Germany Moderately Attractive for Companies Using Artificial Intelligence


AI location Germany still has significant room for improvement among surveyed companies in a country comparison, according to the results of a survey conducted by ZEW Mannheim on behalf of the German Federal Ministry for Economic Affairs and Energy.

A more powerful IT infrastructure and government funding options would encourage more companies to use artificial intelligence (AI) applications. The main obstacles preventing companies from making greater use of this technology are the high development and implementation costs and the lack of skilled workers. The companies surveyed still see significant room for improvement for Germany in terms of AI in comparison to other countries. These are the results of a survey conducted by ZEW Mannheim on behalf of the Federal Ministry for Economic Affairs and Energy among more than 950 companies actively using AI or with a potential to use AI.

According to the survey, 46 per cent of companies are more likely to introduce AI applications if a more powerful IT infrastructure is in place. In addition, 44 per cent of companies rate government support for AI solutions as a significant factor in mitigating the risks and uncertainties associated with their introduction. “The availability of data from public sources, the level of public awareness, further training opportunities for employees and adjustments to data protection, on the other hand, are not among the factors that inhibit the adoption of AI,” explains ZEW economist and author of the study, Dr. Christian Rammer.

Costs and skills shortages slow down greater use of AI

A key challenge for companies that are already actively using AI are the high costs associated with developing and implementing this technology. 46 per cent of respondents see this as a major obstacle to greater use of AI technology within an organisation. “This is especially true for young and small companies and those using less mature AI applications. At the same time, business partners often lack investment budgets to jointly implement AI solutions,” says Rammer. 47 per cent of the companies surveyed see this as a major obstacle and wish for better financing conditions. In an international comparison, the respondents perceived this as one of Germany’s main deficits with regard to AI. 73 per cent of the companies rate the financing conditions in other countries as significantly better.
For companies that use AI, the shortage of skilled workers also inhibits a greater use of AI, with 84 per cent of companies citing this as a limiting factor. “Companies assess the supply of skilled workers with AI skills to be less good than in other industrialised countries. 57 per cent of those surveyed gave Germany a poor rating in this regard,” says ZEW economist Rammer. In addition, a powerful IT infrastructure is also important for companies that are actively using AI solutions in order to make Germany more attractive in this regard.

Germany has room for improvement in terms of AI

In an international comparison, Germany scores well in terms of security and data protection: 57 per cent of companies using AI say that data security is better than in other industrialised countries. 45 per cent of the companies rate the regulations in data protection as particularly positive and 29 per cent as comparable to other industrialised countries.
When it comes to data availability and the use of external data, however, the study paints a different picture: 62 per cent say that Germany compares less favourably with other countries in this respect. Generating more trust in AI solutions as well as increasing public awareness about the benefits of AI applications are seen as important measures by 58 per cent of the companies surveyed. This is also where Germany performs worst internationally. “Our study shows that there is indeed potential for companies that have not yet actively used AI to get started with AI applications. Both companies that use AI and those that do not would like to see more government funding and an improved IT infrastructure. This would significantly increase the attractiveness of Germany for businesses using AI,” says Rammer.