The CeBit trade fair this week may be one of the world’s biggest showcases for digital innovation, but its host country doesn’t quite get it. The Hanover fairgrounds will be bristling with robot dogs, virtual reality goggles, self-driving cars and 3D printers, the internet of things, artificial intelligence and other digital breakthroughs until the end of this week.
But German companies, literally, don’t have time for it. “The economy is booming,” said Achim Berg, chairman of IT consultant Bitkom, “and for that reason there’s no time for digital innovation.” German entrepreneurs recognize the importance of digital technologies but have been slow to implement them.
Big data, for instance – analysis of large quantities of data – has a role in just over half the firms in a recent Bitkom survey, but other technologies lag well behind that. Companies complain that strict requirements for data protection and security keep them from moving faster.
“The economy is booming, and for that reason there’s no time for digital innovation.”
Some 58 percent of big companies in Germany list “defense of existing structures” among employees as the biggest hurdle to digital innovation, according to a survey conducted for the ET Venture consulting firm. Only 38 percent of those surveyed consider their employees sufficiently qualified to deal with these technologies – and it is hard to find the properly qualified people.
The Association of German Engineers (VDI) warned that the situation is getting worse. There are 41,000 openings for IT specialists, forcing German companies to outsource tasks or postpone projects. “This means a loss of tempo, which has particularly big implications for competitiveness in the international market,” cautioned VDI’s Dieter Westerkamp.
The first wave of innovation involved putting computing power into everything. The second wave, explained Accenture boss Frank Riemensperger, is figuring out how to use the data resulting from this automation. Volkswagen’s self-driving concept car, Sedric – on display at CeBit – demonstrates this type of application, as do machine makers who now sell equipment hours instead of tools.
IT specialists at German companies are well aware of the significance of these technologies for future development. According to the Bitkom survey, 76 percent consider the internet of things – networking things like refridgerators and cars – to be important. Then comes big data with 74 percent, robotics with 66 percent, and data glasses with 57 percent.
The consulting firm PwC has forecast that the correct use of artificial intelligence technology between now and 2030 could boost growth by 11.3 percent, or €430 billion. Machine-learning, which analyzes large quantities of data and learns from that, predicting, for example, future problems or changes, has applications across the board. CeBit exhibits include a project to use drones and AI to track and monitor whale behavior. SAP shows how a digital replica of a giant ferris wheel can monitor the real thing. And of course it is an essential component of self-driving vehicles.
A virtual reality exhibit from Vodafone takes CeBit visitors to the moon. While the moon trip here is for fun, the technology will have valuable applications in industry, allowing engineers to explore the interior of a new aircraft before it is built, or telecom technicians to quickly find their way to the cables requiring maintenance.
Other exhibits demonstrate the uses of the internet of things or blockchain in business. The distributed ledger that enables Bitcoin has many applications in business, from shipping to inventory control. But the challenge for German business as always, is to get these technologies out of the exhibition hall and into the real world.
Handelsblatt reporters Ina Karabasz, Christof Kerkmann and Johannes Steger contributed to this article. Darrell Delamaide adapted it into English for Handelsblatt Global. To contact the authors: firstname.lastname@example.org, email@example.com, and firstname.lastname@example.org.