Interview
, Germany as a business location – Time to make a difference

Interview with Michael Kotzbauer on the new Unternehmerperspektiven study

How do German SMEs view Germany as a business location? How can they best react to a highly disruptive environment and build on their strengths to ensure they are fit for the future? The 23rd study under Commerzbank’s Unternehmerperspektiven initiative, entitled “Germany as a business location – Time to make a difference”, seeks to answer these questions and more. We talked to Deputy CEO Michael Kotzbauer about the key findings from the study and their implications. The good news – the German Mittelstand is standing tall.

When was the study carried out? Are current national and global economic developments reflected in the interviewees’ responses?

Kotzbauer: We interviewed the respondents between mid-November 2024 and mid-February 2025, so Germany’s ‘traffic light’ coalition government had already collapsed and Donald Trump was president-elect. While many market participants were already concerned about his potential trade policy decisions, the extent of their impact was not yet fully foreseeable. With this in mind, we conducted an additional survey in April 2025 to specifically address the effects of the current US tariff policy and corresponding retaliatory measures. The end result was a well-rounded study focused on the challenges faced by, and strategic opportunities presented to, German SMEs on their home turf and in their sales markets. The study paints a positive picture on the whole – many companies are looking to the future with confidence, are aware of their strengths and trust their capabilities. In other words, they are ready to take the entrepreneurial bull by the horns.

Let’s get back to the global economic upheaval we’re seeing. How strongly are current crises affecting Germany as a business location?

Kotzbauer: Ignoring the current turbulence is not an option, especially not in Germany’s export-oriented economy. Some sectors, including their suppliers, have been hit hard, and we are doing everything we can to assist and advise them. However, in the vast majority of cases the effects of external developments can be mitigated, and fortunately German SMEs have already laid important groundwork here. Many companies are well positioned, having, for example, taken measures to diversify their sales and procurement markets, and they are now seeing the fruits of their labour. What counts most, however, is their attitude: SMEs are standing tall and not about to give up. I am truly impressed by how committed they are to developing and implementing new solutions.

Headwind or tailwind: is Germany as a business location helping businesses to thrive?

Kotzbauer: The consensus is actually the opposite. Only six years ago, during an earlier Unternehmerperspektiven study, 65 percent of respondents considered the economic and political environment in Germany to be good or very good, whereas in our current study, only 10 percent feel that positively. That needs to change. It is high time for the economy, banks and politicians to join forces and make a difference. The new coalition should now be given the chance to counteract it in a timely manner.

What is it that companies are missing?

Kotzbauer: While political uncertainty, energy costs and shortages of skilled workers were identified as serious issues, they were not perceived as the most pressing problem. Excessive red tape is by far the biggest challenge impeding stronger growth. The situation can only be fixed if decision-makers in the realms of economy and politics work hand in hand, which is why I am grateful that Boris Rhein, Minister-President of the State of Hesse, has assumed patronage of the study.

Despite all the challenges they face, SMEs remain the backbone of the German economy. Where do they draw their strength from and what makes them so resilient, even in the face of negative conditions in their home market?

Kotzbauer: SMEs do not wait for better times to appear out of thin air. They take responsibility and initiative, for example by training their staff, improving processes and creating an open corporate culture. Making financial resources available, cooperating with the scientific community and R&D institutions, establishing international partnerships and working closely with start-ups are other key steps taken.

On top of this, they build on their strengths: ensuring their employees identify strongly with the company, striving for technological excellence (it’s worth noting that Germany has many ‘hidden champions’), staying highly motivated and taking pride in what they achieve. This confidence, strong sense of ownership and focus on entrepreneurial success and the prospects that go along with it are what make German SMEs so strong and resilient.

Do the businesses have any weaknesses you are concerned about?

Kotzbauer: While our businesses are, all in all, well equipped in terms of technology and innovation management, I am concerned about the stance on artificial intelligence. 41 percent of the study respondents view AI as a driver of their economic growth – an acceptable figure. However, it is mainly larger businesses that feel this way. They are almost twice as likely to be committed to AI as smaller enterprises. About 50 percent of smaller enterprises are neither currently dealing with nor planning to address the topic of AI in the foreseeable future. That could harm their business models.

What are corporate clients expecting from their mid-market bank in the current environment and what can you do to assist them?

Kotzbauer: The businesses listed and prioritised their expectations for our products and services in the study. We are well positioned to deliver on the most frequently cited priorities: advice on subsidies, tailor-made financing offers, networking with experts and broad-based sector-specific advice.

We’re seeing that our clients’ expectations often go far beyond traditional banking services, stretching into the realms of green transformation and above all cybersecurity. When asked which areas will see increasing investment, 65 percent of the enterprises surveyed pointed to cybersecurity, which received significantly more attention than any other area. We have expanded our range of cybersecurity services and awareness-raising activities, for example by creating an online event series.

I’d like to finish up with one last overarching issue that 83 percent of respondents deem important or very important, namely that the principal bank of German SMEs should be headquartered in Germany. This message from the study was loud and clear and confirms our experience that corporate clients, for example, wish to make a credit decision in Germany. Our customer-centric approach remains key to our goal of developing customised, efficient solutions that match the individual goals and requirements of our clients. We maintain a close relationship with our clients, we have clear structures and we follow transparent decision-making processes. That's why we are the bank of choice for the German Mittelstand.

Interview, Germany as a business location – Time to make a difference