The United States are known for groundbreaking startups such as Google, Youtube, Apple, and Microsoft. These U.S. companies wouldn’t have started without having risk-prone leaders who took a chance with their idea. However, the culture in Germany is very risk-adverse. Under 50% of Germans think that creating a business is an attractive idea. It’s intriguing how the tolerance of risk changes with geographical location; as a result, it greatly affects business decisions. Business creation in Germany is lagging behind the United States as many German venture capitalists have a general fear of failure as they invest more selectively and expect propositions to break even within 18 months. In addition, Germany does not innovate because it focuses on the industries it excels in like the car industry resulting in a trade surplus. Even with low unemployment, why take risks? Innovation is a cost in the balance sheet that can skyrocket making it a very risky proposition. A risk-adverse environment is not the right breeding ground for innovation resulting in a lack of innovation in Germany. Overall, we can see that a country’s culture can greatly affect business decisions, like Germany, and create barriers in business start-ups and innovation.