Germany seriously lagging in global competition

Germany is falling behind in the international competition for highly qualified professionals and start-up founders, while small and medium-sized enterprises are rapidly losing their competitive edge, a study finds.

ECONOMY MARCH 23. 2023 06:44

The country has lost much of its popularity in the global competition for skilled workers and start-up founders. An evaluation by the Bertelsmann Foundation revealed that Germany has fallen from the 12th to the 15th place among the 38 countries in the Organization for Economic Cooperation and Development (OECD) since 2019. Factors such as professional opportunities, income and taxes, as well as future prospects were examined in preparing the relevant index.

The OECD index shows that New Zealand, Sweden, Switzerland, Australia and Norway are the most attractive OECD countries for highly qualified specialists. The conditions in Germany have not deteriorated since the last evaluation in 2019, but other countries have improved and thus overtaken Germany in the ranking.

The framework conditions for start-ups were examined for the OECD index for the first time in 2023. Here Canada, the US, France, Great Britain and Ireland would be the most attractive, with Germany in the 12th spot in this category. As underlying reasons, the authors of the study point to scarce career opportunities, too few talents and no tailored visas for immigrants.

„To ensure prosperity, Germany needs skilled workers, including those from abroad. The international comparison clearly shows what Germany should do to facilitate the migration of the skilled labour that is so important for our country,”

said Ralph Heck, chairman and CEO of Bertelsmann Stiftung, adding that at least, Germany is doing well in the field of higher education

As reported by V4NA, another study published earlier found that small and medium-sized enterprises in Germany are no longer able to keep apace with those in the US, Scandinavia and Western Europe. According to a study prepared by the the Leibniz Centre for European Economic Research (ZEW), Germany only ranks 18th of the 21 countries examined. In 2006, when the ZEW first conducted such a study, Germany was in 10th place in this regard, which clearly shows how far behind the country has fallen compared to its direct competitors.

“Germany’s location factors for family businesses cannot keep up with those in top locations in North America, Western Europe and Scandinavia. They are rated unfavourably in the areas of regulation, taxation and energy in particular.”

the report reads. Besides taxation, critics of the current German business environment blame the shameful figures on bureaucracy, which they compare to a bottomless well. Rainer Kirchdorfer, the president of the Foundation for Family Businesses, called for tax cuts to ease the burdens of these businesses. He told German tabloid Bild that “Germany is still one of the most expensive business locations among all OECD countries.”

“If nothing happens, the burden of bureaucracy will kill family businesses,”

he warned. Gitta Conneman, the chairwoman of an SME union, was more specific. She blamed the poor performance on the government, saying that the nuclear phase-out results in brutally high energy costs, and the bureaucratic tsunami is paralysing German companies.

“Every country is suffering from the energy crisis, but no one has failed like us, in almost every area,”

Ms Connemann added, who is also a politician in the Christian Democratic Union (CDU) party. Commenting on the study, CDU Vice President Carsten Linnemann said that

the federal government should not use the conflict in Ukraine as a scapegoat for the decline of German industry. The decline had started long before the war, he pointed out. Energy prices were not competitive even before the war in Ukraine. In this respect, war should not be used as an excuse,

the party’s vice president said, and called on the federal government to “exit crisis mode as quickly as possible”.

ECONOMY

Tags:

europe, germany, oecd