I am often asked why the topic of digitalization is so important to the Free Democrats. Are we onto a trend? Is it the zeitgeist? Or perhaps we have the wrong priorities? On the contrary. Digitalization can make our lives easier, better and safer. It is also an opportunity to make an important contribution to securing our future prosperity.
To illustrate my point, let me cite one number: €500 billion ($594 billion). This is the value of opportunities for growth and prosperity that Germany will forfeit by 2025 if we do not exploit our digital potential more effectively, according to calculations by the McKinsey Global Institute. And it’s why the next federal government needs to focus on how to shape digitalization as part of its agenda for the future.
Unfortunately, Germany is far from utilizing the economic advantages of digitalization. The digitalization indicator by the German Academy of Science and Engineering and the Federation of German Industries (BDI) ranks Germany 17th among 35 industrialized countries. In the 2014 World Cup, coming in 17th wouldn’t even have qualified us for the round of 16. That alone should be incentive enough to finally go on the offensive. We need a plan to make us world champions of digitalization.
I propose a six-pillar plan, which I call 6S: speed, skills, security, startups, science, services. In other words, we need powerful high-speed networks as quickly as possible. We need to significantly improve digital education and our teaching of digital skills. IT security needs to become a priority for our society. We need better underlying conditions for successful startups. Germany’s innovative and research strength, and our excellence in science, needs to be strengthened. And the government must be at the avant-garde of digital development by modern state-of-the-art services, driving progress in all areas of the economy and society.
First, there is speed. High-speed networks are the basis for successful digitalization. But Germany is hopelessly behind when it comes to expanding gigabit-capable infrastructures. We are in second-to-last place among European countries, with less than 2 percent fiber-optic penetration. This alone shows that gradually increasing investment funds is no longer sufficient. Which is why I propose strong incentives for infrastructure investment. The government could raise investment funds of around €30 billion by selling its shares in Deutsche Telekom and Deutsch Post. This money could be used to pay for fiber optic expansion, particularly in rural areas, which would spur competition-driven expansion in urban areas.
Second: Skills. Germany’s success in global markets has never been based on overly aggressive marketing, the sheer size of its companies, or even low prices. Our success is based on high quality, which comes from our strong qualifications. In the digital age, Germany needs to ensure that, once again, it provides the benchmark for the world’s best education. This requires state-of-the-art schools, professional training facilities, and universities with the best equipment and the best teachers. And it requires a major financial commitment, which is why the federal government must become more strongly involved in a task that involves all levels of government. As a first step in this direction, the FDP proposes a treaty between federal and state governments to digitalize our schools.
Third: Security. We still underestimate the huge importance of cybersecurity. That needs to change. IT association Bitkom estimates that cybercrime costs the German economy €55 billion a year. Yet cybersecurity isn’t just an issue for business.
Targeted hacker attacks on critical infrastructure like power plants, the transportation network or the financial system, sometimes supported by foreign countries, could jeopardize society as a whole. This is why defense against such attacks — throughout society, the economy and politics — must play a central role, and be professionalized. The most important piece of the puzzle is the right experts.
The way German government agencies operate is often more reminiscent of Bismarck than of bits and bytes.
Every year, around 25,000 students earn a degree in computer science, and about 10,000 young people successfully complete specialist IT training. But this doesn’t even cover the current shortfall. There were almost 30,000 unfilled positions for computer scientists in 2016, while the total shortage of skilled personnel in IT is estimated at more than 50,000. This is why I believe our goal should be to double the number of junior IT experts in the dual education system and our universities in the coming years.
Fourth: Startups. New companies not only provide economic momentum, technological progress and new employment opportunities. They can change the world, as companies like Google and Facebook have done. Many studies show Germany’s startup culture is weaker than that of the United States, Israel or the Netherlands. One of the main problems is financial. And startups are not the only companies in Germany that still have trouble generating sufficient growth potential, which is why the Free Democrats are proposing a risk capital law.
In fact, analysis by the KfW development bank showed concern for personal financial survival is the biggest hurdle to starting a new company in Germany. Under the leadership of digitalization minister Andreas Pinkwart, a member of the FDP, the new state government in North Rhine-Westphalia is taking a very interesting approach. It wants to introduce a scholarship for company founders with a much broader impact than, for example, the Exist program, which is heavily oriented toward academic operations. The program in North Rhine-Westphalia precisely addresses the problem of personal financing risk and can drive a new startup dynamic. It might also be a good model for the federal government.
Fifth: Science. From Apple to Facebook to Google, many entrepreneurial drivers of digitalization in the last few decades arose at elite American universities. There is no question Germany has a strong and diverse academic landscape. But there is room to improve on excellence. The Technical University of Munich is the first German university to make it into the QS World University Ranking — and is still only in 60th place. Our goal should be to lead the world, especially in higher education.
This is also a question of financial resources, which is why I still believe we should enable our universities to improve their facilities and academic conditions by allowing them to charge tuition fees, payable after graduation and on the basis of income.
Innovative forces need to be unleashed in our economy, because successful digitalization begins with innovation. By creating tax incentives for German small and mid-sized companies to promote research, we could expand space for research and development.
Sixth: Services. We cannot achieve digital success in an analog country. But the way German government agencies operate is often more reminiscent of Bismarck than of bits and bytes. According to a study by the Cologne Institute for Economic Research, it takes about 15 days to set up a company in Germany, and three weeks to get an appointment to register a car in Berlin.
How can we justify wasting all this time, given today’s technical possibilities? Why do we even need an appointment at a government agency to register a car? And why can’t we register a startup online with a click of the mouse? Germany needs to up its game here. Countries like Estonia have already shown that it works.
As a first step, secure and fast online identification must be possible for every citizen, which requires enhanced personal identification cards. And government agencies should be able to accept verification of identity without complicated and expensive card-reading devices, simply through webcam or video telephony — as is already standard procedure with banks. This simple step could eliminate many visits to government offices.
Digitalization offers the chance to improve our lives and secure our future prosperity. We need to take advantage of our potential, which is why the issue is so important. We want to be the world champions of digitalization!
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