Digital Germany - How the world leader in invention struggles to pick up speed in digitalisation


Talking to people visiting Germany from abroad, they often mention two things they found interesting before anything else. One of them is cleanliness. Especially Americans are always fascinated with the pristine state of German cities and towns. The other one is a surprising lack of modernity in everyday life. With Germany being the country of engineering and invention, visitors expect high tech and some futurism. What they find is a country that is very conservative in adopting new technologies.


You might find getting around rather difficult without cash, for example. In many places, cards won’t be accepted or if they are, it has to be the German style “EC card”. Debit cards, common around the world, will be frowned upon: “We don’t accept credit card, sorry.” This can be extremely irritating for travellers arriving from abroad and finding themselves unable to by train tickets or get food on a train.


There are plenty of examples like this. Germans did not take kindly to the introduction of mobile phones, for example, which they call “Handy” – believing this to be an international English term. In fact, it was coined by the Deutsche Telekom to make it easier for Germans to accept the new technology. The assumption was that a “cell phone” wouldn’t be accepted as it reminds of a prison cell, while the term “mobile phone” would have been too focused on being on the road. For years, using a mobile phone in public would attract spiteful remarks. It is hard to be an early adopter in Germany.


StreetView in its Maps app, hundreds of thousands of Germans opted out, so that Google had to introduce a blur feature for private properties. As a result, most of Germany can’t be visited via StreetView until today.


The German lawmakers were not afraid to threaten social media giants like Facebook and YouTube with huge fines if they didn’t remove hateful and illegal content within 24 hours. The German Network Enforcement Act, first seen as limitation to freedom of speech, today is a huge success. It empowered the introduction of the European GDPR, a data protection law that especially American companies feared to hamper innovation. Among other measures, GDPR introduced the right to be forgotten, forcing internet giants like Google to allow EU citizens to have their data in search engines erased.


Technological scepticism vs. Industrial leadership

Germany is a well-reputed nation of engineering and invention. However, talent and ability to invent and create collide with another stereotypical German trait: The will to do things properly and perfect, combined with a well enshrined conservatism. New things are met with scepticism and generally discouraged. The tax office alone, unable to deal with business descriptions they do not know already and dead set on making business start-ups difficult, is a huge hurdle for entrepreneurs. Red tape is common, bureaucracy can be overwhelming. Industry regulations are generally strict, which is a challenge if companies work in a new sector that isn’t well known to German authorities. Producing poor-quality or dangerous goods can result in severe penalties and reputation loss.


Nevertheless, Germany ranked top of the charts as most innovative economy in 2020, ahead of South Korea. This is not totally surprising: What might feel like a major nuisance for creative people with new ideas, creates reliable, stable quality and a solid foundation for new development. German innovation isn’t based on revolutionary leaps. It is instead a steady process of constant evolution. This is what drives the very successful and massively growing German IT market. The booming parts of the IT industry work for small and medium enterprises and deliver solutions for administration, automation, Artificial Intelligence and the Internet of Things. In short: Whatever helps the real-world engineering and manufacturing is adapted first. Innovation in IT and internet solutions in their own right are not a main focus.


This presents a special challenge for people working in IT: It is difficult to get into the market in Germany. Unlike in England or the US, where career changes are common and welcomed, Germans base employment decisions on formal education and a straightforward professional development. No Masters degree in computer science? You will struggle to find a well-paying job in Germany, no matter how much experience you bring. Requirements like this create reliability. But they also discourage thinking out of the box and fast change.


The solid backbone


Another example for this is network speed. Especially for private households, Germany ranks somewhere between position 25 and 31 worldwide. That puts the country nowhere near the top 10 and far behind leaders like Taiwan, Singapore or China. Mobile internet is even worse: The German government has approved a mobile communications strategy in November 2019 that aims to ensure nationwide supply of LTE/4G services. An interesting approach, given that the UK, for example, is already driving 5G development on a large scale.

Germany slowly, builds a comprehensive optical fibre cable network. Government funding is directed specifically towards regions where private investors wouldn’t be able to operate profitable infrastructure.


The typical German trouble, however is the demanded high standard, micromanaged by strict regulations. While the government invests billions, but with a target date in 2025 to have every household updated to the highest connection speeds, it’s likely that the new technology will already be outdated when finished.


The declared goal is to become European market leader in information and communications technologies (ICT). With Europe still trailing behind global competitors like China and the USA, this is less ambitious than it might sound. Current leader on the continent is the UK with 24 percent market share, but with the effects of Brexit setting back the British economy and especially making access for global business more difficult, this could change. On the other hand, anglo-saxon countries generally showed to be faster in innovation cycles and more flexible when it comes to employment models and the integration of new work surroundings.



Pandemic as motor of innovation

Everything you read so far in this article might soon be null and void, replaced by a sudden change in German attitude and culture. The reason is the current Covid19 pandemic, an event that, as dreadful and horrifying as it is, has triggered enormous innovation.


That is true not only for Germany, of course. But the speed in which Germans adapted to the changes brought upon by the health crisis was exceptional. The German government stepped up right from the start, hosting a hackathon with over 42,000 participants. As a tool, hackathons are as far removed from usual German strategies as you can imagine. This event came up with more than 800 projects, from an online symptom tracker to remote consultancy systems for doctors and clinics, to a track and trace system that was one of the first active around the world. All this is remarkable, given the fact that until 2018 it was straight-forward illegal to pursue remote consultations. Since then, restrictions were lifted at high speed, with the Bundestag even passing a Digital Care Act that lifts the country’s healthcare into the digital age.


Germans are, based on their experience with dictatorships that ran on propaganda and control of the media, extremely careful with every technology that might restrict unfiltered, honest information. Like in many other areas, that might put hurdles for innovation, but is on the long term possibly the safer option.


The pandemic showed that German society is willing to prioritise health and well-being over economic success. Of course, this consensus doesn’t come easy - like any other nation, Germany has its share of Covid-deniers and those that demand a fast end of protective measures. Louder, however, are voices who ask for reform: More working from home, faster digitalisation, less scepticism and more support for innovative technological solutions seem to be the order of the day. A bigger focus on ecological matters and questioning consumerism and the pressures of globalisation always leads back to the question: How can technology help to maintain a modern lifestyle while reducing the impact on nature and the environment?


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