Improving performance and becoming more resilient despite the coronavirus crisis - this is currently on the agenda for all companies. In view of the complex situation, optimising business processes is essential. In the "Performance Improvement Strategy 2024" study, our experts use survey results to analyse which value levers are particularly relevant for companies now and in the future.
Long-term outlook remains positive
On a positive note, more than one in two of the companies surveyed (52 per cent) recognise business opportunities arising from Germany's major transformation tasks. These include, in particular, the energy transition towards renewable energies, the fundamental achievement of climate neutrality in all sectors and areas of life, the digitalisation of the economy, administration and healthcare, overcoming the challenges of an ageing society and creating the country's defence capability. They therefore want to invest in Germany over the next five years: 37 per cent of companies plan to expand their presence, while only seven per cent want to reduce it.
It is also clear that in an EU comparison, Germany remains at least in the upper midfield for the majority of location factors. The best ratings were given for the central logistical location (79 per cent rank Germany among the top 5 in the EU), the standard of living (72 per cent, a drop of nine percentage points compared to 2022) and public safety (69 per cent / minus eleven percentage points).
International investors recognise the need for action in Germany
One key finding: Germany's attractiveness is declining. The KPMG Location Index, for which 23 location factors are assessed, shows a value of just +1.2 on a scale of +10 (top of the EU comparison) to -10 (bottom of the EU comparison). This corresponds to a halving compared to the previous edition of the study in 2022.
It can also be seen that the continuous negative trend since the first edition of the study in 2018 has now intensified. The ratings between 2022 and 2024 were significantly worse than between 2018 and 2022. Germany is now only in the EU midfield in several categories - and is already below the EU average in terms of the degree of digitalisation of public administration, the availability of skilled workers and the promotion of business relocations, among other things.
As the third largest economy in the world and at the same time the EU country with by far the largest economy and population, Germany should be aiming to be at least among the top 5 in all relevant location factors in an EU comparison.
Currently, 46 per cent of the CFOs surveyed consider other countries and regions to be growing faster than Germany. They are therefore considering prioritising investments there over the next five years.
These are the biggest barriers to investment
in the next five years
Percentage of individual aspects mentioned in the survey
61 %
Excessive bureaucracy
57 %
High energy costs
44 %
Lack of digitalisation
Significant deterioration in several categories
It is striking that Germany's reputation is apparently deteriorating even in areas that were previously essential for successful location marketing. For example, only 43 per cent still see Germany as one of the five best EU locations for research and development. Two years ago, the figure was 56 per cent. Other notable negative developments:
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