“We Have Reached the Tipping Point in Terms of Bureaucratization”

You have been the honorary IHK President in the Stuttgart Region since July 1, 2023, and in this role, you have launched a bureaucracy check. Why is that?

Paal: I’ve been talking about bureaucracy for around 20 years. And I stopped just complaining a long time ago, as many people only do, and rightly so, of course. We all agree that nobody wants more bureaucracy and yet we are achieving the opposite. From 2011 to 2021, as a CDU member of the state parliament in Baden-Württemberg, I also looked for solutions and helped to set up the Standards Control Council, for example. This independent body of experts supports the state government in reducing bureaucracy. When I no longer ran for a seat in the state parliament in the last election and returned to the packaging industry as a medium-sized entrepreneur, I was horrified to see how much bureaucracy had increased in ten years. From a business perspective, I can say that we have reached a tipping point. It has gotten worse, and, unfortunately, I sense a resignation among many entrepreneurs. We must not allow resignation; I want to do something about this bureaucracy mania.

Bureaucracy and a shortage of skilled workers are the biggest obstacles to growth. These issues belong together. At the moment, we all feel that we no longer have enough skilled workers to deal with the bureaucracy that we have created ourselves. Provocatively, one could say that we need more engineers and fewer law experts.

And what do you want to do specifically?

This bureaucracy check is a very simple, informal survey of members of the Stuttgart Region Chamber of Industry and Commerce. Anyone – including those from outside our region – can send us their examples or cases of bureaucratic hurdles via e-mail to a special e-mail address. We will not evaluate the individual cases described to us individually but want to form clusters from the sum of all the ideas with the help of a new AI tool in order to develop systematic solutions. Instead of running after the problems, which are getting bigger every day, I want to get in front of the situation and tackle the causes. We are doing this so that at least things don’t get any worse. We won’t be able to stop bureaucratization. While the two of us are talking right now, during this interview, work is already underway in Brussels on a new regulation that we will only notice once it arrives here in a few years’ time (I can also insert this sentence into the newsletter).

You don’t have any results from this survey yet. But can you already say what bothers entrepreneurs in the packaging industry the most?

In principle, all sectors are equally affected. All the detailed minutiae no longer make sense. You have to chase after forms so often in order to regulate the simplest things. Some procedures are simply unnecessary. One example: Why does a company have to regularly check the driving licenses of its employees who drive company vehicles? We have the police to check driving licenses. Once again, that’s just not enough for us.

Another example from the packaging industry: Federal politicians are currently considering a ban on reducing packaging contents while prices remain the same. In other words, hidden price increases. Has anyone thought about how this is to be implemented in practice? Will our customers then have to provide evidence every time they change their packaging? Even if these changes are technically justified? Even if they are intended to promote sales? We have informed consumers. Everyone decides for themselves what they buy. That is why we do not need to abolish the last remnants of entrepreneurial freedom combined with entrepreneurial risk. Our social market economy is certainly not always perfect, but it works.

Surely, many bans or regulations serve to protect the climate?

There is no question that we need to speed up climate and environmental protection. As President of the Chamber of Industry and Commerce, I support this. We need to increase reuse rates and accept that the end of the fossil age has begun. Defining paths to climate neutrality and taking them is a matter of course for me. And again, it is regulated that anyone who takes this path but makes mistakes in formulations or advertising can be warned off. So, it is less risky to stop advertising climate protection. Is this doing climate protection a favor? I know of many more examples of how we regulate things before we have even begun to see the opportunities. In the use of AI, for example, we are at the beginning of a development that offers huge opportunities. And yet again, we are discussing the risks first and then will regulate everything.

What can be done right now?

Digitalization can and will help in combating the shortage of skilled workers and speed up our processes. And we can learn from other countries. I travel a lot in Asia, where there are countless examples, but successful models have also been introduced in Estonia which we could adopt in part or in full. Not everything has to always be reinvented in Germany. So: look at best practice examples and adopt them instead of doing everything from scratch, in case of doubt more bureaucratically.
I hope that we will be able to present the first results of the survey in early 2024. Combined with concrete approaches as to in which areas something needs to be done. We will then bring these approaches directly to the Regulatory Control Council.

About Claus Paal:
In 1993, graduate engineer Claus Paal took over his father’s company, PAAL Verpackungsmaschinen GmbH, which was founded in 1965. At the end of 2010, Paal retired from the company, which has since been renamed and sold. Today, he is Managing Partner of Unternehmensberatung Claus Paal GmbH and Managing Partner of A + V Automation und Verpackungstechnik GmbH. From 2011 to 2021, he was a CDU member of the Baden-Württemberg state parliament.