once new employees - who may not be familiar with German labour law - are shown their desks.

According to a paper by the Friedrich-Ebert-Stiftung, the German government wants to encourage the foundation of works councils (Betriebsräte) in start-ups.

Companies with works councils in Germany generally offer more holiday leave, higher wages and shorter working hours, and have increased productivity and correspondingly increased profits. However, currently only 38 percent of employees in Germany - in a start-up or otherwise - are Betriebsrat members.

In Berlin start-ups, there is little data on works council representation, but the German Trade Union Confederation (DGB) estimates that just 5 percent have a Betriebsrat.

Thumb image credit: Monkey Business Images / Shutterstock.com