Excessive bureaucracy and an overregulated, inflexible labor market are preventing a large majority of companies in the electrical and digital industries from investing more in Germany as a business location. This is the finding of the latest ZVEI Decision-Makers’ Panel. Eighty-five percent of the industry decision-makers surveyed stated that excessive bureaucracy, regulatory uncertainty, and overly long approval processes stand in the way of investment. Seventy-five percent of respondents feel held back by labor market restrictions such as overly rigid working hours or overly restrictive protection against dismissal. High location costs are another significant issue: More than half of respondents cited excessive labor costs (57 percent), high electricity and energy costs (53 percent), and high taxes and levies (53 percent).

“These survey results are a wake-up call! Our companies want to invest more; they are capable of investing; they want to move the country forward—but homegrown barriers to doing business are stifling our industry’s momentum,” says ZVEI President Daniel Hager. “If you want greater industrial strength in Germany and Europe, you have to let us do our job! Our appeal to policymakers: Free us from bureaucracy, speed up the permitting process, and finally ensure competitive electricity prices and a dynamic labor market that creates incentives for performance rather than undermining them.”

Nearly all respondents (98 percent) support increased domestic development and production of key technologies such as semiconductors and batteries. More than half (51 percent) support this goal even if it entails economic burdens. Another 46 percent favor greater domestic and European value creation, provided that the associated burdens remain within manageable limits. “The resilience of our business environment is not an abstract debate for us. We want to make Germany and Europe more sovereign and independent. Companies in the electrical and digital industries are prepared to continue taking responsibility for the business environment. But they rightly expect policymakers to set the right guidelines for this effort,” comments Hager.

Ensuring fair competitive conditions for production sites in Germany and Europe in the face of international competition is central to companies in the electrical and digital industries. To create more fairness in global competition, 60 percent of respondents call on EU trade policy to expedite anti-dumping and anti-subsidy proceedings. “Free trade must not mean that Europe naively stands by while other countries deliberately undermine fair play with massive state aid and artificial price advantages,” says Hager. “If other countries systematically distort competitive conditions, Europe must systematically counteract this—quickly and without red tape. We also need a reversal of the burden of proof in cases of obvious distortions and countervailing duties that truly offset the unfair advantage of third parties. Europe must forge alliances with like-minded partners for open and fair markets. Otherwise, we can continue to talk a lot about resilience, but at the same time lose the production capacity we absolutely need to achieve it.”

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