Transformation Quarterly 02_2024

By Serkan Agci

There was a time when the tone in of inter­actions between politicians and industry in Germany was much more pleasant than it is today. It has been a long time since a “comrade of the bosses” (as Gerhard Schröder was called) was the Chancellor of Germany. According to Siegfried Russwurm, President of the Federation of German Industries (BDI), the current incumbent’s time in office and that of the entire “traffic light coalition” of Social Democrats, Greens and Liberal Democrats are lost years.

This type of criticism being levelled at policy­makers is not un­usual, of course, since the govern­ment cannot just act on behalf of businesses but must balance every­one’s interests. However, the tone used by the employers to attack the Chancellor and the three coalition parties is much sharper than it used to be.  

There are certainly reasons for the dis­satisfaction of the managers with the coalition govern­ment. Some examples are high energy prices, excessive bureaucracy, high taxes and duties, as well as the sluggish expansion of digital infra­structure. Accordingly, Germany comes in only 24th in the current IMD World Competitive­ness Ranking.

In turn, criticism from the business world, often backed by the media, has led to accusations from policy­makers against companies that they have missed out on trends and inter­national develop­ments, for example in the area of electric mobility, and are not innovative enough. There is some truth to these criticisms. But does it help Germany in its quest to remain an attractive location for industry when political and business leaders accuse each other in harsh terms of failures in the past and a lack of decision-making in the present?

A glance at the results of the European elections and the con­tinuously high approval ratings for the far-right AfD party shows who bene­fits most from that type of discourse. The dialogue between industry and politics that is crucial for economic success as well as social cohesion must continue in view of the enormous domestic and foreign policy challenges. It is essential to re­vive it, especially at this time. Public affairs work is fundamental in building bridges, opening doors in both directions, and developing mutual under­standing.

Compared to the back­room deals of the past, public affairs has become a largely transparent process. The German parlia­ment’s in­creasingly strict lobbying register as well as a diverse media land­scape, which has changed enormously but is still ful­filling its consti­tutional mandate of holding politicians to account, ensures that this continues to be the case. In view of the changed media environ­ment, representing the political interests of a company means taking a much broader approach than limiting oneself to the traditional discussions with members of parlia­ment and officials in ministries. In this context, the following points are important:

1. Proactive communi­cations structures must be put in place. We need to convey to our clients that it is always better to take the initiative rather than to respond to develop­ments.
2. In the context of a tightly net­worked, globally digitalised world, stake­holder engage­ment is taking on a new quality. It should be broadly based and, against the back­drop of wide­spread popular scepticism towards political and business decisions, include representatives from trade unions, non-government organisations, and community action groups wherever possible.
3. Changes at the global level, for example as a result of China’s rise as a political, economic, and military power in inter­national relation­ships as well as Russia’s war against Ukraine, require more risk prevention and resilience. It is in the interest of both politicians and businesses to establish functioning supply chains and a level playing field for all participants in the global markets.
4. Even with some negative connotations now being associated with the topic of sus­tain­ability, the fight against climate change and the waste of resources is still a very urgent task. However, these issues can only be success­fully addressed if political decisions do not lead to businesses and consumers feeling over­whelmed. It is thus also crucial to raise aware­ness of the need to implement measures for protecting the climate and the environ­ment as well as against pandemics like COVID-19.

Social change and the tech­no­logical up­heavals brought about by the digital trans­formation and artificial intelligence require dialogue between politicians and business leaders. This need is intensified by dis­information campaigns, mostly led from abroad. The fight to help Germany as a business location recover, which goes hand in hand with the fight against ever stronger right-wing extremism in Germany needs voices from both camps. This is not about trying to turn businesses into political organi­sations or, conversely, to make political decisions in the same manner as in business. Christian Kullmann, CEO of chemical company Evonik Industries, has warned that the AfD “is damaging our economy, our society, our future.” Despite all the differences of opinion that have emerged in recent times, we as a consulting firm at the interface between industry, politics and media know from experience that searching for solu­tions to­gether is always more success­ful for all stake­holders than bad­mouthing each other, especially in eco­nomically difficult times. 

Photo: iStock.com/Lutz Berlemont-Bernard