Country Index For Family Businesses

For the tenth time since 2006, the Country Index for Family Businesses 2024 is comparing the local conditions for family businesses in the most important industrialised countries. In concept, the comparison of locations is orientated towards the factors that are decisive for the success of the business models of large family businesses. This sheds light on a location’s structural strengths and weaknesses that will be important in future.

Trend reversal fails to materialise

The recalculation for Germany is taking place at a point in time during which the economy as a whole is stagnating and important fields of industry are in recession. In addition, there are no signs of a gradual change for the better. In this situation, the results provide an important insight for the discussion of locations in Germany: The increasing number of negative reports from German industry cannot just be seen as a snapshot in a difficult economic environment characterised by the consequences of the energy crisis. Rather, it can be assumed that the eroding competitiveness of local conditions has contributed to the problem of formerly prosperous industrial sectors, which is currently getting worse.

A comprehensive package of reforms

In view of the imminent general election, the update of the Country Index is intended to provide information on the design of a reform package that can make Germany a more attractive investment location for family businesses again. One initial finding is that Germany as a business location can hardly be helped by selective measures such as new subsidies. A comprehensive package of reforms is needed that simultaneously mitigates the locational weaknesses in the various dimensions.
A second recommendation is that politicians need to set priorities now. The financial leeway that undoubtedly still exists should be used for areas such as education, infrastructure, digitalisation and administrative modernisation. Thirdly, in view of the previous failures in reducing bureaucracy, entire regulatory areas and laws should now be scrutinised.

Despite all the worrying findings, this report also gives cause to be optimistic: in the EU, with its socio-politically ambitious social models, it is possible to offer highly attractive local conditions. Denmark and Sweden, the two top locations ahead of Canada and the USA in the 2024 update, have shown this.