Germany should take a leaf out of France’s approach to tech and innovation if it wants to transform its economy and secure its “future prosperity,” said Verena Pausder, chairperson of the German Startup Association, in a statement today.

The call for startups to be a higher priority on Germany’s agenda comes ahead of French President Macron’s visit to Germany today — France’s first presidential state visit to the country in 24 years.

Ahead of the visit, the German Startup Association said France and Germany — Europe’s two biggest startup hubs outside the UK — should form a strong alliance to strengthen Europe as a business location.

Pausder said Macron and Scholz should work together to advance the Capital Markets Union — a plan to create a single market for capital that could, for instance, provide businesses with more funding options at a lower cost. “Because only with attractive exit channels and a dynamic capital market will it be possible to be a strong startup location in the long term,” said Pausder. 

Germany has a lot of the ingredients to be a globally competitive startup nation, given its reputable universities and research institutions, strong industrial base and talent. The government is also focusing on solving the growth capital conundrum, having closed a €1bn fund of funds last year to invest in German and European VC.

“We now have to set the right course. Macron did that in France – in general he markets his location very confidently,” said Pausder. “German politicians can learn a lesson from this spirit – especially when it comes to attracting investments. It’s high time for ‘Choose Germany.”

Taking inspiration from La French Tech

President Macron and German Chancellor Olaf Scholz are expected to discuss European competitiveness, defence, democracy and Ukraine’s inclusion in the EU, reported Politico in its Playbook newsletter. It’s expected that Macron will call for further investment in the green transition and AI to keep pace with its global competitors, the newsletter said.

Since Macron was elected in 2017 with the promise of making the country a “startup nation”, its tech ecosystem has grown rapidly. In 2023, €107 per capita was invested in startups in France; in Germany it is only around €85 per capita, according to statistics from the German Startup Association.

The French government’s Tibi Initiative — which launched in 2019 with the aim of unlocking institutional investors’ money for VC funds — has so far succeeded in making €6bn “available for startups and innovation,” said Pausder.

She added that she is “excited to see” whether this concept will succeed in Germany with the WIN initiative — which the government announced in February this year. It is expected to unlock €3.5bn in investments from both public and private actors to provide more growth capital. 

The state of Bavaria seeks to create a Tibi initiative of its own, but on a smaller scale, to help local companies scale. 

Bavaria’s digital minister Fabian Mehring told Sifted in an interview that “Germany has a very strong border between what the state does and what businesses do” — and this mentality needs to change.

“Macron had the ambition to create a private-public partnership, and he did it in a brilliant way,” he said. “It is something Germany is not used to, and we have to change this.”