Technological innovation and the German SME sector have still not really come together. Why is it that so many German companies shy away from making the necessary investments and seem to feel comfortable, to exaggerate somewhat, in the IT Stone Age?
As early as 2021, a KfW study found that these companies were spending far too little on digitalization in an international comparison – at that time, investments of double or even triple the amount would have been necessary to catch up with the leading nations. This did not happen, and so there was no improvement in the international rankings in 2023 either, with Germany continuing to lag behind in 23rd place. This is not good news for an economy that is competitive in itself and is largely based on a high-turnover SME sector. So why is it that so many German companies are reluctant to make the necessary investments and seem to feel comfortable, to put it rather exaggeratedly, in the IT Stone Age?
On the one hand, most companies still have functioning IT systems that perform well in day-to-day use and do not appear to need replacing with more modern solutions. Never change a running system? A piece of wisdom that can quickly turn into a very costly problem in the fast-moving IT world. Because the problem is not the free fall, but the impact. This threatens when neglected and outdated software has reached the limit of its resilience and maintenance costs go through the roof.
It gives the impression that many SMEs in particular are only actively looking for a solution when the child has already fallen into the well – a fatal strategy. Innovation and progress are decisive drivers on the national and international market, and those who cut corners here are ultimately saving themselves into insignificance. Countries that invest heavily, such as the USA or Denmark, have already internalized these market rules to a greater extent and are investing the necessary money. The problem is well known in Germany – as digitalization pacts and corresponding laws show. Without the urgently needed investment, however, they remain mere lip service. The past has already shown several times what can happen to companies that ignore the signs of the times and miss out on crucial changes – just think of names like Quelle, Kodak, Blackberry or Nokia.
There is therefore an urgent need for action. In addition to investing in new software, IT systems and infrastructure, the existing ones also urgently need to be brought up to date, as vulnerability to cyber attacks in particular is already a drastic problem in Germany today – and the trend is rising. The first step is therefore to plug security gaps, update applications and introduce processes in order to maintain the quality of the software in the long term.
This work is comparable to the construction of roads and bridges, which have to be regularly overhauled and repaired – not just when cars can no longer drive on them and everything comes to a standstill. In addition, there is practically no alternative to investing in new technologies, especially AI. The attitude that “things are still going well” is a dangerous game with fire that will cause lasting damage to Germany as a business location in international comparison. Instead of the tried and tested, we need a spirit of optimism, the energy and confidence to invest in new solutions and to really make use of technological progress. To achieve this, companies need managers who embody these virtues and have in-depth knowledge of IT and digitalization – and of course the will to develop their company with advanced technologies. Because technological stagnation will not get us anywhere. So let’s focus on the future and not cut back on the foundation of what drives companies: technology.
This press release is also available at www.pr-com.de/de/avision.
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