Around 20% of industrial value creation in Germany is under threat, according to a study published by the business association BDI on Tuesday.
Germany is under more pressure as a business location than ever before in what should be a wake-up call for urgent reforms and investments, BDI said.
Additional investment of 1.4 trillion euros ($1.55 trillion) is needed by 2030, according to the BDI study with Boston Consulting Group and the German Economic Institute IW.
“The risk of de-industrialisation due to the silent abandonment of many medium-sized companies in particular is continuously increasing and has already materialised,” BDI President Siegfried Russwurm said in Berlin.
The study – conducted in collaboration with more than 30 companies and associations – shows that the main problems of Germany as a business location are high energy prices, labour shortages, too much bureaucracy, a lack of investment and high taxes.
It is the sum of structural problems that is slowing down Germany as a business location, and quick economic stimulus programmes are not the solution, the study said.
“Restoring our competitiveness is the most urgent task of the coming years,” said Michael Brigl, head of central Europe at BCG.