How to Fix the Future by Andrew Keen

Author:Andrew Keen
Language: eng
Format: epub
Publisher: Atlantic Books

Winning the Second Half

I arrange to meet Schumacher in Cologne’s Cathedral Square, the civic space dwarfed by the city’s Gothic Dom, Germany’s most visited landmark and the largest church in northern Europe. Constructed predominantly between 1248 and 1473, the Cologne Cathedral, which boasts the largest facade of any church in the world, was finally completed only after the unification of Imperial Germany in 1880. This World Heritage site, therefore, is a testament not only to Germany’s engineering heritage but also to the country’s rich history in the reengineering of long-term collective projects.

This reengineering culture, while certainly not unique to Germany, is, nonetheless, a persistent historical feature of Europe’s most populous and prosperous country. Germany’s economic accomplishments, particularly in the late nineteenth century, were mostly based on its reengineering of the earlier, haphazard British industrial revolution with cutting-edge technology and planned investment in factories, infrastructure, and scientific research.

Today a similar kind of narrative seems to be shaping Germany’s unfolding role in the world’s digital economy. “Does Deutschland do digital?” asks the Economist about the world’s leading engineering economy. In 1995, the response would certainly have been no; today, however, the answer is less clear. As the Deutsche Telekom CEO Timotheus Höttges admits, “The first half of the battle to master the digital world was lost.” So the question now, Höttges says, is “How do we win the second half?”3

It’s certainly an important question. The German business consultancy group Roland Berger estimates that the German economy will lose 220 billion euros of annual value if it fails to successfully transform itself digitally.4 Today, only four of the world’s 174 unicorns—privately held companies like Uber or Airbnb that have a valuation of more than a billion dollars—are German. Every key German manufacturing sector—particularly its 361-billion-euro automotive industry, which makes up 20 percent of total German industrial revenue and employs more than 750,000 workers—is now vulnerable to the revolution of the internet of things, with its billions of connected devices flooding onto the market each year. Fifty billion of these smart things by 2020, according to Cisco. And many more billions throughout the 2020s and 2030s. So what Germans call Industrie 4.0—the fourth stage of industrial evolution after water and steam power, mass production, and the information technology revolution—is of vital importance to the future of the world’s leading engineering power. Even German chancellor Angela Merkel speaks regularly about the need to digitalize Germany’s Plattform-Kapitalismus. “This period will determine the future strength of the world’s leading industrial centers,” Merkel said in April 2016, expressing her angst about winning the race to dominate the digital landscape. “We have to win this battle.”5

So how can Germany win the second half of the digital game? The answer probably lies in the country’s historical tradition of successfully reengineering technological revolutions begun elsewhere. As Christoph Keese, the author of Silicon Germany, notes, “Germany’s great strength is evolutionary, incremental innovations.” So even in the first half of the digital game, when Germany all but failed to get on the scoreboard, its most notable success lay in the replication of Silicon Valley innovation.

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