These are alarming results from a study presented by the Federation of German Industries. Is deindustrialization occurring in Germany?
Industry sees Germany as a business location under more pressure than ever before. Around a fifth of industrial value creation in Germany is under threat, according to a study by the strategy consultancy Boston Consulting Group and the German Economic Institute on behalf of the Federation of German Industries (BDI).
BDI President Siegfried Russwurm spoke in Berlin on Tuesday of a “loud wake-up call” from industry for urgently needed changes in Germany. “The risk of deindustrialization due to the silent migration and closure of many medium-sized companies in particular is constantly increasing and has already occurred in some cases.”
It is above all the sum of structural problems that are slowing down the business location. Quick economic stimulus programs are no solution to this. Criticisms include high energy prices, complex bureaucratic reporting requirements, deficits in fiber optic expansion, the level of education and the transport infrastructure. “Political micromanagement and a lack of will to reform the market economy are paralyzing companies.”
According to the study, in order to remain internationally competitive in the future, additional private and public investments of 1.4 trillion euros are needed by 2030. A good two thirds of this is private investment, but the vast majority of it is not yet or not sufficiently incentivized.
Industrial location “at the crossroads”
Russwurm called for a “major step” to bring Germany back to the forefront of international competition and to achieve goals in the climate-friendly transformation of the economy. Germany as an industrial location is at a crossroads and years away from a decision, the study says. Germany must reinvent itself as an industrial nation.
The German economy is in the midst of a growth slump. The federal government is working on implementing a “growth initiative”. Plans include improvements to investment depreciation and research allowances. The traffic light coalition also wants to reduce bureaucracy. However, the BDI does not consider the plans to be sufficient.
Source: Stern
