setback / regression
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setback
A movement or development back to an earlier, worse state or a lower level. It is the opposite of progress.
Die Schließung der Bibliothek ist ein kultureller Rückschritt für die Stadt.
The closure of the library is a cultural setback for the city.
The word is made up of the prefix 'Rück-' (back) and 'der Schritt' (the step). So it literally means a 'step backward' and is usually used negatively in the sense of a deterioration.
Für seine persönliche Entwicklung war der Jobwechsel ein Rückschritt.
For his personal development, the job change was a setback.
'Rückschritt' (setback) is often used with the verbs 'sein' (to be), 'bedeuten' (to mean/represent), or 'darstellen' (to constitute/represent) to evaluate a negative development. You can also say 'einen Rückschritt machen' (to take a step backward).
Die neue Regelung stellt für die Mitarbeiter einen großen Rückschritt dar.
The new regulation represents a major setback for the employees.
To say for whom or what something is a setback, you use the preposition 'für' (for) followed by the accusative.
Die Kürzung der Gelder ist ein herber Rückschritt für die Forschung.
The funding cuts are a severe setback for research.
development
'die Entwicklung' and 'der Rückschritt' both describe a change, but in different directions. 'Entwicklung' is usually open or positive: something grows, changes, or moves forward. 'Rückschritt' means that something gets worse or falls back to an earlier, worse state. When a project, a skill, or a situation is making progress, you use 'Entwicklung'. When progress that had been achieved is lost, 'Rückschritt' fits.
Die neue Regel ist für viele Mitarbeiter ein Rückschritt, weil sie weniger Freiheit haben.
The new rule is a setback for many employees because they have less freedom.
Die Entwicklung im Team zeigt, dass die neue Arbeitsweise gut funktioniert.
The development within the team shows that the new way of working is functioning well.