Covid Crisis Has Accelerated Progress

Thomas Jarzombek, the Ministry for Economic Affairs’ commissioner for the digital industry and start-ups, says that despite the severe downturn resulting from the corona pandemic, many start-ups have rallied. Furthermore, some new businesses are directly profiting from the new realities created by the crisis demands.

October, 2020

How has Covid-19 affected digitalization in Germany?

Covid-19 illustrated that in times of crisis the economy relies on digitalization to keep going. Therefore, it accelerated some long-standing debates, for instance on data security and on whether digital projects have to be understood by everybody before finally getting the go-ahead.

In every organization you have both those who promote digital progress and those who would rather leave things as they are. Covid-19 has strengthened the former group.

Will this momentum be sustained?

One major hindrance to digitalization in Germany is the over-¬emphasis on data protection. It remains to be seen whether the marked shift to a pragmatic hands-on approach we have witnessed during the pandemic will last. Businesses and other organizations will likely keep on using video conference tools to cut down on business trips and physical conferences even after the crisis has ended.

What’s the outlook for e-learning?

E-learning is certainly a good example of a key sector hampered by an exaggerated emphasis on data protection that has gained momentum due to Covid-19. E-learning is much more than remote home learning during school closures. It’s worth asking whether a teacher is always needed to motivate students or whether teaching could perhaps be done by digital content delivered through certified platforms – particularly for STEM subjects and IT, for which we have a dearth of teachers. Teachers would still be physically present in the classroom but shift to more of a coach-like role.

Does Covid-19 present more opportunity or risk for digital start-ups?

Covid-19 has been the cause of a serious economic downturn, increasing the risks for business in general. There is one category of start-ups that had promising technology to offer but no revenue when the pandemic hit, and there is another category of start-ups that were already expanding.

Then, there is the third category spanning start-ups that are directly profiting from the crisis, such as platforms for home delivery and telematic work. While now might be just the time for them to grow, they may find investors are growing wary of commitment in the face of the economic downturn. These three categories are covered by our two-billion-euro aid package, launched in April, which bears 50 percent of the risk of investing in Germany-based start-ups.

Has Covid-19 been accelerating the rollout of digital infrastructure?

In early June, the governmental cabinet committed EUR 5 billion to building a nationwide 5G network by 2025. Much of this will focus on the countryside, which is crucial given that many small and medium-sized high-end manufacturers are based in the rural corners of Germany.

We have implemented a regulatory framework for 5G campus networks that allows individual companies and organizations to set up their own 5G infrastructure in places that are not completely covered by the telecoms. This is a unique regulatory approach by global standards and makes the 5G rollout much quicker and more targeted.

Foto: Thomas Jarzombek / © Tobias Koch