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Dramatic development: Companies give Germany its worst rating in 15 years

2023-12-05T13:48:52.308Z

Highlights: Dramatic development: Companies give Germany its worst rating in 15 years. Companies give the location a school grade of 3.4 - in 2020 the rating was 3.0 and in 2017 it was 2.6. 71 percent of the 2200 companies surveyed stated that a lack of skilled personnel is one of the most important brakes on their innovative strength. More and more companies are planning to move abroad - especially when it comes to research and development (R&D) In 2020, 55 percent still wanted to go abroad for innovation activities.



Status: 05.12.2023, 14:36 PM

By: Amy Walker

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A new study by the Chamber of Commerce makes people sit up and take notice: In Germany, the general conditions for companies are at an all-time low. The power of innovation is dwindling.

Berlin – The mood in the economy could hardly be worse. It hasn't really gotten going for years, and the multi-crisis has put a real damper on it. In addition, companies from all sectors complain that there is a lack of political reliability, which means that investments are not forthcoming. This is now also shown in a new study by the German Chamber of Industry and Commerce (DIHK), which was published on Monday (4 December). According to the survey, German companies rate the general conditions in Germany as worse than at any time since the beginning of the study in 2008. They give the location a school grade of 3.4 - in 2020 the rating was 3.0 and in 2017 it was still 2.6.

German companies are slowed down by bureaucracy and a shortage of skilled workers

Many companies are fully occupied with coping with the current challenges," reports DIHK Managing Director Martin Wansleben according to a statement. "They take care of the core business, they are busy complying with or implementing regulations and then they have hardly any resources left for the development of new products or services. It is imperative that we reverse this trend so that Germany can regain its traditional strengths."

According to the study, the biggest brakes on innovation are the shortage of skilled workers and bureaucracy. 71 percent of the 2200 companies surveyed stated that a lack of skilled personnel is one of the most important brakes on their innovative strength, followed by 68 percent who cited the high bureaucratic hurdles.

Innovation will be slowed down in 2023 by a shortage of skilled workers and bureaucracy. © Innovation Report DIHK 2023

In order to get a grip on the problem of skilled workers, more companies state that they will focus on the acquisition of personnel from abroad in the future. Larger companies with more than 500 employees in particular stated that they would be looking abroad more intensively in the coming year than before. However, small and medium-sized enterprises (SMEs) have limited resources to do the same, which is why half of SMEs do not plan to acquire from abroad.

Companies are thinking about moving abroad

In order to circumvent the problems with Germany as a business location, more and more companies are planning to move abroad - especially when it comes to research and development (R&D). 63 percent of large companies are planning such a step, the DIHK study shows. In 2020, 55 percent still wanted to go abroad for innovation activities. The trend is steadily decreasing with the number of employees – but even among small companies, 25 percent said they were thinking about setting up R&D abroad.

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Innovation is an important indicator of economic health. In Germany, it will reach a record low in 2023. © Science Photo Library/Imago

For DIHK boss Wansleben, politicians should recognize these signs and act quickly: "However, we need new ideas and products 'made in Germany' more urgently than ever in order to get back on our feet economically. Germany as a business location thrives on the innovative strength of its companies. If Germany is to make the leap into the future, it must now quickly send signals from politicians to research-based companies. We need innovation accelerators!"

Actually, the federal government wants to have achieved by 2025 that innovative strength in Germany represents 3.5 percent of gross domestic product. In view of the current conditions, this is difficult to imagine. In 2021, however, 3.1 percent of GDP was already invested in R&D. There is no data for 2022 yet.

Source: merkur

All news articles on 2023-12-05

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