The authors of the study write that the current crisis should be seen as an opportunity to turn things around, above all to reduce crippling regulatory burdens. Tax conditions urgently need to improve. In view of the shortage of skilled workers, a real turnaround in education policy is necessary. The approval and implementation of public investment projects should be accelerated across the board.
The ZEW economic research institute in Mannheim, headed by Professor Friedrich Heinemann, regularly compiles the country index as a comparison of 21 industrialized countries on behalf of the foundation. This is the ninth time this has happened since 2006. Since then, Germany has slipped six places.
In the penultimate place for taxes
Over time, it can be seen that Germany has developed negatively in terms of taxes, regulation and infrastructure. The ratio of labor costs and productivity also shows an unfavorable trend compared to the competitors. When it comes to the tax burden for family businesses, Germany continues to rank second to last; mainly due to the inaction of the German tax policy, as Heinemann writes.
These disadvantages could not be offset by the positive trend in the financing indicator. In addition, it does not have to apply to the future. According to Heinemann, the sense for priorities and targeted help has currently fallen by the wayside. The federal budget with its ancillary budgets is no longer transparent enough. Air for future tasks can only be gained if reforms in the areas of pensions and health finally take place.
Professor Rainer Kirchdörfer, Chairman of the Foundation for Family Businesses: “Germany as an industrial location has lost dramatically in quality. The high energy prices in particular, which we can do little about, should provide an incentive to improve the other framework conditions for investments. In an international comparison in the bottom places – that’s not the field in which we belong.
In the current ranking, Germany is in 18th place, four places worse than in the previous country index from 2020. However, the countries in places 14 to 19 are very close to each other with their point values. However, there are no signs of an upward movement for Germany. Only Hungary, Spain and Italy fare worse.
Front runner USA is struggling with inflation
The ranking is led by the USA, Canada, Sweden and Switzerland. The USA shows outstanding results in the location factors of energy and regulation. But anyone who sees the USA as an unbeatably attractive location for German companies should not forget the above-average inflation there, writes Heinemann. The price and wage pressure is high in the USA. Combined with the appreciation of the dollar, this reduces the attractiveness of the location.
The Country Index is calculated as the weighted average of six sub-indices: Taxes, Labour, Regulation, Financing, Infrastructure and Investments, Energy. It can take point values between 0 and 100. Japan and Sweden showed strong improvements, Austria and the Netherlands recorded large losses.
The nonprofit Family Business Foundation is the most important sponsor of scientific research in the field of family businesses. She is the contact for politicians and the media on economic, legal and tax issues. Established in 2002, the foundation is now supported by more than 500 companies from among the larger German family businesses.
