The Disadvantaged Creating Advantages— integrating women and immigrants into Frankfurt’s startup scene

There may be hundreds of active startups within the region of Frankfurt, but the city is far from where they could be. According to the Startup Genome report, there is a desperate need for more startups to contribute to economic growth. But how will this be accomplished, exactly? Surprisingly, it can be accomplished through the integration of the world’s most historically disadvantaged—women and immigrants.

WOMEN

Women, as we know, have historically faced gender discrimination inside and outside of the workplace. It is prevalent, even today, that they are not provided with the same amount of opportunity to share their business ideas or advance in their careers as men are. According to the Startup Genome report, Frankfurt is falling behind in percentage of female founders by up to 7% in comparison to leading global ecosystems, such as New York City. In a 2018 BCG report written by Katie Abouzahr et al, it was shown that even though men are provided with more funding for their startups than women are, they actually produce less revenue than women by over 10 percent. In general, connecting women to startup development and ensuring an increase of contribution from women will assist in increasing the number of startups in Frankfurt’s business community.

Figure 1. The Frankfurt Startup Ecosystem Report shows that in comparison to other cities worldwide, the percentage of female startup founders is lower than median in European and North American ecosystems.

IMMIGRANTS

Frankfurt is especially recognized for has a considerable amount of diverse inhabitants, immigrating from many part of the world. Despite its high population of immigrants, 51 percent to be specific, 91 percent of technology startups in the Frankfurt region have local founders. Their share of immigrant founders from countries outside of Germany is only 9 percent in comparison to, shockingly within Germany, Berlin, with a leading 43 percent share of foreign founders. Frankfurt’s emphasis on local talent should be expanded beyond this because, according to a 2017 DW business report by Benjamin Bathke, two thirds of Germany founders say the startup landscape of the country will reap positive benefits by integrating foreigners more actively.

Figure 2. The Frankfurt Startup Ecosystem Report also showed that Frankfurt has a lower percentage of immigrant founders than the global median.

By becoming more open to including these “disadvantaged” individuals into the startup world, it will be possible to transform Frankfurt’s low startup performance into high startup performance for the purpose of creating continuous economic growth.

Citations

Abouzahr, K., Taplett, F. B., Krentz, M., & Harthorne, J. (2018, June 6). Why Women-Owned Startups Are a Better Bet. Retrieved January 7, 2018, from https://www.bcg.com/publications/2018/why-women-owned-startups-are-better-bet.aspx

Bathke, B. (2017, October 11). Insights into Germany’s startup scene | DW | 18.10.2017. Retrieved June, from http://www.dw.com/en/insights-into-germanys-startup-scene-entrepreneurship-funding-venture-capital-investing-expansion/a-40993536