Germany's new data strategy faces challenges

In Germany, 90% of individuals' digital data is not analyzed. That's according to Helge Braun, Chancellor Angela Merkel's chief of staff, who launched Germany's new "data strategy" this week — which aims to change this.

After a delay of over six months, the long-awaited policy is an ambitious paper made up of more than 240 individual measures spelled out in a hefty document of 120 pages.

The fine print may be complex but the goal is clear: In the final year of her chancellorship, Merkel's government wants to make Germany a "pioneer of digital innovation."

Braun described the paper as a "road map to a future in which we use data responsibly and innovatively." To this end, the policy identified four areas of focus. But experts say that in famously privacy-focused and technophobic Germany, there will be challenges in achieving each one.

Germany pledges 'breakthrough in data infrastructure'

The key practical aim of the policy is to expand data infrastructure both in Germany and abroad.

In a discussion on the Clubhouse app, Digitization Minister Dorothee Bär cited the Franco-German GAIA-X cloud project and the development of new high-performance computing systems to allow increased data cooperation between different federal, state-level and local agencies in Germany. Another example in the proposal is a nationwide cancer registry, the first of its kind in Germany.

"The ambitious infrastructure goals are quite positive," media law expert Christian Solmecke told DW. "Particularly during the coronavirus pandemic, many authorities, especially public health departments, are reaching their limits in terms of digitization and data innovation."

German Health Minister Jens Spahn earmarked €50 million ($60 million) for the digitization of the health sector in 2020 to try to avert this problem.

But Germany's federal system continues to be a barrier, as around 400 local health authorities have responsibility over collection of data — and autonomy about what kind of technology they use to do so.

"The strategy does address the important topic of improving data infrastructure," said Dirk Hofmann, the co-founder of German-Finnish data innovation and artificial intelligence consultancy group DAIN Studios. But he also pointed out: "What is missing for me [in the policy] is the question of 'how' this transfer will take place for authorities and companies."

'Increase in responsible data use'

The policy paper also aims to tackle one of the biggest obstacles for Germany in data innovation: a lack of trust. Many parts of German society remain slow to adapt to modern technology and data usage, because of fears around irresponsible data collection and privacy concerns. For example, a 2017 EU study showed that only 17% of Germans would choose a card payment if a cash option was available, by far the lowest percentage in the eurozone.

"We understand that our data protection standards are extremely important to us," Bär told the dpa news agency, adding that in Germany data usage by private companies and the government alike is regarded with "fear" and often has "negative associations."

Four years after the EU's General Data Protection Regulation (GDPR) was introduced, aiming to standardize data protection laws across the bloc, Solmecke believes the paper finally might see Germany lead the way in standardizing data security regulations across the EU.

"The German government wants to drive forward the harmonization of the level of data protection at EU level," Solmecke said. "In addition, the anonymization and pseudonymization of data will be increased."

But Markus Beckedahl, a media expert and the founder of German digital-freedom blog Netzpolitik, believes that the policy will struggle to reach ordinary citizens. He wonders whether the government will succeed in calming their legitimate concerns over data security.

"The data strategy is primarily an economic policy paper," Beckedahl told DW. "The German government still does not recognize the enormous potential of the digital civil society in Germany, which, with a little more funding and support, could create some really cool things."

Establishing a 'data culture'

Despite Beckedahl's misgivings, on the surface the strategy appears committed to engaging with civil society as well as businesses. An important goal is the creation of a German "data culture." Braun, Merkel's chief of staff, compared data literacy in civil society to "learning your ABCs."

In 2020, Germany was ranked 12th in digitization progress by the European Commission out of the then 28 EU countries, behind countries like Finland, Denmark and Estonia. Europe's largest economy only narrowly made it into the top 50%.

So Germany may have a lot of catching up to do. Digital consultant Hofmann, who works with customers in Finland and Germany, told DW there is a big difference between the two.

"When I compare our customers but also the general population in terms of data literacy and the level of digitization, I see a gap here in terms of data maturity of about two to three years. And this can also be seen in terms of trust in data in all areas of life," Hofmann explained.

But lawyer Solmecke believes the strategy could turn this failing around.

"One of the goals of the data strategy is to launch a national digital education campaign in February to expand teaching and learning opportunities on key digitization topics," he said. "The German government is also explicitly committed to strengthening the interests of citizens in the data economy."

Making Germany a 'global pioneer'

Some of the goals in the strategy may well be achievable, although difficult. But the headline promise remains highly ambitious — to make Germany a world-leader in data usage. Digital freedom expert Markus Beckedahl is skeptical of this pledge.

"Germany always wants to be a pioneer in something to do with digitization. However, the topic should have been taken more seriously much earlier," he said. "Although the data strategy of 2021 is finally a sensible and largely good strategy in the right direction, it could come five to 10 years too late to mean Germany can take on a pioneering role."

And the strategy's success is no longer a niche issue. "Right now [in the pandemic], we are noticing how important and necessary, almost existential, a new data strategy is in Germany," said Solmecke. That's something Helge Braun also acknowledged.

Data consultant Hofmann said he is "optimistic" that Germany can belatedly become a global leader in utilizing data, but said the goal needs more focus.

"Data innovation needs a clear target," he said. "Only then can we judge whether we are making progress here and only then can we ultimately measure whether we have a pioneering role or not."