Artificial intelligence is likely to increasingly shape everyday life. A growing number of German companies are taking advantage of the opportunities, but many are hesitant. Where does Germany stand in international comparison?
When it comes to artificial intelligence (AI), the business world likes to talk about the “next big thing”. An analysis by the Munich-based ifo Institute shows that AI does not currently play such a big role for companies in Germany. Based on data from the EU statistics agency Eurostat, the institute has calculated that 12 percent of companies in Germany will have used at least one AI application in 2023. These were mainly larger companies with more than 250 employees.
Employees lack AI knowledge
Professor Oliver Falck from the ifo Institute sees various hurdles for companies when it comes to AI. “The main obstacle is the lack of skills and abilities in dealing with AI among employees.”
This shows that anyone who uses AI must also be able to understand and operate it. This is not always so easy. Currently, AI applications are mainly used in German companies when it comes to IT processes or word processing, for example in marketing. Overall, however, German companies still seem to be very hesitant.
Ifo professor Oliver Falck emphasises that legal reasons also play a role. “What can you do and what can’t you do? The legal framework is still a big issue.” There is a great deal of uncertainty among companies, especially with regard to the EU law on artificial intelligence and the question of how it will be implemented in Germany.
Ranked seventh in the EU
Despite the hurdles, German companies are at the forefront compared to other EU countries, ranking seventh. According to the ifo study, only companies in Denmark, Finland, Luxembourg, Belgium, the Netherlands and Malta are using AI more intensively.
But when it comes to the development of new AI applications or the technical infrastructure, the European Union only plays a minor role. Chris-Oliver Schickentanz, board member of the asset manager Capitell, emphasizes that the big players are based in the USA. Silicon Valley recognized the trend early on: “And of course we also have corporations there that have really deep pockets. Because AI isn’t that cheap to begin with. I have to invest first to have the capacity to train my models and then use AI sensibly.”
It costs time and money
The lead of the US tech companies is clearly visible on the stock market. According to an analysis by the consulting firm EY, the AI boom has boosted share prices worldwide – but it was mainly US companies that were able to benefit from this. At the halfway point of the year, only two of the 100 most valuable listed companies in the world were from Germany: the industrial group Siemens and the software company SAP.
However, Chris-Oliver Schickentanz from Capitell sees the opportunity for other European companies to soon join the race: “Currently, the euphoria surrounding AI is still focused on the technology sector. But sooner or later, as investors, we will also focus on companies that can use AI to expand their business model, tap into new customer groups and become more efficient.” There are also a number of European companies, who are at the forefront of this development. Schickentanz cites pharmaceutical companies as an example, which could use AI in research.
But for this, companies need individual applications: solutions tailored to their needs, which cost a lot of time and money. The opportunities offered by AI seem limitless in Germany, too, but this is not yet always noticeable in the day-to-day lives of companies.