German businesses are falling behind in future-oriented matters.
Future businesses should embrACE digital and sustainable practices. RegrettablEly, not many companies are genuinely enthusiastic about tackling these challenges. Some sectors view digital transformation as a threat.
As per research on upcoming topics like digitalization and sustainability, German firms are amongst the most reluctant, showed the "Fokus:Future" study conducted by consulting firm Kearney and the Institute of the German Economy (IW). Just one in ten is actively leading transformation, according to their findings.
"In terms of transformation progress in Germany, it's only seen as 'satisfactory'. Compared internationally, especially to China, Germany is falling behind," stated Marc Lakner, Kearney's managing director for the German-speaking region. Many companies, particularly smaller and medium-sized ones, often don't see a reason for change. However, these businesses also need to confront challenges such as demographic shifts or skilled labor shortages to boost the German economy.
To fuel a shift in perspective, better political policies are necessary, pointed out IW director Michael Hüther. "Otherwise, it will be tough to prevent the looming deindustrialization."
Only about 11% of companies fall into the vanguard of transformation, as per Kearney. The remainder is fairly evenly split between "followers" and "stragglers". Companies in the tech, energy, and pharmaceutical sectors are part of the initial group.
Resistance is strongest in traditional industries like automotive and manufacturing. Vehicle manufacturers, specifically, view digital transformation as a risk, shared Kearney manager Lakner. "There's hesitant waiting and minimal proactive action, also because there's no secure framework. Certain markets like China seem to be have already written off."
The current state of digital and sustainable transformation in Germany's economy, as highlighted by the "Fokus:Future" study, is only considered satisfactory when compared to international standards, with a significant portion of companies being reluctant to lead change. Despite this, several challenges, such as demographic shifts and skilled labor shortages, require attention from businesses to enhance the overall health of the German economy.
