grand coalition Berlin needs to look beyond Germany for its digital future

Luring in startups is a good idea. Gigabit networks and opening the door to foreign capital would be even better, writes consultant Martin Eisenhut.
The rainbow of fiber optic capacity.

Sometimes it helps to take a different point of view. At first I found plenty to like in the draft agreement for the “grand coalition”, such as loosening the ban on cooperation in education. But I stumbled upon this sentence: "We want ideas from Germany to be financed with capital from Germany." At first I thought it made sense. But when I reread it, I realized that it inadvertently highlights one of our basic problems.

When it comes to the digital future, most political figures still just think, “German,” as if the savings bank on the corner is going to finance the factory two blocks down. Sure, investor-friendly regulations could help make Germany more attractive to startups. But does it have to be German capital?

One thing all successful tech hubs around the world share is how organically developed structures mix with international players and financiers until they reach a critical point where they start supporting each other. But then I read that the proposed government wants to rely on German capital for German ideas.

This used to be called "church tower policy," and it was meant negatively in two different ways – and that was even before there was globalization or digitalization. When the real and spiritual horizon is determined by how far you can see from the local church tower, you not only limit your comparisons of yourself to what is happening within sight, you also view yourself as the best.

The competition in the US and Asia is unlikely to be impressed by a declaration of intent.

Unfortunately, this inability to look beyond national borders still seems prevalent in many government and parliamentary offices. Anyone who thinks a connected future can be advanced by continuing or creating competence centers is wrong. A digital agenda can’t make progress in a national committee.

Still, there is some hope, like with the idea of developing an "artificial intelligence" master plan together with our neighbor France. Unfortunately, however, the “grand coalition” does not have any measurable objectives. It has neither outlined an action plan nor underpinned it with corresponding budgets. The competition in the US and Asia is unlikely to be impressed by a declaration of intent alone.

But why only a master plan for artificial intelligence? Proclaiming Germany as a startup nation, just as French President Emmanuel Macron has done, would have been brave – or just aligning all economic policies with a digital agenda and innovation.

A fast internet connection might do the trick instead.

Instead, politicians would rather pat themselves on the back for something as self-evident as basic digital services. Merely mentioning the term "blockchain" (line 1936 in the draft coalition agreement) does not lead to the installation of a single meter of fiber optic cable, which is precisely what is needed for the Internet of Things. And merely the promise (repeated for years) to digitize administration doesn’t shorten any lines at government offices or create digital files of analog info.

The government wants to invest €10 billion to 12 billion in the expansion of gigabit networks, but that's because it failed to do so in recent years. It sounds like a lot of money, but if you look at the costs for the Berlin Airport (€5.3 billion) and the "Stuttgart 21" urban renewal project (€7.6 billion), it’s apparent infrastructure projects still mean concrete and prestige.

I imagine how my Indian counterparts would have reacted if I had told them that the European Union's most important economy would not want to connect all its citizens to the gigabit broadband network by 2025. They probably would have looked at me in disbelief and asked me if I was really talking about Germany, whose companies are investing millions in their country.

On the other hand, I'm pretty sure about the likely reaction of Silicon Valley's venture fund managers: They would have smiled politely, secretly thinking that they would have to pony up fewer financial incentives for promising startups from Germany in the future, and that a fast internet connection might do the trick instead.

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