Germany’s bureaucracy costs country USD154.3B in lost economic output
Date
11/17/2024 3:31:02 AM
(MENAFN) Germany’s excessive bureaucracy is costing the country up to €146 billion (USD154.3 billion) annually in lost economic output, according to a recent report from the Munich-based ifo Institute. A major factor contributing to this loss is the insufficient digitalization of public administration, which adds unnecessary bureaucratic burdens. The report highlights that digitalizing government services could significantly reduce these costs, improving efficiency and saving time for businesses and individuals alike.
Manfred Gossl, CEO of the Chamber of Industry and Commerce for Munich and Upper Bavaria, described the economic damage from bureaucracy as "gigantic," emphasizing the need for urgent reforms. He pointed out that companies require centralized, online access to all business-related services, along with standardized, user-friendly solutions nationwide to reduce bureaucratic inefficiencies.
Oliver Falck, director of the ifo Center for Industrial Organization and New Technologies, further stressed the scale of the problem, noting that a more streamlined, digitalized system could lead to substantial economic gains. He estimated that if Germany were to achieve a level of digitalization similar to Denmark's, it could boost the country's economic output by USD101.4 billion annually.
The report underscores the significant untapped growth potential from reducing bureaucratic inefficiencies, warning that the cost of inaction is immense when considering the benefits that could arise from embracing digital transformation in Germany’s public sector.
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