Shaping Germany’s Digital Future: Priorities for the Next Federal Government

dotmagazine: With the upcoming German election, what specific areas of digital transformation should the next government prioritize, and why?  

Alexander Rabe: While the previous German “traffic light coalition” government had announced several important digital policy initiatives in their coalition agreement – such as the introduction of a Ministry of Digitalization, the development of a digital strategy, and a dedicated digital budget – they unfortunately did not generate any fundamental changes in the political and administrative processes.

As a result, the current framework conditions and structures for implementing digital projects by this federal government are still inadequate and have caused inefficiency and frustration among all of the involved stakeholders. During this legislative period, many persistent digital policy challenges could not be resolved and must now be addressed and prioritized by a new federal government. In Germany, we are still waiting for the following:

• a modern and functional digital administration,
• nationwide and comparable digital education,
• a future-proof ecosystem of high-performance digital infrastructures, and
• a coherent IT security policy.

One thing is clear: the forthcoming German federal government must act much more decisively and consistently in order to strengthen Germany’s digital competitiveness and sustainably secure the state’s ability to act. New approaches must be adopted in the political work of a federal state – embedded within the European Union – so that these persistent challenges finally become a thing of the past and we can once again regain an internationally competitive digital location in Germany.

Two years ago, you were appointed to join the “Digital Strategy Advisory Board” of the German Federal Ministry for Digital and Transport. In dotmagazine last year, you emphasized just how important it was for the German government to develop a unified approach. Looking ahead, how crucial do you believe it is to coordinate digitalization across all ministries? 

Rabe: We need nothing less than a digital policy process revolution in administration, oriented towards driving the digital transformation of the state, administration, and society with new structures, responsibilities, and departmental remits.

The foundations for this must be clearly defined in the coalition agreement of a new federal government. These include:

• A clear vision for “Digital Germany 2030”: The digital strategy of a future government must be guided by a clear vision that serves as a framework for all projects and measures. In the future, a Ministry of Digitalization will also need cross-departmental competencies and its own budget to rectify past omissions.
• Impact analysis instead of over-regulation: Before new rules are enacted, a thorough analysis of existing regulations should be conducted in order to avoid duplicate structures and increase the effectiveness of digital legislation.
• A consistent reduction of bureaucratic hurdles, especially with regard to newly introduced documentation requirements in the legislative period, must also be among the digital policy goals of a future German federal government.
• A decisive network expansion: There is the need for a rapid expansion of fiber-optic, 5G, and other digital infrastructures such as data centers and cloud capacities.

• Stringent implementation of central European requirements: The implementation of NIS2, CER (Critical Entities Resilience Directive), and the AI Act must be carried out in a swift and consistent manner in order to meet EU requirements in a timely manner and to avoid future economic uncertainties.

Essential components of this reorganization of state processes must therefore include a digital strategy for a “Digital Germany 2030” that is supported by all government parties. This requires a strong Ministry of Digitalization with cross-departmental competencies, equipped with its own digital budget that can also provide financing commitments beyond the legislative period, as well as the right to veto regulatory or implementation proposals that contradict the spirit of the digital strategy. Ideally, such a Ministry of Digitalization should consolidate all central competencies for digital infrastructures, services, and related regulation.

Furthermore, a permanent and binding exchange on the digital strategy between the federal and state governments must be established and consolidated, following the model of the recently established D17 Conference.

It is also important to prevent and stop a patchwork of digital policy regulation and, in the worst-case scenario, contradictory legislation in the digital sector. This also means a clear and coordinated voting behavior by Germany at the European level, based on the digital strategy.

As Managing Director of the eco Association, what do you see as the most pressing issues for our member companies in navigating regulatory and market changes, especially in light of global political shifts? And how is eco positioned to support its members in adapting to these changes and maintaining competitiveness? 

Rabe: What our member companies need more than ever today is a reduction of bureaucratic processes that have been established over the years without any discernible added value, as well as the withdrawal of excessive documentation requirements. We should first fully implement the existing regulation in the digital sector, and subsequently evaluate it. We can only advise against unrestrained regulation as we’ve done in recent years.

In the regulatory field, I already see existing fragmentation around data protection and data security. That forces globally operating companies to deal with different standards and regulations (e.g. GDPR in Europe, CCPA in California, PIPL in China), which can lead to high compliance costs. National data sovereignty regulations can further complicate global operations. For SMEs, these requirements have become almost impossible to keep track of, let alone to be managed meaningfully and efficiently.

There are also major challenges in the area of cybersecurity and resilience: Geopolitical tensions and conflicts between states such as the US and China, or the upheaval caused by Russia’s ongoing war of aggression against Ukraine, create uncertainties in supply chains and market access.

At the same time, we are witnessing increasing threats from cyberattacks, including ransomware and state-sponsored attacks. New cybersecurity laws, such as the NIS2 Directive, require companies to implement higher standards in prevention.

As the climate crisis progresses, pressure is also growing on Internet and digital sector companies to reduce their ecological footprint. This pressure is increasingly reflected in corresponding legislation, such as requiring data center operators to adopt ambitious waste heat utilization targets – often without prior consideration of the practical implementation of such mandates.

As an association, we monitor all of these developments and are in close contact with regulatory authorities to help shape fair and balanced regulations. At the same time, we offer our member companies guidance, tools, and assistance to help them adapt to upcoming regulatory requirements at an early stage and to take appropriate precautions.

At both the European and the national levels, what concrete measures do you see being taken to strengthen critical digital infrastructure, especially in the face of cyber threats? 

Rabe: The German federal government’s decision of November 6, 2024, on the German “KRITISDachG” (KRITIS Umbrella Act) represents an important step towards further strengthening the protection of critical infrastructures in Germany. While the law was approved by the federal cabinet, it is still at the beginning of the parliamentary process and, given the early federal elections scheduled for late February, is unlikely to be adopted during this current legislative period. Instead, it will be revisited by the next federal government.

In principle, it is important to us that providers who are already regulated by other laws are not subject to additional obligations or duplicate supervision under the KRITIS Umbrella Act. However, the current draft law does not completely eliminate this risk, as the telecommunications and IT sector remain partially covered by the law.

For the Internet industry, including data center operators and “cloud” service providers, comprehensive legal regulations already exist with the German “NIS2UmsuCG” (NIS2 Implementation Act), as well as for the telecommunications sector under the German “TKG” (Telecommunications Act).

We explicitly welcome the fact that clear agreements are being sought between the NIS2 Implementation Act to strengthen cybersecurity and the KRITIS Umbrella Act, particularly in creating sector-specific security standards. In this context, uniform and transparent supervisory structures are essential – this is, after all, a declared goal of European harmonization that is being pursued in the NIS2 Directive and at least realized for digital service providers through the recently published implementing act.

Consequently, eco continues to advocate for a regulatory strategy that draws clear boundaries between existing and new regulations in order to avoid uncertainty for companies and to sustainably strengthen the protection of critical infrastructures in Germany.

With regard to the EU AI Act, how do you anticipate the regulation will impact AI innovation in Germany and the rest of Europe?

Rabe: For the AI Act to be effective, a uniform interpretation and application of the legal framework across the EU Member States is essential. The codes of practice outlined in the AI Act are central to promoting innovation while simultaneously ensuring legal certainty for companies.

National deviations increase the risk of a regulatory patchwork. This is detrimental to the Digital Single Market, as legal uncertainty will drive innovation increasingly outside the EU in the long term.

In the context of the AI Act, this means that close collaboration between the stakeholders is essential. Swiftly establishing the necessary supervisory authorities at both national and EU level is particularly important. The development of the new EU institutions for artificial intelligence, above all the “AI Board” and the “AI Office,” must now be further prioritized to ensure that the application and interpretation of the AI Act can keep pace with the speed at which AI is developing, along with the associated new application scenarios.  The regulation and its implementation must not become a barrier to innovation in this key technology: this is so crucial for Europe’s future!

At the national level, guidelines and dedicated points of contact for companies are also needed to facilitate their handling of the complex regulation of AI. It is now the task of policymakers in the Member States and at the EU level to provide this support – ideally in an unbureaucratic manner. Simplicity should also be a central focus in establishing the real-world laboratories stipulated by the AI Act.

From our end, eco advocates for a low-bureaucracy and uniform implementation of the AI Act in Germany and across Europe.

Sustainability is a growing priority in the tech industry. In November 2024, EuroISPA published its position paper on sustainability. How can Germany’s digitalization efforts align with its climate goals? 

Rabe: In order to achieve the German federal government’s climate targets and climate neutrality in accordance with the Paris Agreement for 2050, digital infrastructures, services, and technologies are an indispensable part of the solution. This is exemplified, for example, by a study published by eco Association in cooperation with Arthur D. Little and the eco-founded Alliance for the Strengthening of Digital Infrastructures in Germany.

The study forecasts the CO₂ emissions for Germany in the year 2050 and contrasts them to the CO₂ savings potential that can be achieved through the consistent introduction and use of digital technologies and services in the sectors of industry, city, and rural areas. According to the study, digitalization levers in these sectors could result in CO₂ savings of up to 163 megatons by 2050. This equates to around 20% of the total emissions forecast for Germany in 2050. An additional savings potential of 104 megatons is forecast for the area of data storage and transmission, meaning that a total reduction in CO₂ emissions of 30% by 2050 is possible.

It is therefore imperative that European policymakers recognize digitalization and sustainability as two sides of the same coin, and promote the potential of the Internet industry for achieving sustainability goals and using it in joint consultation with the industry. In many sectors, a significantly improved CO₂ balance can be achieved thanks to digital technologies and applications – in particular through Internet of Things (IoT) application scenarios.

It is the task of policymakers, in close collaboration with industry, to develop holistic and consistent concepts to fully leverage these potentials for a sustainable digital future.

Thank you very much for the interview!

This interview was conducted by dotmagazine.

Since January 2018, Alexander Rabe has been the Managing Director of eco – Association of the Internet Industry, the largest Internet industry association in Europe. He took over the management of eco’s Capital Office, including the division of Policy, Law and Regulations, in 2016. Prior to that, Rabe was CEO of the Gesellschaft für Informatik (GI) and CEO of German Informatik Akademie GmbH in Bonn.