Whether in research, patents or investments: Germany is lagging behind major countries when it comes to digital technologies, warns the development bank. It warns of major losses in prosperity.
Germany is lagging far behind in the research and use of digital technologies compared to other countries. This is the conclusion reached by the state development bank KfW in a new study published in Frankfurt. It identifies a backlog in scientific publications and patent applications on digital technologies as well as in IT investments by companies.
“If the digital transformation fails, there is a risk of significant losses in prosperity,” warns the bank. Countermeasures must be taken by politicians and companies. “Germany will need a lot of patience to catch up with the leading countries in the research and use of digital technologies,” says KfW chief economist Fritzi Köhler-Geib.
Significant gap to leaders
According to the study, China and the USA published almost six times and four times as many scientific studies on digital technologies as Germany. Japan is the leader in patent applications in the field of digital transformation, followed by the USA. These countries apply for almost three times as many patents as Germany, which is significantly ahead of France. KfW also sees deficits in foreign trade: Germany imports more goods based on digital technologies than it sells abroad.
The KfW analysis also shows that German companies’ spending on digitization is relatively low. In relation to gross domestic product, companies spent only 1.4 percent on IT investments in 2022 – the same amount as in 2019. In order to catch up with other highly developed countries, IT investments in Germany would have to increase by a good double or triple to around 140 to 180 billion euros per year.
Technological strengths in important fields
It is necessary to strengthen basic research in Germany into digital technologies, says the KfW. In addition, politicians must promote research and development in companies and expand the infrastructure to provide all companies with good internet connections, for example. But there are also positive aspects, wrote chief economist Köhler-Geib. “For example, the high-quality academic research in the field of artificial intelligence is highly valued internationally.” In addition, Germany has technological strengths in areas such as robots and autonomous driving.
Source: Stern
