If you’re not part of the Uber, Amazon and Facebook movement that’s driving the digital revolution, you’re likely to miss the boat. And if you miss the boat, you could find yourself stranded. Like Kodak - a one-time photography pioneer that ended up bankrupt because it refused to move into the digital world.
You need to UBER yourself – otherwise you get KODAKed.
But are revolution and disruption the only saviours in Germany’s digital future? Is this country’s only solution to disrupt itself, to decide before others do it for us? Sometimes it’s helpful and occasionally it’s necessary. But I believe that’s only the half of the digital transformation. We shouldn’t be asking ourselves: How can we build a German Google? How can we build a German Nest? What we really should be asking is:
How can we turn Daimler into Google? How can we turn Viessmann into Nest? How can we initiate evolution in place of mere revolution?
How can we reconcile our German engineering expertise and substance with our own digital transformation – rather than with other countries’ transformations? How can we uphold our values and use them to create even more value?
Heating system manufacturer Viessmann generates 2.25 billion euros in revenue in the Hesse town of Allendorf with German engineering. Nest Labs in Palo Alto, California, earns 350 million a year with a few smart thermostats – but it’s worth 3.2 billion euros on the stock exchange. What kind of value could a heating manufacturer that combines engineering excellence with digital excellence – its own digital excellence, not Nest's – be capable of generating?
But that won’t happen unless we multiply our existing options...
...by the digital factor – instead of fragmenting them and splitting them up. What do we have to do to create a “multiple” – as they say on the stock market- a digitalisation factor or a “D factor” for our enterprises and our nation? How can we turn “Made in Germany” into “Coded and Engineered in Germany”? How can we establish a “German roadmap”?
I believe we have to mobilise our substance. And by substance I'm talking about our people, out machines and our enterprises.
We have to address our infrastructure and education system. We have to address entrepreneurship. And we have to address our inner attitudes.
We discussed these topics at the end of last week at the Handelsblatt Giga Summit in Sölden with CEOs like Till Reuter from VW und Janina Kugel from Siemens, as well as digital visionaries like Johann Jungwirth of VW and strategy experts like Julius van der Laar – and numerous entrepreneurs and academics.
I took many of the things we discussed in Sölden back home with me to Munich and Düsseldorf. I reflected on them over the weekend - about what we need to take Germany forward into a successful digital future. And now I’d like to share the answers I came up with.
An affordable gigabit connection for every German by 2025
Infrastructure is imperative. The Roman Empire’s foundations were its trade route infrastructure. Those trade routes are the equivalent of today’s digital highways. If you don’t have access to them, you don’t have a future. All the places with slow digital highways will make slow progress in the digital transformation. Without infrastructure, there is no innovation. Without innovation, there can be no digitalisation. Without digitalisation, we cannot make progress. And without progress, it’s only a matter of time before our country’s prosperity wanes.
If we want to accelerate from a slow crawl to the speed of light; if we want to move up from the bottom to the top of the digital ladder, we can't afford a hesitant alliance. We need politics and industry to forge a strong and consistent union. And a clear gigabit strategy. A strategy that doesn’t just focus on cheap compromises to deliver “up to 1 gigabit” speeds.
We don’t need a digitalmaximum limit. Our country has to commit to making one gigabit the minimum limit.
To achieve that we also have to be consistent in our funding of infrastructure development. Billions of euros of German taxpayers’ money are still being invested in outdated copper technology. It seems as if we are determined to move back into the copper age instead of forward into the gigabit age. G for gigabit goes hand in hand with F for fibre. This is the future technology that Germany should be investing its development funds in. If we start putting the right infrastructure in place today we can give all citizens an affordable gigabit connection – and with it access, participation and more prosperity for Germany.
By 2025 every child should be leaving school with digital skills
Having an excellent infrastructure is of little use if people aren’t able to fully exploit its potential. So we have to give them a digital education. And turn “homo faber” into “homo digitalis”. Viessmann will never be Nest if we have the fastest fibre connections but lack the smartest minds. That’s something we have to work on.
Every morning a great many of us entertain Germany’s future on the back seat of our cars - the children we drive to school.
But do our school curriculums prepare our children for the digital future? Not anywhere close to the extent that schools in other countries do. We have to change this. Digitalisation should be part of every curriculum. Coding should have the same subject status as second language classes.
So does everyone have to learn how to be a programming expert?
Of course not. But they’ll need some basic programming skills to navigate the digital world, as well as “homo digitalis" character traits. We have to teach our children to be team players instead of lone wolves. To be creative instead of narrow minded. To embrace spontaneity instead of simply learning things off by heart.Let’s teach our children to be exponential agile thinkers - because our future will depend on mental agility. Most of all though, let’s teach them how to make mistakes. Because mistakes are only mistakes if you don't learn from them, especially in German classrooms.
By 2025 VC should have to look for startups - not vice versa
Startups in the USA have three times more venture capital available to them today than their German counterparts. And the country only has four times the population of Germany. The startup situation in Europe is even bleaker. Germany invests less in startups than the United Kingdom or France – even though we’re around a third larger than our neighbours. This is a fatal development because the really good ideas aren’t coming from major corporations these days, they’re coming from small businesses.
That’s also why many of these good ideas find their way abroad in German entrepreneurs’ luggage. Destination:Palo Alto, USA. Because that’s where the money is.
Let’s get corporations, government and venture capital providers to sign a startup pact in which we all undertake to do far more for our own country’s future enterprises, to make more funds available to startup founders and in which every major corporation agrees to mentor at least one startup and make it a success. We could turn Germany into Europe’s number one venture capital nation. And number two worldwide. It would mean a major boost for Germany – for both the startup community and the economy.
From “Made in Germany” to “Coded & Engineered in Germany”
I firmly believe that if we take the right action now, “Digitalisation 2025” won’t be a problem, it will be an attitude. We can create a culture that emboldens us. And Germany won’t just have gone through a digital revolution, it will have gone through a digital evolution. An evolution that safeguards our country’s wealth and prosperity for the future – and represents our own roadmap.
We’ve followed this German roadmap once before...
...when we put our own stamp on capitalism with the social market economy. Back then in the 60‘s, German chancellor Ludwig Erhard united the best of both realms of society. He tamed the dog-eat-dog capitalists and held the socialist planned economy at bay. He engineered the economic miracle: a prosperous and just social order for this country.
We can’t achieve another miracle if we stand by and watch because we're intimidated by the supremacy of the continent at the other side of the Atlantic. Simply copying the USA isn’t a solution either. It’s the greatest compliment you can pay, but copies are never as good as the original. 70 years ago we combined two realms and made the best out of both worlds. There's no reason why that can’t work again.
Let’s engineer a new and successful model for our society. A kind of “digital social market economy”.
And let’s encourage everybody to get involved in creating it because we're going to be spending the rest of our lives in the future, so it’s worth thinking about it now.
