Seizing Opportunities: Skilled Workers as Potential Successors in Struggling Businesses
Business Evolution - Professional Ascension as Heirs to Corporate Legacies - Dynamic Economic Shifts: Crafting Business Legacy with Experienced Workforce
Economic Minister Nicole Hoffmeister-Kraut sees a viable solution to the staffing issues plaguing industries, particularly for companies grappling with succession, in the form of skilled and experienced specialists and managers. In light of the job cuts in the sector, the CDU politician stated prior to the two-day economic ministers' conference in Stuttgart: "There are indeed possibilities in company succession."
This new opportunity could prove beneficial for workers who have been displaced from large corporations due to downsizing. "It would be reasonable to explore this option more thoroughly through regional hubs," suggested the minister, highlighting the potential for increased consideration in mediation processes. From the conference, the goal is to convey a strong message to the federal government, urging them to streamline and expedite takeover procedures.
Data from the KfW succession monitoring for Small and Medium-sized Enterprises (SMEs) in 2024 reveals that 54 percent of business owners in Germany are over 55 years old. Between 2024 and 2028, 14 percent of medium-sized companies will face succession challenges, translating to approximately 106,000 companies each year.
Fewer company takeovers in 2024 were reported in the southwest
According to the Statistical Office of the State of Baden-Württemberg, there were 5,986 company takeovers in the previous year. In contrast, in 2023, there were 6,088.
Currently, Baden-Württemberg chairs the economic ministers' conference. The southwest is advocating for various initiatives, such as promoting entrepreneurship, improving conditions for start-ups, and reducing bureaucracy to foster a favorable environment for private venture capital. The conference emphasizes the need for the federal government to address these concerns to create a conducive atmosphere for starting businesses in Germany. Moreover, the conference calls for intensifying founding activities among women to encourage greater women's participation in the business sector.
Federal Minister of Economics Katherina Reiche (CDU) will participate in the conference virtually on Thursday, despite her initial plans to attend in person.
In the context of Germany, a dynamic Mergers and Acquisitions (M&A) market is emerging due to a combination of economic and geopolitical factors, with key initiatives and policies drawn up to facilitate smoother and more efficient business transitions, particularly for medium-sized enterprises facing succession challenges. The country's M&A market is being driven by significant consolidation and transformation pressures, particularly in sectors like the automotive industry, as well as the upcoming succession wave and portfolio reviews conducted by larger companies.
Germany's policies aim to create a conducive environment for company takeovers by providing legal clarity, encouraging strategic realignments, and fostering investment opportunities. Legal frameworks and initiatives have been implemented to support the process, promising a more straightforward and accessible entry for potential investors interested in acquiring medium-sized businesses facing succession challenges.
- To address the upcoming succession challenges in medium-sized businesses across Germany, the government could implement community policies focusing on vocational training for experienced specialists and managers, preparing them for potential successor roles in struggling industries.
- In light of the shrinking M&A market in certain regions like the southwest, finance and business leaders may consider exploring alternative funding options, such as private venture capital or industry partnerships, to support the vocational training and transition of skilled workers into successful business ownership.
