Country Index for Family Businesses

Location quality is a major cause for concern

Fiscal conditions must be improved and the approval and implementation of public investment projects must be accelerated. Furthermore, a turnaround in education policy is needed to combat the shortage of skilled labour.

These are just three of the conclusions that the authors draw from the latest Country Index for Family Businesses. Published at the beginning of 2023, this is the ninth edition of the study. The first international comparison of Germany as a business location was carried out by the ZEW – Leibniz Centre for European Economic Research in Mannheim in 2006, the last one three years ago.

Interestingly, Germany finds it easier to overcome crises than other countries due to its comparatively low level of debt. But that is also the country’s only clear advantage. Otherwise, the comparison of a total of 21 industrialised countries shows that Germany can hardly keep up with the top locations in North America, Western Europe and Scandinavia.

Over a total of nearly 300 pages, the study shows in detail what disadvantages Germany has in the individual areas such as tax burden or infrastructure, and draws a clear conclusion: “The findings on Germany’s position offer considerable cause for concern.” At the same time, however, the study also provides information on how the country’s location factors can be improved. There are ways to turn things around.

The country index is calculated as a weighted average of six sub-indices: taxes, labour costs, regulation, financing, energy and the combined area of infrastructure and investment. The list is led by the United States, Canada, Sweden and Switzerland. Germany ranks 18th, four places lower than in the 2020 country index.