The external trade environment for SMEs remains difficult. The findings of a supplementary survey to the KfW SME Panel emphasise that competition from China is a growing challenge. Many SMEs still see themselves as competitive but many businesses are less confident of being able to hold their own in global competition. Regression analyses show that SMEs with direct competitors from China and energy-intensive businesses are particularly pessimistic. At the same time, SMEs that continuously undertake research and development and introduce process innovations which promise efficiency advantages amid rising wage and energy costs are much more optimistic about the future. Despite economic-policy measures, German businesses’ competitiveness remains under great pressure but that pressure can also become a catalyst for innovation and technical progress.

The international competitive position of German SMEs is under pressure(PDF, 431 KB, accessible)

Press release