This article appears to simply be UK propaganda to convince UK citizens not to copy German regulation. The argument seems to be that they are addicted to older industry and thus their economic growth (dubiously but traditionally measured via GDP growth) is slowest among the G7. They list other countries like France and Italy that arguably are similarly attached to older industy but the article doesn't analyse this apparent contradiction since presumably it doesn't further their agenda.
Meanwhile I (an EU resident not residing in Germany) am using a German digital bank, a German digital broker, but a Swiss replacements for a lot of google services. I am a bit reluctant to do business with UK digital services and definitely see it as a negative when I am shopping around among alternatives because EU regulation has been a boon for me personally when dealing with companies behaving poorly. While EU regulation surely prevails when UK businesses sell to me, I'd just rather skip them.
Well, an explanation that uses the word propaganda in the first paragraph has likely an agenda as well. Have you been listening recently while you reside in Europe? Germany has so many problems, its no longer funny.
> The US and the UK have 5.22 AI startups for each 100,000 inhabitants; Germany has 1.9
It’s cute when journalists try to do things with numbers. This is a very weird sentence. Firstly, what is number of AI startups per capita a metric of? Some AI startups are more important than others.
Secondly why are US and UK lumped together? I assume they don’t each have precisely 5.22 AI startups per 100k inhabitants, so is this the combined total of their populations? Why combine those two countries? Why not combine US and Canada, or UK and France, or US and Japan?
> what is number of AI startups per capita a metric of?
A ratio of the number of startups and a certain amount of people. It definitely shows that founding a startup in Germany is not as easy as in other countries.
It definitely does not show that, it's just a number and you're interpreting it. But other interpretations are just as valid, e.g.
- Germans founding less because they're more risk-averse
- having less AI startups because other types of companies are founded more often
- Less wish to found because of a strong job market that gives you excellent jobs with decision power/money/whatever it is you seek in founding yourself
- People have more families and don't want to quit their current jobs
I probably could come up with more. Is it a hassle to found a new company in Germany? Sure. But I've found that for people who do want to start something, that's not a showstopper. Personally, I would attribute low startup numbers to cultural risk aversion of Germans
> I would attribute low startup numbers to cultural risk aversion of Germans
Which is literally one aspect of how easy or hard it is to create a startup and get it somewhere. Can't fire people quickly enough since market is changing daily? Well it will be a nightmare for the owners to become or remain relevant enough to stay afloat.
I am not bashing EU just to be clear, having more job stability has tons of long term positive consequences on population's mental state and 2nd and 3rd order positive effects (the usage of various 'mental' medication in US seems to be ridiculously high compared to 3 countries in Europe I've lived in for example), but good environment for agile fail fast startups it ain't.
In Germany specifically, but I'd guess it applies to most other countries as well, these strict rules apply once you have 11 employees. A lot of startups work with contractors anyways. And you can always fire people if your company needs it to survive.
As far as I'm aware, California has some of the strongest labor protection laws in the US, yet lots of startups. There's clearly more factors involved than labor protection laws, e.g. VC money, culture, etc.
Sure, stronger labor protection might be a result of cultural risk aversion. But I'd be very hesitant to call it "literally one aspect of how easy or hard it is to create a startup and get it somewhere"
I didn't say its the only aspect, just one of key ones. Bureaucracy must be another critical aspect, one reason why ie France or Italy are literally centuries behind with very little to no hope to ever catch up given its population priorities.
I agree with what you say, SV culture and sheer amount of startup-compatible talent plays a massive role too. Its a momentum that would take half a century of dedicated effort to even catch up.
The thesis of the article is broadly correct but the reasoning it uses to get there is questionable.
Every country has its quirks. The US has a very high cost of living and consequent high salaries. No wonder it’s important to be able to fire workers quickly. The high wages are also more than balanced by the amount of capital available.
In Germany it’s harder to fire workers but they also get paid a fraction of their counterparts in the US, so there’s not such a rush.
I wouldn’t start a startup in Germany either, because of the insane dysfunction of German bureaucracy. The money is not even a factor when dealing with the system is already such a pain.
It doesn't necessarily show that at all as an isolated statistic - it could be telling us that Germany has less people who are convinced an AI startup is a sensible business decision, or any other number of population based factors
What a stupid article. Their benchmark for digital relevance? The number of AI startups... Sure, Germany has had less recent growth than any other G7 member - but it is also among the highest GDP per capita of the G7, highest GDP in Europe, and 3rd highest in the world.
Where are you getting that Germany has the third highest GDP per capita in the world? IMF https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... puts it at 18th in nominal GDP per capita and https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)... puts it at 21st in purchasing-power-adjusted GDP per capita. And in Europe, Luxemburg, Austria, The Netherlands and Ireland have higher GDP per capita according to those lists, as do Sweden, Norway, Switzerland and Denmark if you consider them part of Europe.
Well non-per-capita GDP is useless as a measure of living standards because it's primarily determined by population size. China has the second highest GDP in the world but the GDP per capita is less than half of most European countries and the average person's standard of living is significantly worse.
Germany's GDP per capita is notably lower compared to the USA: $85,373 vs $54,291. Additionally, the USA has experienced real growth, while Germany’s growth has been around 0% for the last four years. Even Russia, despite facing significant challenges, has seen 3.5% growth compared to Germany's 0.1%. It’s concerning that Germany's economic performance lags behind a country under such heavy sanctions.
The article compares it to others in the g7. In the g7, Germany has the 2nd highest GDP per capita.
Its not really fair to just measure the last 4 years. Thats penalising germany for preserving their economy throughout covid. It has done no worse than the other (non-usa) g7 members since 2019, despite its energy crisis.
Im not sure why you are comparing to germany to russia - a country with less than a quarter of Germanys GDP per capita. If thats the game, just look at how the USA compared to Niger - a low HDI nation.
russia has massive natural resources. No, to rephrase it - absolutely MASSIVE resources, even on stuff west desperately need for advanced tech like aerospace. Even if they have to sell it under the price, they can be ineffective with mining and still keep finding it all over their massive country.
Plus they switched to war economy last year showing some long term dedication to fuhrer's plan to conquer as much of Europe as possible - remember what happened to US economy during WWII?
Absolute numbers matter but growth m, or lack thereof, also matters for the future. If the economy isn’t growing it’s actually shrinking due to inflation.
Sure, but you cant take a SINGLE YEAR and extrapolate that for the future.
If you look at the previous year Germany had 20% more growth than the UK - which they tout as having more than 2.5x the AI startups.
If you look at growth since pre-covid times the German economy has grown at the same rate as the UK - even accounting for the Russian energy crisis, on which Germany was HIGHLY dependent. Germany has been mostly stable throughout, while the UK was hit hard through COVID and has simply recovered.
Major European countries are encouraging high immigration to boost overall GDP numbers but the result is higher population growth than GDP growth. Ie. GDP per capita is decreasing and hence, in reality people are getting poorer.
For instance, it seems that Germany's population grew by more than 0.4% in 2023 (between 0.5 and 0.8% from what I can find online)... Certainly, in the UK's case the GDP growth is only due to the frantic influx of people but GDP per capita is going down.
I live in Germany since a few years not and I find so sad to see that they do not have any interconnected services and that there is so much red tape for everything.
The different health suppliers are not interconnected so they cannot send even the most basic things digitally, everything is posted to you and you take it to the other supplier.
It is not uncommon to receive CDs for x-rays or similar to take to another specialist. Makes you cringe.
And do not get me started on internet connections!
> It is not uncommon to receive CDs for x-rays or similar to take to another specialist. Makes you cringe.
As a counter point I have (in multiple industrialized countries) asked for DICOM files of my exams (following past injuries) to keep with me, since I changed countries a far bit. I always got confused shoulder shrugs from staff since there is never a "procedure" to safely share it outside their PACS.
At best I only got grubby screenshots in a pdf report, and only once I got a physical CD because I had a bit of small talk with the Radiography Technician directly.
I am not saying Germany is great but there is absolutely value in having physical offline storage of your data.
> It is not uncommon to receive CDs for x-rays or similar to take to another specialist
Funny, as when I had to be admitted in germany (I was on vacation there), the German staff was saying how backward NL was for having to send a dvd with x rays instead of just emailing it encrypted.
As an open question when are CD’s the best way to store data? X-ray scans with high resolution and high bit depth take up a lot of space though they are accessed infrequently and always in the full. For a 12x18 600 dpi scan with 64 bit depth is 0.6 GB. If these are tomograms and you need a stack of 1200-2000 then we are talking about a lot of data to store for several years to be accessed twice. A CD is not a bad choice for durable storage.
- I made an appointment online for sports medicine. Doctor says I need an xray - I go across the street and provide my insurance card, all digital. Go back to the doctors office and he's got it on his computer already
- All contract with insurance (TK) is digital and per app
- Probably only applies in big cities, but in Berlin I have 1Gbps internet for 30 euro a month
TK works well (and I like it), but it's an exception in Germany. Most things are really analogue. Less than a year ago you still had to get a printed sick note.
The price of internet also seems to be a kind of promotion, with 1Gps costing twice as much on average.
> the new growth sectors – smartphones, electric vehicles, artificial intelligence (AI). An analogue world is rapidly going digital, and Germany has been painfully slow to realize that
There is an important silver lining in being "slow". You learn from the mistakes of the "fast" ones.
You don't need to look too deeply in the "move fast and break things" tech sector to see not just mistakes but major disasters: destroying people's privacy and agency, historically unprecedented power concentration, rampant regulatory arbitrage, demolition of important sectors such as journalism etc.
The real issue is that Germany (as key actor within the EU) has been for some time paying lip service to an alternative, less dystopic "digital world", but not delivering.
Cars are the key industry in Germany and similar to the US albeit in a less extreme manner moving towards premium combustion cars has Germany caught in a local optimum which is now shrinking due to external change.
Investing in AI is not going to fix that manufacturing restructuring problem in Germany. Nor will asking an AI to write superficial feel good articles for British readers where manufacturing problems are endemic, the Brexit transition and solving the over dependence on Londons financial ‚industry‘ is far from a solved issue.
A big issue with Germany's car industry is that it is slow to adapt and innovate and so now faces being hit by competition from China. Slow pace of change and adaptation is perhaps something also at play with AI.
Seems like Germany is having this problem for the past 20 years... but here we are. Maybe accept the fact that they are a manufacturing powerhouse and will remain so in the foreseeable future?
1. Several years of lower growth, after years of higher growth, can have many causes. Many might be temporary, or reflect nontrivial time dynamics between growth factors & their results.
2. The digital transition was long in place before 2018. So that linkage looks very weak.
3. AI GDP growth due to AI is just getting going anywhere. So no link at all to those last several years.
4. Startup numbers don’t always reflect industry adoption numbers. Growth comes from many places.
I do think AI is going to eat up a lot of the economy. It is ultimately a foundational tech, like electricity & computation. And with high specialization potential, like software.
And AI tech has been improving quickly for many years now.
But even with explosive growth that will take time.
I expect a lot of bright people in Germany are aware of that likelihood.
I take a very positive view of the fact that German society is not yet fully digitalized and that some developments are viewed rather critically and are only adopted in part.
Ultimately, I see adaptability as a particular strength of Germany. There is always a willingness to learn from mistakes and improve.
In a pluralistic society, this sometimes takes time, but I am sure that Germany is still on the right track. In the late 1990s and early 2000s, Germany was often referred to as “the sick man of Europe”. That may now be the case again in the eyes of some people, but this will only be a transitional phase.
> It saw no reason to change the model and invested too little in physical, human and digital infrastructure.
> The US is the prime example of a country that has moved with the times and has been able to adapt its industrial structure to changing circumstances.
What model? What change? What "physical, human and digital" infrastructure investments? What adaptations?
This article is shit. An average 7th grader can write better.
>This article is shit. An average 7th grader can write better.
The article has one original observation: the faulty metric for comparing US+UK AI startups to German AI startups.
The rest seem like paragraphs fully recycled from other articles (background on east Germany, Germany's network of small companies, etc). This article should have been a tweet.
As for the premise of the title alone: Good. Such a thing would be a welcome respite (if imperfect given the practical pervasiveness of digitization) from an ever more grossly digitized world of bullshit "optimization" that heavily serves as a cover for grotesque normalization of surveillance, social control, soft authoritarianism and centralized tracking across the board.
That such a title comes from a UK paper, from a country with a fundamentally sick level of social monitoring and essentially Orwellian levels of needing to spy on everything possible before selectively deeming it offensive, is amusing.
As for the article's content: It's half-baked screed about Germany being economically doomed by a contrived mishmash of fragmentary arguments that the author poorly defines or seems to understand. His strange blurbs about the dangers of the far right in Germany (this having to do what with digitization?) are just nonsensical. If anything, Germany is in political practice considerably more progressive than the UK has been for years, and in any case it's a long way from facing a resurgence of anything seriously resembling Nazism.
The Guardian sometimes posts interesting news, but more often than not, especially for opinion pieces, one wonders if its writers are capable of pulling their heads out of their asses long enough to string one coherent idea with another one.
> Since 2018, Germany has been the slowest-growing economy in the G7 – expanding by 0.4% a year on average. While the rest of the eurozone’s big four – France, Italy and Spain – have been showing signs of recovering from the slowdown caused by the Ukraine war-induced energy shock
Those three have a combined GDP of about 6.3bn€, compared to germany at 4.2bn€. And at least France and arguably Italy are what you might wanna call a "full stack economy" as well. However, they also have 176 million people vs. 83 million.
So those three have even lower productivity than germans, funny as that might sound.
Well the article is shit.
Of course Germany might have a slower economic growth. But let’s be real comparing it with countries behind Germany is useless, because at some point they will catch up.
The second part is than some bullshit take that Germany does not invest enough in ai.
Out of all industrial nations intent to put Germany (rightfully) to shame I'd say Great Britain is one of the worst examples. Specifically UK's economic model of centralization towards London and its financial hub has been rather destructive to the rest of the nation.
PS: And if the idiotic propping up of AI as the focus-point of whether a society fares well or not continues, then I'll guess we'll at some point see what we've seen with other "crucial sectors" across europe before: Nations backing/establishing local market "champions". Think AI city works (bad in quality but rich in government contracts).
Meanwhile I (an EU resident not residing in Germany) am using a German digital bank, a German digital broker, but a Swiss replacements for a lot of google services. I am a bit reluctant to do business with UK digital services and definitely see it as a negative when I am shopping around among alternatives because EU regulation has been a boon for me personally when dealing with companies behaving poorly. While EU regulation surely prevails when UK businesses sell to me, I'd just rather skip them.
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