The role of the energy manager at Technotherm Heat Treatment Group, a metal heat-treatment company in Germany, has evolved to include a significant amount of paperwork and compliance with numerous laws and regulations related to energy use. The burden of bureaucracy is a common complaint among corporate executives worldwide, but it is especially prevalent in Germany, where red tape is seen as a major impediment to economic growth. Germany lags behind other European countries in the digitization of government services, requiring written forms for certain tax refunds and building permits. The time and resources spent on paperwork are felt most acutely by small and midsize businesses, which lack in-house legal departments to manage the administrative burden.
German companies spend an estimated 64 million hours every year filling out forms to feed the country’s 375 official databases. The demands of bureaucracy have become so overwhelming that even Chancellor Olaf Scholz has acknowledged the issue and proposed legislation to reduce paperwork for companies and citizens. The proposed legislation aims to save an estimated 3 billion euros annually by trimming the time companies must retain official documents and ending certain registration requirements. Small and midsize businesses, which are vital to the German economy, are disproportionately affected by the bureaucratic hurdles that hinder their growth and productivity.
The burden of bureaucracy is felt across various industries, from manufacturing to retail. A supermarket chain in Baden-Württemberg has been impacted by regulations that have led to increased food waste and inefficient practices. For example, deli workers are now required to provide detailed lists of ingredients for all items sold, leading to a more limited sandwich offering and increased food waste. Similarly, fishmongers must label each variety of fish in both German and Latin and take daily temperature readings of fish and refrigerator cases, adding to their workload and reducing efficiency.
Even efforts to digitize government services are hindered by bureaucracy, as companies navigate complex regulations and interpretations of data security laws. Setting up an online registration system for school districts required approval from five regional data protection officers, each with different interpretations of regulations. The excessive focus on compliance and paperwork detracts from more productive activities, such as innovation and growth. The Stuttgart Chamber of Commerce has taken steps to address the issue by creating a database of bureaucratic requirements and using artificial intelligence to help companies navigate the complexities of the regulatory environment.
The Chamber’s database allows companies to easily access information on reporting requirements and compliance, helping to streamline the process of meeting regulatory obligations. The goal is to ease the burden of bureaucracy and empower businesses to focus on core activities without being weighed down by administrative tasks. The tool created by the Chamber aims to highlight areas where regulations can be simplified or reduced, ultimately leading to a more efficient and productive business environment. The issue of bureaucracy in Germany is a significant challenge, but efforts are being made to address and alleviate the burden on businesses, particularly small and midsize enterprises that are essential to the country’s economy.
