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Study: Germany continues to fall behind in digital competitiveness

Study: Germany continues to fall behind in digital competitiveness

Study: Germany continues to fall behind in digital competitiveness

The coronavirus crisis has hurriedly digitised everyday life in Germany - people now work from home, teach via Zoom and do their shopping online - but digital progress in the federal republic is still sluggish. According to a new study, Germany is falling way behind the global competition.

Germany performs poorly in Digital Riser Report 2020

Despite all of its political commitments to digitisation, Germany is still far from leaping into a new digital reality. According to the latest “Digital Riser Report”, compiled by the ESCP Business School in Berlin, Germany is performing particularly badly in comparison to other industrialised nations. Using data from the World Economic Forum’s “Global Competitiveness Report”, the study analyses and ranks the changes that countries around the world have seen in their digital competitiveness over the last three years. 

Perhaps unsurprisingly for a country that is regularly mocked both at home and abroad for its lack of tech-saviness, Germany did not fare well. Within the G7, Germany ranked second to last, losing 52 ranks over the past three years; only Italy performed worse (-77 ranks). The federal republic also came off badly in the G20 comparison, landing alongside Italy and India (-173 ranks) at the bottom of the list. 

Compared to the ranking’s frontrunners, Germany lags behind in particular when it comes to the country’s “digital ecosystem”. According to the study, venture capital is less readily available for start-ups in Germany, and at the same time the costs of starting a business are higher. There is also a lack of sufficiently-qualified specialists. 

France and Saudi Arabia top Digital Risers in 2020

Overall, France has made the biggest leap among G7 countries in terms of digital competitiveness, rising 95 ranks. The biggest climber among G20 countries was Saudi Arabia, which climbed a full 149 ranks - thanks in part to the Saudi government’s recent 500 billion-dollar investment in “Neom”, a new Silicon Valley-style city on the Gulf of Aqaba. 

According to the study’s director, Philip Meissner, these top performers have one thing in common: a clear strategic plan, the money and the will to implement it - something which is patently lacking in Germany. “If we stand or walk slowly while everyone else is running, that’s a problem,” said Meissner, pointing out that future technologies are not high up on the political agenda in Germany. Too much is being managed and too little is being invested, he argued. 

Manuel Höferlin, digital policy spokesperson for the FDP, added that the bureaucratic, lengthy coordination process in Germany also impeded digital competitiveness. Without a higher-level authority to coordinate and take responsibility for the implementation of digital projects, “Germany will never catch up,” he said. 

The ranking also revealed a clear dynamic between two of the world’s biggest digital superpowers: while China has gained significantly in digital competitiveness over the past three years, the USA has lost out, falling 33 ranks. According to Meissner, the USA has lost out because the digital skills of the population have deteriorated - and it has become harder to attract skilled workers from abroad under the presidency of Trump. 

For the full ranking and a detailed breakdown of the scores, visit the Digital Riser Report website.

Abi

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Abi Carter

Abi studied History & German at the University of Manchester. She has since worked as a writer, editor and content marketeer, but still has a soft spot for museums, castles...

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