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Article - Digitisation

Taking control of the digital transformation

Introduction

The digital transformation is in full swing. The technological progress is rapid and is changing the way we obtain information, communicate, consume – basically, the way we live. We want to understand this transformation as an opportunity to create greater prosperity and a better quality of life for the citizens, whilst shaping it in a socially acceptable way and in harmony with our fundamental values. The Economic Affairs Ministry is fostering this through its economic policies and by providing targeted support to companies.

We have already arrived in a digitised world. Digitisation affects not only traditional IT companies, but companies across the board, in all sectors. New and changed business models are emerging: cars are being shared via apps, languages learnt online, and music streamed. But industry is changing too: 3D printers make parts for machines, robots assemble them, and entire factories are intelligently connected with one another.

We need to make good use of these changes. Germany is a leading global economy with a vital industrial core, an outstandingly positioned Mittelstand and many clever, innovative brains, and offers the best structural preconditions for a digitalised economy.

Despite this, we need to work harder than ever to make sure we don’t miss out on the opportunities offered by the digital transformation. Young, innovative start-ups need capital, not just when they are set up, but particularly so that they can grow on the world market. Increasingly, digital skills and staff with digital training are key for the competitiveness of small and medium-sized enterprises. In industry, smart production procedures can lead to higher productivity and efficiency. There is a need for assistance and support in all of these areas.

Taking control of the digital economy

Digitalisation leads not only to the creation of new products and services, but also to the disruption of traditional market concepts. The forthcoming 10th revision of the Act against Restraints of Competition is intended to further improve the regulatory framework for a digitalised economy. To this end, the Economic Affairs Ministry has commissioned a study into further modernisation of the supervision of anticompetitive behaviour, particularly in the digital economy. The findings of this study will feed into the revision of the Act against Restraints of Competition. Further to this envisaged revision of German competition law, the Federal Government set up the Commission ‘Competition Law 4.0’ to establish a legal policy platform for the further development of European competition law in particular. Find out more (in German).

We must actively manage digital transformation and introduce new, future-oriented rules governing the digital economy, the sharing economy and digital platforms (in German). In order to ensure that there is fair competition between these platforms and established market players, the Federal Ministry for Economic Affairs and Energy has launched a broad-based discussion process. A first outcome of this process was the publication of the White Paper on Digital Platforms which – based on the discussion – sets out clear proposals for digital regulatory policy. There are two aspects that are of key importance: First of all, we ought to create a level playing field for investment and innovation, which will generate inclusive growth. Secondly, we must protect people’s personal rights and their right to data sovereignty. Go to de.digital (in German) to find out more.

Policies for a digital society

A digital society needs modern infrastructure. Adopting modern internet policies means adopting fair and simple rules for digitalisation that ensure that consumers’ rights relating to the digital world can be enforced and that individuals and companies can harness the social and economic potential offered by digitalisation. The Federal Ministry for Economic Affairs and Energy has adopted a number of important internet policy initiatives and regulatory measures in order to ensure that individuals and companies can share in the benefits of technological progress and that funding is provided for new innovations. Click here to find out more about internet policies.

Facts and figures on digitalisation

28
Symbolicon für Bürogebäude in Deutschland

Percentage of commercial enterprises
that are already highly digitalised (2018)

39
Symbolicon für Eurostapel

Percentage of commercial enterprises
using Big Data in 2018

4.6
Symbolicon für Scheck

Amount in billion euros
that businesses and individuals invested in start-ups in 2018

54
Symbolicon für Sicherheit

Percentage of German companies
that have already fallen victim to cyber crime (2018)

Strategies for the digital transformation

Utilising opportunities - a regulatory framework and strategies for the digital age

We want to actively shape the digital transformation: we want to tap its opportunities and tackle its challenges. We want digitalisation to unleash its potential for growth, to improve people’s quality of life, and create prosperity for all citizens. This requires a fair regulatory framework and forward-looking strategies.

The implementation strategy “Shaping the course of digitisation”

The Federal Government aims to shape the digital transformation and make Germany fit for the digital age. To this end, it adopted its implementation strategy “Shaping the course of digitisation” (in German) on 15 November 2018. It builds on the 2014-2017 Digital Agenda to provide clearly defined principles to guide our policies to shape the digital transformation for commerce, workers and citizens. It aims to further improve the quality of life for everyone in Germany, to unleash the economic and environmental potential offered by digitisation, and to safeguard social cohesion in the digital age. Further information about the implementation strategy can be found at www.digital-made-in.de (in German).

In drafting the implementation strategy, the Economic Affairs Ministry has placed a special focus on digital innovations and Germany’s future competitiveness.

New digital innovations – particularly in the field of artificial intelligence – are to be facilitated with a view to safeguarding our prosperity and upholding our fundamental values in Germany and Europe. Germany has the desire, the capability and the tools to innovate. At the same time, we wish to promote specific products and practical solutions. The aim is to use outstanding technological research to bring outstanding technology products “made in Germany” and “made in Europe” to market.

Artificial Intelligence Strategy

The Federal Government adopted its Artificial Intelligence Strategy on 15 November 2018. The Strategy was drawn up jointly by the Economic Affairs Ministry, the Research Ministry and the Labour Ministry. The Federal Government’s aim is to safeguard Germany’s outstanding position as a research centre, to build up the competitiveness of German industry, and to promote the many ways to use AI in all parts of society. The focus is to be placed on the benefits for people and the environment, and the intensive dialogue underway with all sections of society about AI is to be strengthened. You can learn more here and at www.ki-strategie-deutschland.de (in German).

Making a success of the digital transformation in Germany´s administration

German administrations also want to keep pace with the digital transformation. Germany has embraced a statutory commitment that citizens and companies will be able to handle their applications, documentation and reporting obligations online by 2022 at the latest. The basis for this is the Online Access Act. The Economic Affairs Ministry is working with Hamburg, which has the lead responsibility amongst the Länder, to realise the “Leading and developing companies” section, i.e. the digitisation of most administrative services relating to businesses. This involves roughly a thousand individual services. The digitisation of business-related administrative services entails substantial changes to legislation.

The study entitled "Top 100 – the most important and frequently used administrative services for businesses” did valuable preparatory work for this. The study is available for download here (in German).

Digital Summit – one central platform for developing digital policies

We can make best use of the opportunities of digitisation for business and society if all the stakeholders work together on this. The Digital Summit (in German) (previously the National IT Summit) and the work that takes place between the summit meetings form the central platform for cooperation between government, business, academia and society as we shape the digital transformation.

The National IT Summit was renamed the Digital Summit in 2017. This takes account of the fact that the digital transformation affects not only the telecommunications sector, but all sectors and society itself – from the cultural and creative industries to Industrie 4.0. The next Digital Summit will be held in Dortmund on 28 and 29 October 2019. Its programm is also available in English.

Boosting business through smart networking

The Federal Government’s Smart Networks Strategy (lead ministry: Economic Affairs Ministry) aims to tap the potential for digitisation in key sectors of the economy and society (education, energy, health, transport, administration). By making optimal use of the possibilities created by digitisation and networking, it is thus making a major contribution towards boosting prosperity in the interest of the overall economy and society as a whole. The Strategy is underpinned by a unit (Smart Networks Initiative) which provides good examples of smart networking and reduces the costs of the stakeholders in terms of obtaining information and engaging in coordination. Find out more.

High-speed networks are key

The comprehensive digitisation of our economy and society requires outstanding broadband networks which permit gigabit-per-second speeds (both download and upload), reliable real-time-capable transmission and high-quality secure internet services.

With a view to Germany’s future competitiveness, it is important for the roll-out of gigabit networks to take place rapidly in the landline (fibre-optic networks, high-performance broadband cable networks) and mobile (5G) sectors. For this reason, the Federal Government has set itself an ambitious target: gigabit networks which cover pretty much the entire country by 2025. This will open up the possibility for many different new business opportunities and business models for network operators, but will also require a willingness to undertake significant investments.

Telecommunications regulation in particular can provide strong incentives for private-sector investment in new gigabit networks. The Federal Government is working in Brussels to ensure that the new framework for European telecommunications law offers sufficient scope for pro-investment incentive mechanisms for cooperation on the roll-out, and the best possible use should be made of this in the forthcoming revision of national legislation.

Driving forward digital inclusion and skills development

Digitisation is particularly affecting the areas of knowledge, education and training: our job roles will be fundamentally transformed. This means that a special focus needs to be placed on digital inclusion and education. The Federal Ministry for Economic Affairs and Energy is funding the ‘D21-Digital-Index’, which is the most relevant study for assessing to what extent Germany has been digitised so far.

The focus is no longer exclusively on helping people gain access to the internet, but on securing an adequate supply of skilled workers and on digital integration. At the 2016 National IT Summit, the Federal Ministry for Economic Affairs and Energy presented a paper on digital education outlining how digital learning and skills development are to be enshrined across the entire education chain.

Publications

Keyvisual zu G20, Symboldbild für Digitalisierung; Quelle: iStock.com/Yakobchuk

© iStock.com/Yakobchuk

DE.Digital

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SMEs Digital

Driving forward the digital transformation in small and medium-sized enterprises

New software solutions, Industrie 4.0 applications, standardised e-business processes and digital networking provide SMEs and skilled crafts businesses with a wide range of opportunities for developing new products and services. The Federal Ministry for Economic Affairs and Energy is using targeted awareness-raising campaigns, information and qualification events in order to support SMEs and skilled crafts businesses and to make the best possible use of the potential of digitalisation.

Digitalisation and networking are having an impact on all parts of a business – e.g. from products and services to working, production and communication processes. Studies have shown that SMEs are doing less well than big companies when it comes to digitising their working and business practices. SMEs need to face up to this digitalisation, harness the opportunities and master the challenges linked to it in order to keep their business viable and competitive in the long term.

‘go digital’ helps small and medium-sized companies access IT consultancy services

The nation-wide ‘go digital’ programme helps SMEs embrace digitisation. It gives them targeted advice and implementation services from authorised consultants in three modules: “digitalised business processes”, “digitalised market development” and “IT security”. For more information (in German), please visit: www.bmwi-go-digital.de.

Innovative Start-ups

Start-ups – the driving force behind digitalisation

Young companies are highly innovative and thus substantially drive forward the digital transformation. Start-ups are willing to take risks, they are dynamic and flexible. They develop digital solutions and business models that can be quickly brought to scale. This is why the Federal Ministry for Economic Affairs and Energy is supporting young start-up entrepreneurs, in particular as they go through the capital-intensive growth stage.

Tools for funding venture capital

In order to foster the German venture capital market, the Federal Government has a wide range of instruments for the various financing phases (early/seed phase, start-up phase, growth phase) and target groups (start-ups (via equity), business angels, fund investors, VC funds). Thanks to the High-tech Start-up Fund, the coparion co-investment fund, the ERP/EIF fund of funds, the European Angels Fund and the ERP/EIF growth facility, more venture capital is now available for young, innovative companies.

The INVEST programme has been a huge success, which is why the Federal Ministry for Economic Affairs and Energy extended the programme, doubled its volume to €500,000 as of 1 January 2017, and introduced a new exit grant worth 25% of the sales profit.

The launch of the new KfW Capital investment vehicle in October 2018 aims to give a further key boost to the venture capital market in Germany. Up to 2020, KfW plans to successively double the annual amount of funding provided by KfW Capital to €200 million. This initially takes place primarily via the existing ERP-VC Fund Investments programme. KfW Capital invests up to €25 million in selected venture capital funds in Germany and Europe which take stakes in young, growth-oriented technology companies. Also, KfW Capital is a partner in the High-tech Start-up Fund and coparion (see above). Further to this, KfW Capital aims to improve the quality of its venture capital funding.

The aim is to develop a product structure in which the individual financing phases are dovetailed throughout the entire company lifecycle. In total, the expansion should result in funding commitments of around €2 billion in the next ten years.

Detailed information about the funding and financing instruments that exist can be found in the SME financing section.

Bringing together start-ups and supporting their internationalisation

Many large German cities are currently seeing the creation of regional digital hubs that bring together representatives of start-ups, academia, SMEs and industry. The Digital Hub Initiative is to help the twelve German hubs to better connect with one another and to make them more widely known around the globe. The initiative is also designed to attract international startups to Germany. In March 2017, the Federal Ministry for Economic Affairs and Energy opened a new hub agency, which is to promote networking. More information about the initiative can be found under www.de-hub.digital (in German).

In the long run, most digital start-ups are successful only if they internationalise their activities and look beyond national and European borders. The German Accelerator (in German) provides access to comprehensive mentoring and coaching services in the US for German start-ups and young entrepreneurs in the life sciences, the technology sector and the digital economy.

In addition, exchange programmes that meet the specific needs of businesses help pave the way for success. The Federal Ministry for Economic Affairs and Energy helps German start-ups to develop new markets and, in the other direction, facilitates cooperation between foreign start-ups with German SMEs, for example, by funding the German Indian Start-up Exchange Program (GINSEP) of the German Startups Association.

Engaging in dialogue with start-ups and launching competitions

The Federal Ministry for Economic Affairs and Energy has been organising a series of start-up nights that help link up start-ups with established companies. Young companies can showcase their business ideas to large corporations and SMEs and to get into conversation. This makes it possible for the well-established firms to pick up on innovative ideas for their companies and for young entrepreneurs to benefit from other companies’ experience. In order to boost the number of high-tech start-ups that are being created in Germany, the Ministry has also redesigned the ‘Digital innovations’ competition for business start-ups. The competition helps potential start-up entrepreneurs by providing them with advice and capital, and by linking them up with established companies and potential investors.

In the context of the ‘Young Digital Economy’ Advisory Board, the Federal Ministry for Economic Affairs and Energy has established a direct and practical dialogue between the young German start-up scene and policy-makers. The Advisory Board gives the Federal Minister for Economic Affairs and Energy advice particularly on the development and potential of the young digital economy and on new digital technologies in Germany, and on how to provide start-ups with a better environment in which to grow.

Wall with post-its from an Start-Up; Quelle: Getty Images/Emely

© Getty Images/Emely

Start-ups: a driving force for growth and competition

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Funding new Technology

State-of the art digital technology – from the research lab all the way to the market

The Federal Ministry for Economic Affairs and Energy’s funding programmes for digital technologies provide important stimulus for transferring scientific findings into state-of-the-art technology that can be sold on the market.

Under its ‘development of digital technologies’ portfolio, the Federal Ministry for Economic Affairs and Energy provides funding for pre-commercial research and development projects. The aim of this work is to pick up on key ICT trends at an early stage and to accelerate the process of transferring scientific findings into marketable state-of-the-art technology with high-level potential for practical applications.

There are a wide range of funding priorities: The smart data programme helps fund projects in the areas of industry, mobility, energy and healthcare in which innovative, secure big data solutions that can be widely used are developed.

The aim of the Smart Data Economy - Artificial Intelligence, Semantics, Autonomy (in German) technology programme is to fund flagship research and development projects which are developing and testing novel smart solutions like data products and services, and data services and data-based business models derived from them. Here, an integrated view is to be taken of a digital data economy and AI-based systems. The programme will help us to make use of the opportunities of the digital transformation in the fields of application in the digital economy.

The PAiCE – Digital technologies for business funding programme addresses forward-looking technology fields such as product engineering, logistics, service robotics, additive manufacturing, industrial communication and projects that cut across several of these fields. Bringing together scientific networks and excellent medium-sized companies in an efficient way is to help speed up the transfer of creative ideas and scientific findings into practical applications.

Under the Smart Service World I and II programmes, funding is provided for projects that seek to develop smart services which can be used in many different areas of our lives and across all business sectors.

Under the Trusted Cloud funding programme, a particular focus was placed on cloud services. The programme aims to build trust for cloud-based solutions among companies – for example by introducing unified and transparent criteria for assessment. Two follow-up activities have resulted from the successful technology programme: the network of excellence with a market place and the label for trusted cloud services, and the AUDITOR pilot project to provide data protection certification for cloud services.

An overview of the programmes that received funding up until 2015 can be found here (in German).

Tablet and traffic infrastructure, symbolic of intelligent networking; Source: stockphoto.com/ martin-dm

© stockphoto.com/ martin-dm

Smart networking

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Security and Standards

Providing for secure digital services that users can trust

As our economy and society become ever more digitised and interconnected, ensuring data security and adopting reliable standards becomes ever more important. The Federal Ministry for Economic Affairs and Energy wants to ensure that small and medium-sized companies can protect themselves against cyber threats and that they can fully share in the benefits of the digital transformation.

As part of its ‘IT Security in Commerce’ initiative, the Federal Ministry for Economic Affairs and Energy constantly develops new and specific measures that help raise awareness for IT security among businesses, particularly SMEs. In view of the growing importance of IT security as the digital transformation continues, the Initiative’s work will be greatly expanded from 2019.

A special focus is placed on optimising the regulatory framework and on strengthening the IT security sector at both national and European level. Not least, data on the IT security market are collected and evaluated at regular intervals in order to identify appropriate measures.

Reliable data protection in the cloud

Cloud services are central to the digital transformation of the economy. This platform lists only those cloud services which meet the criteria of the Trusted Cloud Label – i.e. which are trustworthy and meet the requirements for transparency, security, quality and compliance with the law. The label was the result of the work undertaken in the context of the Trusted Cloud technology programme, which was launched in 2010 with the aim to develop innovative and secure cloud computing solutions, particularly for SMEs. The programme ended in 2015.

Unified standards for Industrie 4.0

The close networking of technologies and value chains allows for an intensive exchange of data and therefore the creation of more interfaces. This means that unified standards are crucial for Industrie 4.0. You can find out more about this here.
Ensuring that our information and telecommunications technologies are both standardised and interoperable is important not only technologically, but also from a business perspective. Standards offer a competitive edge in global competition to those who develop and enforce them. The Federal Ministry for Economic Affairs and Energy places a strong focus on open standards and interoperability in order to not only guarantee that complex ICT systems function flawlessly, but also in order to make sure that there is unrestricted access to the ICT markets and to free competition.

Woman in front of a monitor; Quelle: Getty Images/Bloomberg

© Getty Images/Bloomberg

Industrie 4.0

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International Digital Policy

Creating a European and global framework for the digitalisation

Industrie 4.0 and the digital economy are issues that cannot be addressed by one single country. It is necessary to maintain a dialogue and adopt similar regulatory frameworks so that companies around the world can remain competitive and work together.

The Digital Single Market

Shaping and mastering the digital transformation of the economy and society is a key precondition to ensure that Europe continues to be competitive. The digital single market needs to be completed as swiftly as possible. The aim is to create gigabit infrastructure, a European data space and a European data economy – including an adequate policy environment for business so that full use can be made of the possibilities for digitisation and the potential for growth in the Digital Single Market. The digital economy and trade do not stop at national borders. Creating a European Digital Single Market therefore is the only way that ensures that companies can provide products and services that are based on the same rules and standards across the entire European Union and that companies can grow on the European market.

For this reason, the current European Digital Single Market Strategy addresses a wide range of issues. The strategy, which was initiated by the European Commission in May 2015, is to achieve three over-arching objectives:

  1. to give companies and consumers better online access to goods and services all across Europe;
  2. to put in place the right framework and a level playing field for flourishing digital networks and innovative services; and
  3. to fully harness the potential for growth in the digital economy.

In the context of this ambitious strategy, 35 key measures have since been presented, which break down into more than 60 legislative and non-legislative measures. 25 key measures have since either been adopted, or a political agreement has been attained on them so that they can soon enter into force.

All the measures of the Digital Single Market Strategy are to be completed by the end of the term of the current Commission – 31 October 2019. The Federal Government, represented by the Federal Ministry for Economic Affairs and Energy in its role of coordinating Germany’s EU policy, is continuing to work to achieve swift progress in the negotiations and in the process of implementing individual measures following in-depth discussions.

European General Data Protection Regulation

The new European General Data Protection Regulation (GDPR) replaces the data protection directive from 1995. It provides modern answers as our economy and society become ever more digitised. The GDPR provides an up-to-date set of European data protection rules that help find answers to how to keep data safe in an age marked by big data and new methods and types of data processing such as profiling, web tracking and cloud computing.

Internet governance

Internet governance covers a large number of different fields, ranging from web domain registration rules, global IP address allocation to, in particular, general questions about the level of openness or stability and the web. The Federal Government provides input on internet governance via a number of international bodies and organisations. Germany will host the Internet Governance Forum of the United Nations for the first time in November 2019.

G20

During its G20 presidency from 1 December 2016 to 30 November 2017, Germany initiated the first ever Digital Ministers’ process to take place at G20 level. Under the German Presidency, the ministers responsible for the digital economy in the G20 countries discussed the challenges and opportunities of digitalisation and drafted proposals for action. The focus was on three areas: the links that exist between digitalisation, economic growth and employment; trust, confidence and transparency in the digital economy; and Industrie 4.0. In the final ministerial declaration and in a roadmap (PDF, 427 KB), they identified eleven key fields of digital policy and agreed on a specific way forward for the future work of the G20. An overview of the results achieved as part of the Digital Ministers’ process under the German G20 presidency can be found here (in German) (PDF, 83 KB).

More information on digitalisation under the German G20 presidency can be found here.

Further information

  • 10/06/2019 - Press release - International Cooperation

    G20 Ministers adopt Statement on Trade and Digital Economy

    Open detail view
  • 16/11/2018 - Joint press release - Key Enabling Technologies

    Federal Government adopts Artificial Intelligence Strategy

    Open detail view
  • 10/08/2018 - Press release - Digitisation

    Higher grants for digitisation in advanced training institutions

    Open detail view
  • 06/06/2018 - Press release - International Digital Policy

    State Secretary Nussbaum: Ministry's AUDITOR project to guarantee compliance of cloud services with data protection rules

    Open detail view
  • 02/05/2018 - Press release - Digitisation

    2018 Digital Summit to be held in Nuremberg

    Open detail view
  • 18/04/2018 - Press release - International Digital Policy

    State Secretary Bareiß opens first Western Balkans Digital Summit

    Open detail view
Computer chip and gas fiber, symbolic of digitisation; Source: Getty Images / Rafe Swan