The joke has more than a kernel of truth to it. During the Covid-19 crisis, health authorities infamously still relied on fax to collect data like PCR-test results and hospitalisation rates, resulting in constantly outdated statistics and chronically underinformed decision makers. It was a symptom of a broader sclerotisation of Europe's economic engine. Industries that have long been led by German ingenuity and organisational talent – automotive, machinery, logistics –, are now facing digital disruption. Not long ago, German inventors were at the forefront of technological innovation, from automation to safe nuclear technology. German carmakers developed many of the ‘smart’ assistance systems that come with today’s cars, yet they might soon find themselves being overtaken by Tesla’s autopiloted cars. Digitalising Deutschland doesn’t seem able to get going.

Late Adopter

While Germany is well positioned in 5G, fibre optics is only slowly being deployed, indicative of reluctant government: mobile service providers can easily update their cell-tower hardware, but opening up roads to lay cables is dependent on public investment. There’s constant talk of ”Digitalisierung“ in public discourse, and of course, Germany even has a ministry of digitalisation–or to be precise, there are over a dozen ministries dedicated to the task, due to the state’s complicated federalist system. To some, Germany’s governments seem to be incapable of adapting the country to the digital demands of 21st century societies. Perhaps, however, it is not so much incapability as unwillingness. German politics has, for many years, been preoccupied with other agendas.  Hundreds of Billions of euros have already been funneled into projects like mass immigration or the ”Energiewende”—an effort to beat the laws of physics and run Germany’s entire industry solely on solar and wind. Migration costs Germany 25 to 30 billion euro per year in direct expenditures by the federal government and the states, and German Energiewende has been financed with 500 billion euro in 2018–2025, most of it as subsidies for electricity producers, not building infrastructure. In contrast, a total of -60 billion euros was spent on the digitalization of public administration between 2019 and 2023. 3 billion euros are planned to be invested into the expansion of broadband internet in 2025. Meanwhile, other countries have invested in their digital infrastructure, laying down fiber optics, deploying 5G, digitalising their governments, bureaucracies and health systems,

But there is yet another reason for Germany's reluctance in embracing 21st century high tech: its culture. There exists among many Germans a deep-rooted suspicion against modern technology. They tend to see risk very clearly, some could argue to the degree of being paranoid about it, but less  so opportunity. Fear of technological catastrophe—one expression of German Angst—fed into  decades of German protest against nuclear energy. And it’s not only nuclear, which Germany hastily abandoned, fearful of the specter of another Fukushima. German technophobia extends to the entire spectrum of cutting-edge high tech that will define the next half-century. It is hard to see how under such conditions the pivotal NBIC-technologies of the 21st century—nano, bio, info, and cogno—can find a home within Germany's borders, as long as German policy makers adhere to the principle of precaution: But that might just be the wrong strategy in a time when agility and speed are crucial. Consider, for example, autonomous driving. It’s the future of the automotive sector, the very heart of Germany’s industry. But due to safety and ethical concerns, German car makers can’t test and roll out their cutting edge technology as easily as its global competitors.

Regulatory Zeal

There exists a detrimental synergy between Germany's ambivalent relationship with technology and another well-known German trait: the penchant for bureaucracy and regulation. Consider, for example, how cryptocurrencies, currently the most interesting and exciting applications in the interplay of tech and finance, are handled. Germany's financial markets authority BaFin has created one of Europe's most complex regulatory frameworks, intending comprehensive consumer protection and market stability. But the legal and bureaucratic hurdles for operating crypto services in Germany are comparably high, discouraging entrepreneurs and innovators, who prefer more favourable conditions in Switzerland’s crypto valley instead. Another example is Germany’s health care system—the sick man of the country—whose bureaucratic and regulational complexity has grown over many decades. Digitalisation is meant to be the remedy, but is itself challenged by those very hurdles of bureaucracy, federalism, and data protection concerns. The digital patient file, discussed for many years, is now finally rolling out, but is rejected by many Germans for reasons of privacy. Digital communication between medical practices, hospitals and insurance companies has been worked on for a long time, but in practice suffers from many standards, data protection obstacles, dysfunctional equipment, and poor usability.