Germany’s economic heart, the Mittelstand is showing signs of stress as the Germany succession crisis deepens. In the ongoing succession crisis, thousands of small and medium-sized enterprise (SME) owners are looking to retire but cannot find someone to take over. As a result, many may shut their doors permanently, threatening not only local jobs but also the overall stability of Europe’s largest economy.
Rudolf Kiessling, 62, runs a heating and ventilation business. After decades of building his company, he plans to retire but hasn’t found a clear successor. “I have a son, but he has chosen a completely different profession,” he told Reuters. “Some employees are interested, but they’re hesitant about the responsibility.”
Kiessling doesn’t face this alone. A KfW survey reveals that over 231,000 SME owners in Germany intend to close shop by year-end, marking an increase of 67,500 from last year. Demographic changes drive the trend: more than half of these owners are 55 or older, and 39% have already crossed 60.
Few younger people want—or feel equipped—to take over, leaving the Mittelstand in jeopardy. This puts more than individual firms at risk; it underscores a broader German succession crisis that could reshape the country’s economic backbone in the years ahead.
Succession Gaps Could Cripple the Economy
SMEs generate over 50% of Germany’s economic output and employ nearly 60% of its workforce. Yet many family-owned businesses face a roadblock as fewer sons and daughters step up.
A report by the Ifo Institute finds that 42% of these firms lack a family successor. Even attractive buyouts from private equity firms target only larger companies, leaving smaller businesses without a safety net—one of the root causes behind the Germany succession crisis.
Government initiatives, including the nexxt-change.org matchmaking portal and low-interest loans, have failed to reverse the trend. Experts caution that without a solid succession strategy, Germany could trigger a domino effect: firm closures, job losses, broken supply chains, and a weakened economy.
As one expert explained, succession involves more than logistics—it’s deeply personal. “For many entrepreneurs, their company feels like a body part. Selling it can feel like losing an arm,” said Holger Wassermann, a succession consultant.
Germany must go beyond policy fixes. To solve the Germany succession crisis, the country needs a cultural shift in how it views business legacy and leadership transition.
