The German Federal Government's new AI Strategy – future-proofing the German economy

Artificial intelligence is a technology that is becoming conceivable or is already being used in more and more areas. It is no secret that it will lead to immense changes not only within companies and production processes, but also when it comes to the living and working environments of practically anyone. Many of the impacts artificial intelligence will have cannot be foreseen at the current stage, and the European and global landscape of vendors in this area is growing rapidly (see e.g. PAC's latest AI market report). It is therefore more important than ever for businesses, the society, the government and politics in general to keep an eye on emerging trends and to ensure to be working in unison to define the ethical, legal, cultural and institutional cornerstones to steer developments in the right direction.

In view of this, the German Federal Government published its AI Strategy a few days ago. The central goal is to make Germany one of the leading countries for the development and use of artificial intelligence in order to secure the country's global competitiveness in the future. "AI made in Germany" is to become an international trademark for modern, safe AI applications of public interest.

By 2025, the government plans to invest three billion euros in the strategy's implementation. For example, the promotion of young scientists and teaching in the field of AI will be supported by the creation of at least 100 additional professorships. More money will also be made available for entrepreneurship and start-up funding. The landscape of already existing AI competence centers is to be expanded and developed further into a national network for application hubs. In addition, it is intended to set up a German AI observatory to pursue the distribution and impact of AI, which will focus in particular on changes in work environments but also on social interactions.

Another focus lies on European cooperation: it is planned to create a European Innovation Cluster on AI and, together with France, to promote the establishment of a Franco-German research and development network. The development of AI observatories on a European and international level is supported, too, in order to benefit from knowledge exchange.

Due to the importance of small and medium-sized enterprises (SME) for the German economy, the AI Strategy pays particular attention to creating specific offers and framework conditions, so that SMEs in Germany can benefit from the development and use of AI applications. It is important to bear in mind that the development status of AI varies greatly between companies. On the one hand, we already see autonomous vehicles based on sensors and AI operating in warehouses, visual quality inspection taking place via video imaging and AI or the use of AI for predictive maintenance concepts to avoid unplanned downtimes of production assets. On the other hand, our discussions with SMEs in the industrial area show that what is urgently needed is the relevant know-how and capabilities in the fields of data capturing, provisioning, analytics and management as well as knowledge on how to develop the appropriate algorithms. Moreover, another major challenge seen by quite some SMEs is the unclear legal situation.

From our point of view, the creation of the AI Strategy is an important step in the right direction. Even if the sum of investments ends up being only in the range of 500 million euros p.a., this is still more than other European countries provide. However, a couple of questions remain: For example, the number of AI experts in both science and industry being scarce, the creation of 100 professors in this field seems quite an ambitious goal – especially since the private sector offers better salary conditions in most cases. In addition, as regards strengthening SMEs the strategy talks about “new ways being explored” to improve the transfer of applied AI knowledge between research and business in a holistic approach. What this is to look like in detail is, however, not (yet) specified. Particularly in view of small companies often still lacking basic knowledge about AI.

Quite generally, the still rather vague projects here and there must now be followed by the formulation of concrete steps. The Digital Summit (Digitalgipfel) of the Federal Government taking place in Nuremberg from December 3-4 could offer an opportunity to provide additional details on the concrete measures of the AI Strategy.

AI will, of course, remain a major topic of PAC’s ongoing research and will be covered in many of our market reports in 2019.