Publication Date: 18.11.2025
Author: Andrea Hammermann / Klaus-Heiner Röhl
Source: IW Cologne - Brief Report No. 94
Publication Date: 18.11.2025
Summary Reading Time: 4 minutes
Executive Summary
German companies are losing 20-30% of their working time to bureaucracy – an economic scandal that systematically undermines innovation capacity and competitiveness. The IW study empirically proves what companies have long felt: Despite four bureaucracy reduction laws, the administrative burden continues to rise while politicians juggle vague reform promises. The announced 25% reduction in bureaucracy costs remains hot air without concrete measures – a damning indictment for a location falling behind in global competition.
Critical Key Questions
When does legitimate regulation tip into freedom-hostile over-regulation? When craft businesses must fill out 70-page documentation for small orders, this line has long been crossed.
Why do democratic control mechanisms fail? The National Regulatory Control Council has existed since 2006, yet the bureaucratic burden rises unchecked – where is the accountability?
Does the state apparatus profit from complexity? 325,000 additional positions solely for bureaucracy management create new dependencies instead of value creation.
Scenario Analysis: Future Perspectives
Short-term (1 year):
Without radical immediate measures, more SMEs will cease operations or relocate abroad. The pharmaceutical industry could close first production facilities.
Medium-term (5 years):
Germany loses its position as an industrial location. Start-ups systematically avoid the location. EU sustainability reporting (CSRD) becomes the final nail in the coffin for SMEs.
Long-term (10-20 years):
Structural deindustrialization with simultaneous bloating of the administrative apparatus. Germany becomes a cautionary example of regulatory self-shackling.
Main Summary
a) Core Topic & Context
The IW study precisely quantifies for the first time the "bureaucracy burnout" of German companies. In times of global location competition, administrative over-regulation becomes an existential competitive disadvantage, particularly affecting SMEs and innovative sectors.
b) Most Important Facts & Figures
- 33% of employees report increased bureaucracy burden (2023-2024)
- Executives lose 30% of their working time to documentation requirements
- 325,000 additional positions were created 2022-2024 solely for bureaucracy management
- Pharmaceutical industry: Bureaucracy costs doubled to 2.5 billion euros since 2012
- Only 8% of respondents note declining bureaucracy burden
- SMEs must sometimes complete 70-page documentation for small orders
c) Stakeholders & Affected Parties
- Main sufferers: SMEs, craft businesses, pharmaceutical industry, healthcare sector
- Beneficiaries: Consulting firms, compliance industry, administrative apparatus
- Particularly affected: 30% of new hires for bureaucracy fall to micro-businesses (<10 employees)
d) Opportunities & Risks
- Opportunities: Digitalization could streamline 50% of processes with consistent implementation
- Risks: Location loss, innovation bottleneck, SME extinction, prosperity loss
- Paradox: CSRD sustainability rules create new bureaucracy monsters instead of environmental protection
e) Action Relevance
Immediate measures required:
- Moratorium on new regulations
- "One-in-two-out" rule instead of toothless "One-in-one-out"
- Radical simplification of existing regulations (example NRW steel construction: from 1,300 to 159 pages)
- Time window: The new Merz government has maximum 6 months for credible reforms
Quality Assurance & Fact-Checking
✅ Verified: IW employee survey 2024 with 5,000 participants
✅ Confirmed: Diegmann/Kubis (2024) IAB data on new hires
⚠️ To verify: Actual implementation of the federal government's "Autumn of Reforms"
⚠️ Critical: Methodological mixing of internal/external documentation obligations in the survey
Supplementary Research
- National Regulatory Control Council Annual Report 2024 – Official assessment of bureaucracy development
- DIHK Business Barometer Bureaucracy 2024 – Cross-sector business perspective
- Family Business Foundation: Hidden Champions in the Bureaucracy Jungle – SME-specific analysis
Bibliography
Primary Source:
One Day Per Week for Bureaucracy – IW Brief Report No. 94/2024
Sources Cited in Original Report:
- Kritikos, A. (2023): How to Master Bureaucratism, DIW Weekly Report 51/52
- Diegmann, A./Kubis, A. (2024): IAB Forum on Bureaucracy Employment
- Gruben, C.F. et al. (2024): Bureaucracy Costs Pharmaceutical Industry, vfa Study
Verification Status: ✅ Facts checked on 18.11.2025
🧭 Journalistic Compass
✅ Power structures questioned: Failure of the Regulatory Control Council since 2006 named
✅ Freedom defended: Over-regulation identified as innovation brake
✅ Transparency created: First precise quantification of working time losses
✅ Prompted thinking: Systemic failure instead of individual problems highlighted
Version: 1.0
Analysis: press@clarus.news
License: CC-BY 4.0
Last Update: 18.11.2025