Playing digital catch-up: What Germany should do to keep up with the competition
Germany is falling behind in the digital arms race. If we want to shape the future, we need new ways to train the people who build it.
“Those who don’t digitize themselves will be knocked out,” Wladimir Klitschko is quoted. According to the European Center for Digital Competitiveness, Germany is at least down for the count. In September, the organization presented the “Digital Riser Report 2020” which compares the digital competitiveness of 140 countries. The result: In the Group of Seven, Germany is second to last, in the G20 we have slipped to 16th place. In a European and North American comparison, we are in 24th place — down from the 36th. The results are sobering for a major industrial nation where the topic is front and center in political debates. What happened?
Germany: minus 52 points
The study defines two core variables that are used to determine competitiveness: the ecosystem — such as barriers for business start-ups, government investment, or the availability of government support programs — and the mindset — including attitudes regarding entrepreneurial risk, digital literacy, and workforce diversity. In contrast to France, Saudi Arabia, and the Philippines, Germany has lost ground in both categories.
Politicians and ministries agree that we must push ahead with our digital transformation, but there is still a lack of implementation. On the one hand, we have initiatives like the “Blue Card” which makes it easy to hire foreign specialists, on the other hand, traditional industries often slow down real transformation because processes are cumbersome.
The problem lies in the mindset
“Unlike France, there is no strategic plan for digitization in Germany,” criticizes Prof. Dr. Philipp Meissner, one of the authors of the study, in the German business paper Handelsblatt. While our neighbor has set up a powerful milestone project with ‘La French Tech’, there is a whole range of measures in Germany without a clear strategy. Moreover, the focus is on large industrial projects, while a digital mindset is mostly absent.
So what did the ‘top digital risers’ get right? The measures can be summarized as follows: First, an environment was created that favors startups. In France’s social administration, for example, there is a special contact person for tech companies. This has significantly reduced the time and financial effort required to set up a company. Saudi Arabia, on the other hand, has invested massively in its digital economy to increase its performance and attract foreign investors and leading technology companies. The Philippines improved conditions for startups with capital, knowledge, and funding opportunities. Entrepreneurship is also integrated into the school curriculum.
Knowledge is constantly growing and changing
What all up-and-coming countries in the ranking have in common is that they invest in digital education and educational concepts that prepare for a world of constant change. One example is the 42 Coding School, which was launched in France in 2013. Along with a peer-learning approach that teaches expert knowledge in coding and analytical thinking, the schools also teach important soft skills, such as flexibility, the ability to think critically, and a creative approach to problem-solving. Here, too, the focus is on understanding that our knowledge is constantly growing and changing. Therefore, lifelong learning is critical if we want to face the future with courage and confidence.
Corona has highlighted the need for digital transformation for companies as well as for the educational system even more. We should take this as an opportunity to rethink study programs and training programs in order to inspire more people to pursue careers in IT-related professions — and to give them the tools they need to successfully shape the digital transformation.
In order to do this, rigid structures and old patterns should be broken down. Areas, where Germany used to rely on stability and proven processes, are overtaken by players who prove to be more flexible and have the courage to break new ground. However, Germany has a health and social security system that has proven itself in the Corona crisis and is considered an aspirational model by many countries. We have to recognize our strengths and use them to gain self-confidence for the digital turnaround.
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Article by Sophie Heinz, Head of Communications at 42 Heilbronn.
Reach out via Mail: sophie@42heilbronn.de
