In a study for the Family Business Foundation, the employer-aligned IW Cologne noted a lack of “technological progress driving productivity” of the German economy, not only documented by a shortage of skilled workers, but also “too little investment in new—new machinery and equipment, and better infrastructure—which also leads to lower productivity growth.” The study has the merit of addressing the “green” aspect of bureaucracy which is usually omitted in mainstream media reports on the economy.
The IW points to the EU legislation on the mandatory “sustainability reporting” by companies. “Bureaucracy isn’t just a cost factor. It ties up labor and capital that are then unavailable for growth and innovation,” says IW researcher Christian Kestermann.
