Europe❤️Startups: Why Startups are Europe’s Top Job Creators

August 21, 2019

Startups accelerate economic growth, expanding and creating jobs faster than the rest of the economy. What can the European Parliament do to enable startups to multiply their contribution to the European market.

Startups are the driving force of the European economy, creating “many more new jobs compared to other firms.” Already 4.52 Million jobs can be accounted to startups in the European market. “No one creates more opportunities for employment than startups and other young companies; they provide around 50% of all new jobs”, said Andrus Ansip, Commission Vice-President for the Digital Single Market.

Startups are boosting economic growth in Europe from early on. Startups as young as 2 ½ years already employ 12 people on average throughout Europe. And that’s just the beginning. Growth in startups accelerates even faster over time. While startups create almost 5 jobs on average in their seed stage, that number skyrockets when they scale, increasing by 500x. The right legislative environment is key for startups to scale. Testing some of Europe’s famous directives on their startup-friendliness could accelerate their success.

We’re hiring!

There is no end in sight to just how big a startup can grow. The recently published German Startup Monitor states that 1.550 startups in Germany alone are planning to hire 9.284 people within the next 12 months. The situation is similar throughout Europe. In Austria, for example, 9 out of 10 startups want to hire new people in the coming months.

The example of UK-based food delivery service Deliveroo shows how impressive job creation in startups can be. Topping the FT 1000 fastest-growing startups list, it created over 1,000 jobs in just three years. HelloFresh, a meal-kit startup founded in Germany, celebrated its fourth birthday with almost 2,000 employees in 2016. Their long list of employees range from chefs and engineers to PR and marketing experts, deliverers and even includes their own in-house photostudio and designers. Startups’ contributions to the job market are manifold. They do not just create jobs, they also enable others. Take Belgian-based ListMinut, an online platform that connects people with their local service providers for daily tasks. In France, Agorize works to connects businesses with young talents through open challenges. Job sections on websites of investors or entire portals dedicated to startup jobs are common nowadays.

Mobile first

For startups mobile apps come naturally but also established and traditional companies recognised mobile devices as the most convenient way for their users to interact and to consume. Having an app is the logical extension and often the substitute for a website. The job market behind these apps is merely 10 years old but already a major employer. Over 2.05 million Europeans work in the app economy either as developers, marketers, sales experts or designers, just to name a few. The European diversity in terms of language, habits and preferences multiplies this market and makes it an even larger labour market than the US.

These numbers should be a key motivation for policy makers and EU leaders to set the right incentives for further growth. Startups see the creation of a European Single Market as a great opportunity to create even more jobs in the future, that can service over 500 million EU citizens.

How to create right conditions?

Policy makers commonly ask what can be done to foster such high growth environments. It is important to note that startups cannot be understood as one sector or industry. It’s rather a question on how to drive innovation in any sector from agriculture over consumer goods to health and transport. An institutionalised dialogue between startups and policymakers can foster a thriving economy that continues creating jobs in Europe. The European Parliament has already shown an open ear when it comes to giving startups a voice. In the next term an Intergroup on Startups and Scaleups in the European Parliament is needed to foster an inclusive debate with our innovators and job creators.