What does he have? Germany business location With Venezuela? At first glance, there is little in common between one of the world’s largest economies and a socialist state. But when it comes to how resilient the economy is to change, Germany and Venezuela are tied. This is the result of the IMD World Competitiveness Center (WCC) study.
A study by a Swiss business school on the competitiveness of international locations is a slap in the face to the traffic light government. The head of WCC, Arturo Bris, also connects the weakness of business deployment with the consequences of the war in Ukraine. But the problems were also domestic, he described to the Frankfurter Allgemeine Zeitung (FAZ).
The study proves this with a survey of company executives. “The typical German CEO is much more pessimistic today than three years ago,” Bries told FAZ. According to the study, managers consider high taxes to be a particularly serious competitive disadvantage. In this area, Germany ranks only 62 out of 67 countries surveyed. Germany also lags behind when it comes to the policy framework for start-ups and bureaucracy.
Hardly any entrepreneur would consider a traffic light competent
This also affects the direct evaluation of the traffic light; only about five percent of managers believe the federal government is working competently. Only twelve percent of respondents in this country see a business-friendly environment. When it comes to overall “government effectiveness,” Germany ranks 32nd out of 67. This is a significant decline. In the early 2020s, it was still between 21st and 24th.
At the same time, Brice, the author of the research, considers the companies responsible. “Companies need to become much faster,” he warns in FAZ. Small and medium-sized companies, in particular, are still not good at integrating new, productivity-enhancing digital technologies into their business.
IMD’s research also shows that attitudes towards important issues are not particularly business-friendly. According to the research, globalization is viewed more critically in Germany than in other countries. Openness to foreign ideas is also not very anchored in German culture. And according to the assessment, competitiveness is not particularly important in the local value system.
Poor infrastructure is weighing on Germany’s economy
Germany is experiencing the biggest decline in infrastructure. within two years Economy Minister Robert Habeck (Greens) will have to sit up and take notice, especially as energy infrastructure and electricity costs perform poorly for companies.
IMD director Brice makes a bitter conclusion. “The German economy used to be extremely efficient and innovative. “Now companies and the government can no longer keep up with the changes in the world at the international level,” he told Welt. According to the overall results of the research, Germany was in sixth place ten years ago, and in 15th place two years ago.
A high level of education gives hope
They are in the top positions of the rating. Singapore two neighboring German states, Denmark and Switzerland. Also ahead of Germany for example China It is in 14th place and Saudi Arabia is in 16th place. Germany is followed by Great Britain in 28th place and France In 31st place.
But IMD also points to points that give hope that Germany can bounce back from midfield. For example, the leaders of this country value a high level of education and a qualified workforce. When it comes to research infrastructure, Germany ranks fifth, the best subfield in research. But there is a problem here as well: last year they performed two places better.
The authors of the IMD study compiled 164 statistical indicators for their evaluation, including data from the World Bank and the International Monetary Fund. The researchers also surveyed more than 6,600 executives.