Adjust the compass towards competitiveness

For the second time, the Foundation for Family Businesses has commissioned a major European survey of family-owned businesses (80 percent) and non-family-owned businesses. This time, the survey involved 2,100 business leaders across seven European countries: Germany, France, Italy, the Netherlands, Poland, Sweden and Spain.

What is the view of these companies on Europe as a market and business location, on Europe’s institutions and on topics such as artificial intelligence and the next generation of business leaders? The survey was conducted by Edelman Intelligence (see survey) in collaboration with the ifo Institute (see special analysis).

How optimistic are businesses in the seven EU countries about the future?

Looking ahead to the next 12 months, half of the respondents believe that their company will ultimately be in a better state; however, in Germany the figure is only 46 percent. If we extend the timeframe to the next five years, the level of optimism is higher: on average, 68 percent expect their company’s situation to improve.

From the respondents’ perspective, has the European Union become more attractive over the past two years?

Opinions on this are fairly evenly split between “more attractive”, “less attractive” and “neither”. What is striking is that there are more negative responses in Germany, Sweden and Poland. Nevertheless, the companies have continued to invest in the EU, including in their home countries.

What factors could boost investment in the EU in the future?

Respondents were able to choose from various options. The most frequently given answers were: lower corporate tax burden, economic growth and fewer regulatory requirements.

What share of their revenue do companies spend on compliance with laws and regulations?

In some cases, the estimates are alarmingly high. Across all seven countries, 26 percent of respondents put compliance costs at more than 7 percent of their revenue. In Germany, as many as 34 percent chose this answer. And despite all assurances that the EU is working to reduce red tape, companies are not particularly optimistic that this burden will ease anytime soon. Germany once again displays the greatest pessimism in this regard.

What measures in which areas would help to complete the European Single Market?

From the options provided, the businesses ranked simplified, largely uniform administrative procedures highest, followed by competitive and better-connected energy markets, with the latter being particularly crucial for larger companies.