Is Germany about to take a big step into the digital future? | Business | Economy and finance news from a German perspective | DW | 18.09.2021

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Is Germany about to take a big step into the digital future?

As Germans go to the polls to elect a new government, what can they expect for their digital future? What are the various parties promising and why does Europe's biggest economy need to play catch-up anyhow?

A cable to connect to the internet

To remain competitive Germany needs fast internet everywhere

The future is all technology all the time. Competitiveness will depend on connectivity. Nothing has demonstrated this more clearly than the coronavirus pandemic, when for months local health authorities were forced to fax new COVID-19 case numbers to a central agency. Besides turning daily lives upside down, it showed that Germany is way behind in digitalization and fast internet access.

Working at home, virtual visits to the doctor, home schooling and trying to get public services without showing up in person pushed the system to the edge. Many school children were left to fend for themselves and citizens could not renew ID cards as the country was unprepared for online appointments.

The lack of fast fiber optic connections has long been a thorn in the side of digital nomads, startups, high-tech companies and those who live outside big cities. On September 26, German voters will again get to decide what path the county will take.

The obvious one: Faster internet connections

When it comes to digitalization all the different political parties agree: More, better, faster. Only the timelines, details and amount of money they want to throw at the problems differ. But what are the parties offering to harness the fourth industrial revolution? 

The most obvious 2021 election manifesto battle cry is to build up the 5G mobile network and continue laying the newest fiber optic cables to bring fast internet connections to every corner of the country. Every household and business must have access.

Without this basic foundation every other part of a digital future can be forgotten. It will require billions in annual investment — just to make up for lost years — and many more billions to get to the latest standards.

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The current government, which includes Chancellor Angela Merkel's Christian Democratic Union (CDU), its Bavarian sister party CSU, and the Social Democratic Party (SPD), has made this a clear focus. The opposition pro-business Free Liberal Democrats (FDP) and the Greens also see this as a major issue. That's important because any of these parties could form part of the next governing coalition.

This past April, a law was passed giving everyone a legal right to a fast internet access, though what this will mean in practice is still unknown. The hope is that better connectivity can help the country be more competitive and lure more research and development, especially for innovative areas like autonomous driving, blockchain or artificial intelligence.

The big one: A new digital ministry

Many blame Germany's slow progress in digitalization on its decentralized political system. In many instances states have a say or make decisions single-handedly about their public sector and schools. Approval processes that cross state borders are tedious. Together this makes nationwide planning difficult and leaves a patchwork of different regulations in each of the country's 16 states.

The FDP and the CDU want to get around this loggerhead and are promising an entirely new ministry devoted to digital transformation. After being in power for the last 16 years, the CDU now sees such a ministry as necessary to centrally coordinate and plan all things digital. Creating and staffing a government agency from scratch won't be easy though.  

At the very least it could bundle the work now done in duplicate across different agencies. It would also replace a small Digital Council set up in 2018 that works in the chancellery. The group is made up of 10 volunteer experts who advise the government and are supposed to push the conversation in the right direction.

The public one: Institutions and IDs

But it is not just private individuals or businesses that should profit from a greater focus on technology. Party leaders see a big need, and an opportunity, for improvements in education. To get ahead they say all schools must to be given the newest technology, students need access to online learning platforms and be outfitted with tablets or laptops.

Perhaps less attention-grabbing than a new ministry or schools, but no less important to citizens, is the slow, paper-based public administration. Things are too analog and bureaucratic. Here all the parties agree that city hall and local governments need to be brought into the 21st century.

The most recent European UnionDigital Economy and Society Index puts Germany near the bottom of the list when ranking online citizen services among member countries. Only the Czech Republic, Bulgaria, Hungary, Croatia, Slovakia, Greece and Romania ranked worse.

This will require huge changes and investments. At the same time, the parties want to make digital IDs the standard. This would make dealing with authorities easier by making online services available like address changes, registering the birth of a child or renewing a passport.

Filling in forms, applications and signatures could all be possible without waiting in line if more national standard processes are put in place.

The tricky one: Data and IT security

But digital IDs, whether general or health-care-related, will mean more data like social security and tax numbers is "out there." And that is something many Germans don't like. It also makes those sending and receiving the data more susceptible to data theft, abuse or worse.

After a number of spectacular ransomware attacks against companies, local authorities and private individuals, everyone understands the risks of being online. That's why the leading parties are also calling for tougher data protection and IT security, by building up the Office for Information Security (BSI), for example. Other ideas are to create more European tech champions, artificial intelligence capabilities and infrastructure to be less dependent on the US or China.

Overall, the need to speed up digitalization in an organized and safe way is something that almost everyone in Germany can agree on. Whoever wins the election will have to quickly fill a big order, because the digital age waits for no one.

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