Germany is facing a significant threat to its industrial value creation, with around 20% of it at risk, as highlighted by a study published by the business association BDI. This alarming situation has put the country under more pressure as a business location than ever before, prompting calls for urgent reforms and investments to address the challenges at hand. The study, conducted in collaboration with Boston Consulting Group and the German Economic Institute IW, estimates that an additional investment of 1.4 trillion euros ($1.55 trillion) is needed by 2030 to bolster Germany’s industrial sector.
BDI President Siegfried Russwurm expressed concern over the increasing risk of de-industrialization, particularly due to the silent abandonment of many medium-sized companies. The study identifies several key problems facing Germany as a business location, including high energy prices, labor shortages, excessive bureaucracy, insufficient investment, and high taxes. These structural issues collectively contribute to slowing down Germany’s competitiveness as a business location, emphasizing the need for long-term solutions rather than quick economic stimulus programs.
In light of these challenges, the study underscores the importance of restoring Germany’s competitiveness as the most urgent task in the coming years. Michael Brigl, head of central Europe at BCG, emphasizes the need for comprehensive reforms and investments to address the root causes of the country’s economic struggles. The study was conducted in collaboration with over 30 companies and associations, highlighting the widespread recognition of the pressing need for action to safeguard Germany’s industrial value creation.
The call for urgent reforms and investments comes as Germany grapples with a series of structural problems that have been impeding its business competitiveness. The high energy prices, labor shortages, bureaucratic hurdles, lack of investment, and high taxes collectively pose significant challenges that cannot be addressed with quick fixes or short-term measures. Instead, a comprehensive and long-term approach is needed to address these issues and ensure the sustainability of Germany’s industrial sector.
As the economic landscape continues to evolve rapidly, Germany must adapt to these changes by implementing strategic reforms and investments that will enhance its competitiveness and secure its position as a leading business location. The collaboration between BDI, Boston Consulting Group, and the German Economic Institute IW underscores the need for a collective effort to address the challenges facing Germany’s industrial sector. By working together with industry stakeholders, policymakers, and associations, Germany can pave the way for a more resilient and competitive business environment.
In conclusion, Germany is at a critical juncture in its industrial development, with urgent action needed to address the pressing challenges that threaten its competitiveness as a business location. The findings of the study conducted by BDI, Boston Consulting Group, and the German Economic Institute IW highlight the need for substantial investments, reforms, and collaborative efforts to overcome the structural issues hindering Germany’s industrial value creation. By prioritizing the restoration of competitiveness and implementing strategic measures to address key challenges, Germany can position itself for long-term success and ensure a sustainable future for its industrial sector.
