Fourth "Country Index for Family Enterprises" Published – Germany Is Only a Middle-Ranking Investment Location

Of all European countries as well as the United States, Switzerland offers the best conditions for family enterprises. Germany, in contrast, ranks only 11th among 18 countries and so takes a position in the mid-range as an investment location for family enterprises. This is the conclusion of a comparison of investment locations for family enterprises presented for the fourth time by Stiftung Familienunternehmen. The study was conducted by the Centre for European Economic Research (ZEW) on behalf of the foundation.

The "Country Index for Family Enterprises" is unique due to its focus on location factors which are important for family enterprises. Since 2006, the study has incorporated five complex indices: “Taxes”, “Labour Costs, Productivity, Human Capital”, “Regulation”, “Financing”, and “Public Infrastructure”. Moreover, the current country index is addressing “Energy Costs and Security of Energy Supply” – the recent development of this area concerns many family enterprises. The country index serves as a compass for investment decisions, that is, for the question where new jobs are created.

Taxation turns out to be one of Germany’s major weaknesses in an international comparison. Within this field Germany ranks 13th among 18 countries. Regarding labour costs, productivity, and human capital Germany only ranks 15th, improving at least by one position compared to 2010. When it comes to financing, Germany is in a significantly better position: concerning family enterprises’ access to financial capital for investments and everyday business operations, Germany ranks 7th; this is the same position as in the category for the quality of public infrastructure.

Germany’s worst position is in the area of regulation which is crucial for family enterprises. If there are too many obstacles in this area, family enterprises cannot fully exploit their strengths. Ranking 16th out of 18 included countries, Germany still belongs to the worst locations when it comes to regulation, even though it improved by one position compared to 2010.

The area of energy was analysed for the first time in the country index. Here, Germany ranks 13th, which equals a position at the bottom of the mid-ranking countries. The unfavourable ranking is particularly due to high power and energy costs. Regarding the security of energy imports, Germany obtains average results; concerning the security of electricity supply, results have been very good up to now.

For further information please contact:

PD Dr. Friedrich Heinemann, Phone: +49 (0) 621/1235-149, E-mail: heinemann@zew.de