Start ups: Potential of Public Tenders Remains Unused // Only Seven per Cent of German Start Ups Are Awarded Public Contracts

Only Seven per Cent of German Start-Ups Are Awarded Public Contracts

Public tenders are interesting for start-ups not only from a financial perspective. They build the trust of potential customers in the young business and are perceived as a quality certification.

A recent study by ZEW Mannheim analyses to what extent start-ups participate in public tenders and win them. The study revealed that eleven per cent of German start-ups have been involved in public tenders since they were founded and seven per cent were awarded at least one contract. However, the number of established companies winning a tender is more than twice as high. The study is based on a representative survey of around 5,000 start-ups in Germany which was conducted in 2022.

"Fewer start-ups than expected bid for public contracts. Compared to earlier studies, we are now seeing a significantly lower number of bidders," explains Dr. Bastian Krieger, head of ZEW Mannheim's junior research group "Co-Creation" and co-author of the study. "Start-ups could considerably benefit from the allocation of public contracts. With their often innovative products and services, start-ups have a special potential to advance the German economy in the long term. But their chance of success in tender processes tends to be small and this shows that the potential is not realised."