Main motive for SMEs to invest abroad is to expand into new sales markets

The energy crisis has triggered a debate over Germany’s future viability as a business location and fuelled concerns over growing deindustrialisation. However, German SMEs’ foreign investment still indicates a low tendency to shift business activities abroad. During the 2019–2022 period, only just 1.7% of all small and medium-sized enterprises invested in other countries. Most importantly, not more than 3.8% of SMEs – roughly the same share as before the COVID-19 pandemic – plan to invest abroad in the coming years. Tapping into new sales markets – including for climate technologies and green products – is clearly their main motive. Europe remains the most important target region of SMEs’ foreign investment activities. Irrespective of any possible offshoring scenarios, significant risks to Germany’s competitiveness are emerging that need to be addressed with urgency.

Main motive for SMEs to invest abroad is to expand into new sales markets(PDF, 305 KB, accessible)