We live in a fast-moving world. Success and failure are increasingly dependent on the time factor and on technologies that contribute to controlling this factor. Therefore, information technology and digital economy are at the centre of economic innovation. For years, the German Economic Council has pushed the government to promote the conditions for digitalisation. Here is a contribution on the subject by its general secretary.
Digitalisation offers outstanding conditions for sustainable growth and increasing our innovative potential. Today, it encompasses all business and production processes and creates opportunities especially for our innovative medium-sized companies. Small and medium-sized companies that adopted these new technologies increased their sales by 15 per cent between 2010 and 2012 and at a quicker pace than their competitors, according to a current study by the Boston Consulting Group.
But we have to continue with our efforts. The increasing convergence of the media and the progressive globalisation call for an urgent digital regulatory policy. We must finally make digitalisation a top priority – in politics and in companies.
It is a given that new technologies can only unfold their full potential if access to them is ensured. The expansion of broadband as part of the technical infrastructure is both basic condition and catalyst for growth and innovation. The digital economy has long since developed into an extremely strong growth sector. Its share of the commercial value creation equals 4.7 per cent and is thus ahead of our traditional strengths: automotive engineering (4.3 per cent) and mechanical engineering (4.4 per cent).
With a share of three per cent of the gross domestic product, the German Internet economy is still significantly behind countries like Great Britain, where the share is almost three times as high.
Germany also has a significant backlog when it comes to the broadband infrastructure. Germany only ranks among the bottom quarter of OECD nations with an average speed of just under 22 Mbit/s.
The internet is increasingly developing into the centre of life for medium-sized companies. Today, the internet connection is what electricity and water connections where 100 years ago. Therefore, it is fortunate that the German federal government set an important example for the future viability of our country with its promise of a nationwide broadband expansion. One thing is clear: the promise in the coalition agreement to ensure a nationwide basic provision with at least 50 Mbit/s in Germany until 2018 is very costly. Experts estimate the costs for the intended broadband expansion at 20 billion euros. Thus, it is even more disastrous that the German federal government has withdrawn its initial commitment in the final version of the coalition agreement to finance the broadband expansion with one billion euros annually. This is a devastating sign, especially when considering that this sum is already small compared to the overall costs.
Failing to set the course now will accompany us for decades. We have to address this more vehemently and urgently need to create the conditions for more investments. Legal conditions that provide companies with investment security, especially for the expansion in sparsely populated regions, are a priority in this. But investment incentives must also be created for private investors.
We must all bear in mind that the ambitious goal of having a nationwide broadband provision with at least 50 Mbit/s until 2018 is only possible if politics and business work together. Despite all the ambition to reach the proposed broadband goal by 2018, it is already clear today that, with growing amounts of data and increasingly data-intensive applications, we will then already need larger bandwidths. In a world that is being digitalised at an ever-faster pace, the disadvantages in case we would lose the connection (in the truest sense) would be devastating and probably irreversible for the future of the industrial location Germany.
Apart from infrastructure, protection and safety are the biggest challenges for the success of digital innovations. The disclosures of the NSA affair and the reports on the misuse of personal data have permanently changed the view of data security. We have to regain lost trust with a high level of data security. A uniform European data security system is urgently needed for this. Therefore, the European General Data Protection Regulation has to be passed as soon as possible.
The enhancement of IT security is another considerable factor for success. An example for this is the so-called fourth industrial revolution, hence linking traditional production and digitalisation. There are also great opportunities for innovative medium-sized companies in Germany here. With our expertise in engineering and embedded system, we have the opportunity of becoming a leader on the world market. But when it comes to the topic of industry 4.0, a pioneering role for Germany is only imaginable with an appropriate IT security system.
Wolfgang Steiger ist seit 2009 Generalsekretär des Wirtschaftsrates der CDU e.V. Der gelernte Bankkaufmann arbeitete für die Commerzbank und schied nach zwei Legislaturen als Mitglied des Deutschen Bundestages freiwillig aus, weil es ihn wieder in die Wirtschaft zog. Danach machte er sich mit der S-International Consulting GmbH als Unternehmer selbständig.