The current study „German SMEs in the regulatory corset“ by proAlpha shows that German SMEs are struggling with national and international regulations. As a result, more than half of the companies surveyed are planning to relocate production abroad.
The study also shows that national and European regulations burden the German economy. According to 37 per cent of SMEs surveyed in Germany, ESG reporting and the EU Resilience Act are having a negative impact on global competitiveness. Although the EU Data Act is intended to form the basis for a strong digital European economy, among other things, one in three (34 per cent) SMEs currently fear that Germany will lose its leading position in international competition as a result of the Act - this also applies to the German Climate Protection Act with 34 per cent of respondents.
„The EU Data Act is a double-edged sword. While politicians want to drive forward the basis for data spaces and new digital business models in Europe, companies in Germany have so far primarily feared negative effects on international competition. Politicians - including in Germany - should therefore do everything in their power to continue supporting initiatives such as Manufacturing-, Gaia- or Catena-X so that companies see the added value of digital business models and data sharing - including for reporting - via federative data spaces in order to strengthen their position in international competition.“
Michael Finkler, Managing Director Business Development at proALPHA
71 per cent of the companies surveyed with up to 500 employees struggle with the fact that documentation obligations - such as ESG reporting or the supply chain - are passed on to them by large companies. The problem for smaller SMEs can be seen in supply chain regulations, for example: according to the study by proALPHA 70 per cent of SMEs in Germany lack the means and resources to control their upstream and downstream supply chains.
The study also shows that smaller companies (up to 100 employees) are particularly concerned about safety regulations. Compared to larger companies (up to 500 employees), they are more likely to agree with the statement, to relocate their production abroad due to the EU Resilience Act (27 versus 17 per cent). With regard to the KRITIS umbrella law - security issues also play a role here - more smaller than larger companies state that they are planning to relocate production abroad as a result of the law (40 versus 25 per cent).
„The results make it clear that both existing and future regulations at national and European level are challenging German SMEs in many respects - particularly in terms of growth, innovation and international competitiveness.“
Michael Finkler
Source: proAlpha
