Companies in Germany are preparing for increasing geopolitical challenges

Multiple crises characterise the current economic situation, but German companies continue to see themselves as well-positioned for the future. While the general optimism of companies is declining, they are showing greater sensitivity to external factors and are focusing on resilience. This is the result of this year's "Future Readiness Index" by KPMG AG Wirtschaftsprüfungsgesellschaft, in which German companies assessed their future readiness based on various criteria.

The general mood of German companies in the summer of 2022 is worse than in the last survey in 2020. In addition to the ongoing supply bottlenecks and supply chain problems, there has been growing uncertainty due to geopolitical developments since the last survey in 2020. Rising inflation, rising energy and commodity prices and general fears of recession continue to dampen optimism.

In contrast, the index dimensions "maturity" and "investment" show a contrary trend. The companies expect their current positioning to enable them to still be successful in five years. In the area of investments, the focus is shifting to growth topics and risk provisioning. The strongest increase is recorded in the investment areas "adaptation to changes due to international crises and conflicts", "adaptation to global economic changes", "adaptation to ecological changes" and "adaptation to political-regulatory changes".

The development of the war in Ukraine in February 2022 was in many ways a turning point for the German economy. To take this situation into account, the regular main survey of the "Future Readiness Index" in February and March 2022 was supplemented by a follow-up survey in July and August 2022. In this year's main survey, as in the previous two years, 601 top decision-makers such as CEOs, board members or strategy leaders from twelve key industries were interviewed, and 120 more for the follow-up survey. The index ranges from 0 (very low) to 10 (very high) and reflects four dimensions: the assessment of the general mood with regard to the future ("optimism"), the current self-assessment in business-critical factors ("maturity"), the current focus of activities and investments ("investments") and the assessment of the relevance of twelve economic megatrends ("trend sensitivity"). The basis for the trend sensitivity are the results of a comprehensive panel of 28 sector and topic experts from KPMG. The results form the "Future Readiness Index 2022", which thus reflects the German economy's assessment of its future readiness. 

• In the crisis environment of 2022, the "Future Readiness Index" remains at a high level. While the value was still at 6.4 in spring, it rises to 6.6 in summer (+0.3 points compared to 2018 and 2020). The future readiness of German companies has thus risen slightly once again, even after the increase in the 2020 pandemic year.
• The optimism of German companies drops significantly in the summer of 2022. Already in the pandemic year 2020, the general sentiment of companies had fallen from 7.1 to 6.6 points and remained at this level as of spring 2022. In the summer, the value drops by a further 0.4 points to 6.2.
• Due to geopolitical developments, companies' priorities are shifting. The focus is now on investments in adaptability to crises and change. Overall, after a slight increase in the spring (+0.1 points compared to 2018 and 2020), the "investment" dimension rises more significantly in the summer (+0.6 points compared to 2018 and 2020) as a result.
• Companies see the strongest increase in their future viability in their ability to adapt to international crises and conflicts. Sixty-three per cent of companies attest to a high or very high degree of maturity. They continue to see themselves as particularly well positioned in "serving customer needs", "positioning in the competitive environment" and their "product or service portfolio". After a minimal drop in spring 2022 (-0.1 points compared to 2020), the maturity level rises slightly again in summer (+0.2 points compared to 2020).
• Companies are becoming increasingly aware of the challenges posed by the increase in geopolitical tensions and exogenous shocks. This is illustrated by the "trend sensitivity", which rises to a value of 6.3 in summer 2022, an increase of 0.6 points compared to 2018. The top trend since the summer of the crisis year 2022 is cyber security and the increasing threat to corporate security, followed by demographic change and sustainability. 

Vor dem Hintergrund des Krieges in der Ukraine rückt das Thema Sicherheit noch stärker in den Fokus deutscher Unternehmen. Zwei Drittel (67 Prozent) schätzen Cyber Security und die zunehmende Bedrohung der Unternehmenssicherheit als große oder existenzielle Herausforderung ein. Mit einem Indexwert von 7,2 steht das Thema 2022 an der Spitze der Trends und hat seit der ersten Erhebung eine enorme Entwicklung hinter sich, denn 2018 belegte es noch Platz 8 von 12.

„Schon vor dem Krieg in der Ukraine war den Unternehmen klar, dass die Unternehmenssicherheit und insbesondere die Cyber Security in den nächsten Jahren zur Herausforderung wird. Die Covid-19-Pandemie hat die Digitalisierung in Deutschland stark beschleunigt und damit neue Angriffsmöglichkeiten für Cyberkriminalität geschaffen. Die Entwicklung der globalen Sicherheitslage hat diesen Trend beschleunigt und die Furcht vor politisch motivierten Cyberattacken verstärkt. Mit einer Verlagerung ihrer Investitionen wollen die Unternehmen dieser Entwicklung gerecht werden. Wichtig ist, dass die Unternehmen sich im Kontext steigender Energie- und Rohstoffpreise nicht dazu verleiten lassen, an der Cyber Security zu sparen“, so Mattias Schmelzer.

Despite security concerns, companies are not losing sight of the long-term trends of demographic change and sustainability. 61 per cent of companies consider demographic change and the associated changes in the world of work to be a "major" or even "existential" threat. This puts the trend in second place, closely followed by sustainability and climate protection. These topics have once again gained in importance in the summer of 2022 and are rated as "major" or "existential" challenges by 61 percent of companies.

Thomas Blees

Stv. Leiter Unternehmenskommunikation
KPMG AG Wirtschaftsprüfungsgesellschaft