According to a recent ranking by research institute ZEW, Germany as an industrial location is just 18th out of 21. This ranking is alarming; since 2020, Germany has dropped four places again.
"Our policies make the industrial location too expensive, too slow, too bureaucratic. And is often one-sidedly designed for data protection and supposed legal compliance," criticizes Bernhard Jacobs, Managing Director of the Sheet Metal Forming Industry Association (IBU).
Together with the Industrieverband Massivumformung (IMU), the Deutscher Schraubenverband (DSV) and the Verband der Deutschen Federindustrie (VDFI), the IBU is calling for better conditions for medium-sized companies to remain internationally competitive. Only in this way could Germany once again become a more attractive and productive industrial location.
High costs
Industry is affected by high energy, labor, and regulatory costs, plus taxes. Germany is far ahead in terms of electricity and gas prices, tax burden, corporate obligations, and wages.
"If the industrial companies thus disadvantaged migrate, the quality in the supply chains will drop," warns IMU Managing Director Tobias Hain. "That is why politics must now keep companies at the location. All companies!"
One-sided strategy
In order to keep companies at their locations, a middle-market-oriented industrial strategy must actually be applied. After all, SMEs - the mainstay of industry - play only a secondary role in Berlin alongside the corporate world.
"When it comes to transformation, we miss resource awareness and openness to technology," says DSV Managing Director Hans Führlbeck.
This imbalance is also evident in EU policy areas, as Michael Hagedorn, managing director of VDFI, also criticizes.
"The Commission sets targets that are factually impossible to achieve or administer."
Complicated bureaucracy
Actual investment projects are also complicated and paralyzed by bureaucratic processes. Unfortunately, this is also the case with subsidy payments, as could be seen recently with the energy price brake. Energy-intensive manufacturing companies must first overcome a mountain of hurdles and requirements before they can access the assistance.
"People want to regulate everything in a super-correct and lawsuit-proof way, instead of providing quick and practical support," Hain said.
"Corporations and international companies hardly relocate and invest in Germany when there are alternative locations. Our bureaucracy density is a location killer," adds Führlbeck.
Slow implementation
In addition to the bureaucratic hurdles, public investment also takes place at a snail's pace. Reforms that are supposed to remedy the situation are dragging on and the infrastructure is falling into disrepair. Dilapidated bridges, rails and tracks, a lack of digitization in administrations, outdated tax systems, and a lagging education infrastructure - the list is long.
"We keep pointing out to politicians the drastic consequences for manufacturing SMEs. And we will continue to do so, so that something finally moves in Germany as an industrial location," explains Bernhard Jacobs.
