Digitalisation remains key issue for economic recovery
As in the past four years, the issue of "skilled workers/demographic development“was the biggest challenge for entrepreneurs in 2025: According to the survey, four in ten companies find it difficult to recruit qualified staff despite the current economic slowdown. At the same time, company decision-makers expect rising labour costs to become an additional burden in the future, particularly in economically challenging times.
In addition to "skills workers/demographic change", "increased competitive pressure", "igitalisation/AI" and "bureaucracy", which have topped the list of challenges for the past three years, business owners particularly in the manufacturing sector are increasingly concerned about Germany’s location conditions as a place to do business.
Improving Location Conditions: A Key Priority
According to entrepreneurs, the development of location conditions in Germany is fundamental to assessing which issues will pose challenges in the next two years: Those who expect further deterioration regard "Skills workers/Demographic Change" and "Rising competitive pressure" as particularly critical challenges. Those who expect an improvement see digital transformation as the greatest challenge.
"All the challenges cited by the surveyed business owners are closely interconnected. For the first time, we complemented the survey by analysing news data on the most frequently mentioned action areas using artificial intelligence," reports IfM researcher Dr Siegrun Brink. The analysis revealed that digital transformation and the use of digital technologies, including artificial intelligence, can be helpful reducing bureaucracy and strengthening companies’ competitiveness. While digital technologies also play an important role in addressing skills shortages, the lack of appropriately trained personnel simultaneously constrains digital transformation. Overall, the analysis indicates that policy can significantly enhance companies’ competitiveness by improving location conditions, which include not only a stable and high-performance digital infrastructure but also efficient transport, energy, and education systems.
