Many German companies want „Digitalisierung“, workflow automation, process improvements, they want to use AI, LLMs, but when it comes to implementing all of that, they are drowning in bureaucracy.
What Germans can do is create layers of bureaucracy.
Nobody's stopping a local mid-market manufacturer from automating workflows. Or hindering a utility company from offering a better service process.
The problem is corporate leadership.
German companies tend to be run by people who are inflexible, uninspired, and cheap. Maybe it's in the culture. Compare this to Austria, where there's a cultural flair for the dramatic (and therefore an eagerness to stand out, even if it's weird) or Switzerland where enterprises, public or private, are not afraid to place big bets.
It absolutely is. Try to open a company in Germany. Then try to do your tax. Then try to close your company.
After that, let's talk again about bureaucracy.
Oh, and the new government just announced plans that non-employeed people (freelancers, business owners, ...) are now forced to pay into national pension (with few exceptions). And don't get me started on that one. Just as an example, national pension charges based on your income. But they have a different way to calculate income than the tax office.
Let me say it in other words if it's not clear yet: If someone is practically unable to do all the above without an accountant then the bureaucracy is absolutely out of hands.
> Hire a tax advisor and accountant through a payroll
And this is exactly how you kill off lots of innovation by adding unnecessary hurdles. Tax advisors are Hella expensive and hard to contract even. I'm speaking from experience.
No offense but if that's what kills your entrepreneurial spirit it doesn't sound like it would've carried you very far. It's really not that hard if you want it. You'll need it sooner or later anyway if you want to be more than a one man show.
Like I said, you'll be facing a lot of substantially greater challenges.
The world isn't black and white like that. Some people even want to do those things on the side. And some become more than a one man show after some time and without having planned that. Not every one has (or has to have) the kind of extreme passion that you are referring to.
Sure, but if that's your reason to do that you're not being reasonable.
The point is that relative to everything else you need to get right to build a successful company in any country, taxes, payroll and accounting in Germany frankly don't even register.
Like I said, it's 1-2 days out of a year for me.
If that seems like a big hurdle, it wasn't the reason you didn't build a business.
There are challenges with building a business that are specific to Germany that actually matter.
By contrast, the concerns about bureaucracy are a tired stereotype. There's a grain of truth to them, but if they really pose a challenge to you, you didn't want to do this in the first place.
Have you also done these things in the US? I have heard this sentiment that the German system is far and above the more bureaucratic before, but for all I know, Americans could just be relatively complacent in comparison to Germans and our systems function nearly identically. I’d like to hear from someone if they have been through both processes first hand who could answer this question.
Americans constantly complain about the tax system and, like them or not in practice, a lot of US citizens on both sides of the aisle believe in one of the stated goals of DOGE (previously named the US Digital Service).
No, and in the context of the thread I care little about the US. This thread is about Germany and is specifically about "they [the companies] are drowning in bureaucracy" and "The problem is not the bureaucracy". And my post was a response to that. The US might be worse (I doubt it) but it has basically no relevance imo.
It has relevance in establishing the amount of bureaucracy relative to the largest government in the West.
I quit my last job because of bureaucracy and I’m considering moving to Germany, so as individual, it is very important to me. Thanks for explaining to me that my life and major factors in my decision are irrelevant. Very helpful.
Both can be true, and what you described is, in my opinion, one of the primary causes of insane bureaucracy in Germany. This inflexible mindset is what causes the relentless enforcement of bureaucracy and procedures in Germany, there is very little leeway here in terms of bending the rules, making exceptions, turning a blind eye. This cultural inflexibility, traditionalism and risk-aversion all ties together into a paperwork and red-tape nigthmare.
This couldn't be more incorrect. I document German bureaucracy for a living. The hardest part of my job is that every state, city, office and case worker applies the rules differently, making it really hard to predict a specific outcome. In most cases it plays in people's favour, unless the case worker is particularly grumpy and you happen to hit one of their pet peeves. I struggle to document the variance for Berlin alone.
The biggest issue with German bureaucracy is that it's largely paper-based and has little to no automation. In many cases, digitalisation when it happens just means sending documents digitally instead of delivering them during an in-person appointment. This leads to very long processing times that are constrained by available labour.
I’m familiar with your site and appreciate it a lot, and I don’t dispute anything you said, but that does not contradict anything in my comment. Those people you mention who apply the rules differently everywhere are inflexible and unwilling to give leeway or look further then their own way. This is a cultural issue in my opinion and can explain most of excessive bureaucracy here. You’re also talking specifically about the ausländerbehörde, which is one manifestation of bureaucracy here, there are many other forms.
My experience was a bit different. For example, the immigration office accepts almost all applications in the end (over 95% according to their stats). They make all sorts of exceptions in the applicants' favour. The Bürgeramt, the Ordnungsamt and the Arbeitsagentur are the same. They huff and puff and make an exception "just this time", every time. The inflexibility is an act, unless you're being difficult (from their point of view). Then you get the least charitable interpretation of their directives.
Against all expectations, German bureaucracy is very "vibes-based", specifically because it's full of humans. It's predictably unpredictable. You rarely get the downside of digitalisation where "computer says no", because a human is deciding your fate and can be convinced to give you leeway.
The bigger issue at least for me is speed. The uncertainty of human decisions is magnified by the weeks-long delays. A missing document is a big issue when bureaucracy has a 4-8 week ping. That is of course if the case worker doesn't shrug and give you what you want anyway.
I think that German bureaucrats choose the path of least resistance. Most of the time it means giving you what you ask for.
When you get the short end of the stick, a letter from your lawyer can make it abundantly clear that giving you what you want (and faster) is the path of least resistance.
This inflexible mindset is what causes the relentless enforcement of bureaucracy and procedures in Germany, there is very little leeway here in terms of bending the rules, making exceptions
This. I have worked in a Germany university and in all the supporting administration, nobody wants to make choices or take responsibility. E.g. I had some blatant cases of plagiarism and when going to the examination office (where it should be reported), they would do nothing. And when I asked whether there shouldn't be any repercussions, their answer was "there ought to be repercussions", the subtext being: but I'm not going to be the one enforcing them, because if I do and the student files a complaint, I'm going to have to defend my choice.
Or sometimes we had to order GPU servers for the department. We requested quotes from multiple companies (since we knew what we need) and would then send them to the financial administration with our preference (good price + service options). Rather than saying: LGTM, seems you did your work, they would spend four (!) weeks asking new quotes and processing them. And then they would happily come and say, "we found a cheaper option" and the cheaper option would be saving 100 Euro on a machine that cost something like 25,000 and was most likely just the natural reduction in prices in four weeks. At any rate, it is this weird mix of needing to assert themselves, following whatever rules to the letter, and not wanting to make 'bold' choices etc. Meanwhile a whole research group is under compute capacity for a month and the work of the financial department certainly cost more than 100 Euro in hourly wages.
Also, every process uses paper. Heck, once I got my tax number, to my surprise the person from the administration pulled my personnel file out of a filing cabinet!
I wish that this was just the university, but from friends that went into industry, I hear that a lot of German corporations are pretty much the same.
I've seen it described as "Germans are not efficient, they're methodical". There is a lot of truth to it, but Germans are also making all sorts of exceptions either for convenience or expediency, making the method unpredictable.
I challenge this:
How do you measure processing time?
From first customer interaction? Or from all input data are present?
I assume in most situations they are not present upfront.
Therefore it’s a tedious back and forth. Sure, that compounds with the roundtrip time.
Digitisation is a trap because it doesn’t change the paradigm to full-kit upfront necessarily. Digitisation can be a nice entry-point to this, but unfortunately digitising data does not necessarily introduce the full-kit.
The system needs to be designed in a different way:
“We guarantee processing within x hours (weekdays) from the point you’ve provided us a full-kit.”
This, in turn, requires thinking backwards from the result through all steps, resulting in a definition of what a full-kit entails. Of course this requires a different (system) thinking which is contradicted by the rigid hierarchy (and no, doing away with the hierarchy isn’t a solution either).
Work force would not be busy 80% of their time = capacity to go back and forth to figure what’s missing and switch around cases. When starting with full-kit, 80% of their wasted time becomes processing time. In turn, their throughput was 20%, it goes up to 100%, or x5.
The main problem that I see in leadership is lack of understanding and respect for software - "I don't understand it so how hard can it be?". Seems to be especially prevalent at German car companies where, apparently, mechanical engineering is still boss. (I'd be fine with a car with very little software, but that is not what they are trying to build...)
As a German I would love to contradict this but I tend to agree. Bureaucracy isn't such a big deal in my experience - might be different depending what area you are working in - but the leadership culture regarding software is the cause of most of the misery I've seen and I've been involved with.
Cheap as in no investments in people or software quality. Salaries are also not competitive in a lot of places.
Disregard for the user and disregard for usability.
Unfortunately most software shops locked in their customers and the lack of any technical merit pays well and is disconnected from product quality.
Only lots of bankruptcies might help. I have nothing but disdain for these people in leadership.
I've surely not seen all but I've seen enough. It's that bad.
> Salaries are also not competitive in a lot of places.
This implies there are other companies in the same city/region that pay better. I doubt it. From what I have seen, most German software devs are paid horribly, come to HN complain about it, then proceed to do nothing. The solution is to move to a place that pays higher salaries, like Berlin, Munich, Stuttgart, or another country. Or get a 100% remote job.
> Compare this to Austria, where there's a cultural flair for the dramatic (and therefore an eagerness to stand out, even if it's weird) or Switzerland where enterprises, public or private, are not afraid to place big bets.
Can you call out with some examples for those of us unfamiliar with those 'big bets'?
Switzerland sits between Germany, Italy, and France, and was getting choked by road traffic, so voters have approved the largest tunnels in the world to get goods around and through Switzerland without using roads.
Random German company: You open your intranet, manually search through hundreds of (pdf!) application-forms (because search is not implemented), downlod the right form, print it(!), fill the form, sign it, scan the paper, send it to the ticket system. That’s what they call „Digitalisierung“, because previously they had to send the printed paper-form to the helpdesk team.
I recently signed up for a simple prepaid phone plan in Germany (I have lived here for 2 years already, fully registered etc). I had to go through the full KYC process, after waiting over a week for a physical SIM card to be sent by post to me. After this, I wanted an eSIM (this was my original goal but this was not possible on initial signup).
I had to contact customer support to send me one... by post. They only activate and send eSIMs by mail. This will take another week.
How recently? Nowadays there are a bunch of "app eSIM" companies competing in Germany that offer to get you an eSIM by just installing an app, KYC and credit card in 5 min
A few days ago - I had some strict requirements of extremely low monthly cost (I only need it for sending and receiving SMS and for signing up for certain german services that require a German number) - so I want with O2 Prepaid. There are a lot of instant sign up eSIMs that are data only, which is not what I'm looking for.
I would be surprised if you're talking about an eSIM service that give you a phone number.
luckily I haven't been working with such companies, I have had enough of my dose of Digitalisierung by interacting with public offices. But at least I can communicate with the Finanzamt via email, after signing a document where I made clear I understand that emails are not a safe communication tool (while random non-certified letters are, apparently).
> while random non-certified letters are, apparently
They kind of are. Somebody would have to go and steal the physical letter and then read/scan it to make any use of it. That excludes pretty much all attacks on the process --- at least such where criminals might hope to make a larger profit than most other criminal enterprises available to them.
Whether that makes the letters a good idea is a different discussion...
Yeah, I'm sure a thousand lovely Horizon 2040 funded research projects that result in throwaway academic solutions to hyper-specific industry issues where the first MVP is shown after 5 years will come out of this.
Not even throwaway. They will result in reports and keynote presentations, but nothing truly functional. The EU doesn't understand how to structure incentives to make things work and avoid rent-seekers and grifters. Source, I've been part of some large EU consortia. Never again.
Yeah, I was always surprised by how many organizations will actually jump at the opportunity to "participate" when some EU consortia was announcing a new program or funding round.
There's a saying for that in German involving "feeding trough" and "pigs".
Reminds me of a quote from "Yes minister" in which it says one commissioner pays a farmer a lot of money to produce and another to remove the surplus, plus a lot of paper pushing in the middle.
In the examples you mentioned bureaucracy is less of a problem. They could do it but this is hard work in a sense which the culture does not reward.
The problem with germans in general is that they are unwilling or badly trained in „thinking things to the end“. The will start a „Digitalisierungsministerium“ without a clear goal of what they want to achieve let alone how to get there. In the end they will waste a lot of money on ipads and businesses lock them into their ecosystems so the can‘t get out.
It all goes back to the culture and a rigid educational system where everyone is supposed to stay where they are.
What Germans can do is create layers of bureaucracy.