- New proALPHA study reveals the attitudes of German SMEs toward national and European regulations
- More than half consider self-regulation more effective in achieving sustainability goals
- Transparency, planning reliability and clarity of regulations are at the top of German SMEs' wish list for politics
Weilerbach, May 14, 2024 – More self-regulation or government activism? The vast majority (68 percent) of small and mid-sized enterprises in Germany already perceive the stranglehold of national and European regulations as too restrictive. Moreover, more than half of the respondents (52 percent) are convinced that self-regulation would be more effective in reaching the sustainability goals set by politics. This preference emphasizes companies' inclination toward more pragmatic approaches rather than strict government regulations. These results are revealed by a recent study published by proALPHA, one of the leading providers of ERP+ software solutions for the mid-market manufacturing industry, on the effects of current and upcoming regulations on German SMEs and their attitudes toward them.
The study also shows that companies want more information and guidance on regulatory measures: 64 percent of the surveyed German SMEs state that the AI Act recently adopted by the European Union offers them at least a framework for a certain level of innovation and planning security, even if it is insufficient. 24 percent have no opinion on this, and only 12 percent do not agree.
In general, three out of four surveyed SMEs (72 percent) prefer more pragmatism over policy-driven moralization in favor of economic development.
"Politicians often tend to aim too high as shown by our survey with regard to the topic of sustainability and supply chains," says Michael Finkler, Head of Business Development at proALPHA. "Therefore, politicians should always ask themselves to what extent good intentions translate into actual good outcomes for both the economy and society. It's a bit like in school: if there are too many rules and regulations, there's a risk they might be disregarded for this very reason."
German SMEs' wish list for politics
The question of how politics could support companies (more) yields the following results among German SMEs:
- Greater transparency, planning reliability and clarity about future objectives, for example in terms of sustainability, supply chain and artificial intelligence (37 percent)
- Simplification of the tax system through less bureaucracy and higher flat rates (35 percent)
- Cost compensation for increased administrative effort (33 percent)
- Incentives for green investments and improved depreciation options (30 percent)
- Less regulation overall (29 percent)
- New investment incentives to make Germany a more attractive location again (29 percent)
- Involvement of SMEs in the design of regulations (28 percent)
- Resources for training employees on the regulations (27 percent)
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"An incentive system and concrete support seem to be more helpful to German SMEs than a tsunami of regulations," says Michael Finkler. "Politics should pay more attention to SMEs as they are the main drivers of economic stability and development." Michael Finkler, Head of Business Development, proALPHA |
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The complete proALPHA study "Deutscher Mittelstand im Regulierungskorsett" (roughly: "German SMEs in the Regulatory Stranglehold") can be requested here (available in German only).
