Bureaucracy is supposed to help make procedures transparent and fair for everyone and build trust in making decisions. However, it is obviously becoming more and more of a burden, especially for medium-sized companies.

Medium-sized companies name bureaucracy as their number one concern. While entire departments in large companies deal with which new legal regulations for business or, for example, permits must be complied with, medium-sized companies simply lack the human and financial resources to do so.

Although the bureaucracy index in Germany has fallen from 2012 (100) to 98.5 (2023), small and medium-sized companies feel that dealing with government offices, chambers and authorities is increasingly or very burdensome. This impression is not surprising in view of the index trend in recent years. In 2022, it was still just below the value of 97.

55 percent of family businesses state that bureaucratic costs are the biggest barrier to investment for them. Many small companies therefore do not even tackle certain projects because of the bureaucratic hurdles. Innovative projects are often affected.

But even simple projects, such as the founding of a startup or company, seem to test the patience of the founders. More than 70 percent of the founders surveyed said that forms and processes for founding a company were too complex and that requests were processed too slowly.

68 percent of entrepreneurs in Germany say they have already had very bad experiences with bureaucracy.

There is no denying that the reduction of bureaucracy needs to gain noticeable momentum, especially for small and medium-sized enterprises. Germany wants to achieve many things in the coming years and decades and remain internationally competitive. First and foremost in the areas of energy, mobility, AI and digitization. To this end, the innovative SME sector in particular needs to be relieved of bureaucracy.