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Cornelius Bähr / Hubertus Bardt IW-Trends No. 3 20. September 2021 Germany as a Business Location after the Grand Coalition: An Assessment Using the IW Business Location Index

The demands of digitalisation and climate protection are creating an additional need for fundamental renewal of Germany’s capital stock.

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An Assessment Using the IW Business Location Index
Cornelius Bähr / Hubertus Bardt IW-Trends No. 3 20. September 2021

Germany as a Business Location after the Grand Coalition: An Assessment Using the IW Business Location Index

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The demands of digitalisation and climate protection are creating an additional need for fundamental renewal of Germany’s capital stock.

To ensure the necessary investments are made, the country will have to offer attractive investment conditions for companies that compete on international markets. Germany currently compares well with other countries as a business location: the latest version of the IW Business Location Index ranks it 4th in the world. However, this relatively good position is not reflected in all the location factors included in the Index, and there are distinct drawbacks to investing in Germany. These are to be found particularly in costs, with not only labour and energy costs but also the tax burden being especially high. Companies in Germany also have to contend with a significantly inferior digital infrastructure and considerable red tape. Since 2013, when Germany’s two main parties formed the current government, the country’s existing weaknesses as a business location have become even more pronounced. This lack of progress, combined with significant improvements in other countries, has left Germany falling further behind and is reducing the chances of future growth. After September’s general election, the next legislative period must see location policy given higher priority. Germany needs improved investment conditions so that industry can be regenerated and secure the jobs of the future

 

 

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Download PDF
An Assessment Using the IW Business Location Index
Cornelius Bähr / Hubertus Bardt IW-Trends No. 3 20. September 2021

Germany as a Business Location after the Grand Coalition: An Assessment Using the IW Business Location Index

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An Analysis of Gatekeepers and Regulations
Jan Büchel / Christian Rusche IW-Policy Paper No. 26 7. December 2020

Competition in the Digital Economy: An Analysis of Gatekeepers and Regulations

The Digital Age saw the rise of several rapidly growing digital platforms with substantial market shares. Europe is a large target market for these globally operating platforms, although the majority of the most successful platforms come from the USA or Asia.

IW

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Michael Grömling in World Economics Journal External Publication 18. May 2020

Measuring Modern Business Investment: A Case Study for Germany

An extended concept for intangible investment does not lead to additional investment momentum in the case of Germany. This corresponds to experiences with former extension of investments in national accounts.

IW

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