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COVID-19 is giving digitalisation a boost

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COVID-19 is giving digitalisation a boost

Germany has never been one of the digital frontrunners. But then the coronavirus pandemic struck, and many things that previously seemed impossible are now achievable.

A post by Laura-Marie Buxmann and Vanessa Kokoschka

Monday, 18 May 2020

Working from home? Nice idea, but our company’s internal data isn’t safe on your personal computers. Consultation hours via video chat? No, that’s too impersonal. And anyway, it’s difficult because of data security. Submitting an application online? No, impossible. You have to turn up in person.

And then the coronavirus hit Germany, and the virus marked a turning point. The pandemic threw the whole world into turmoil within a few weeks and brought our old way of life to a standstill. Restaurants were shut down, events were cancelled, schools were closed: our focus shifted to the essentials and the things in life that are systemically important. As this path alone would lead to complete stagnation, an old and often-discussed topic has come to the fore once again: digitalisation.

Before the pandemic: Germany is in the middle of the pack

The“Digital Economy and Society Index”analyses the state of digitalisation across all EU countries. In 2019, Germany ranked 12th in this index, which is slightly above the EU average. However, Germany performs particularly poorly in the area of “public services”, which includes aspects such as submitting applications online. Here, Germany is in the bottom third of all countries.

But digitisation is not going well in the business and economic sectors either. Whilst there are some initiatives and programmes in place, only seven per cent of all German companies are regarded as digital pioneers. For example, the ICT sector (information and communication technology) is particularly strong when it comes to digital matters.

In the field of education, there are also some gaps – especially when compared to other countries. France and Denmark (both countries with centralised governments) reacted early to the lockdown and created digital platforms for home schooling. Even before the coronavirus pandemic, 91 per cent of Danish pupils used digital media in class – in Germany, the figure is around four per cent. “There are various reasons,” says Marco Zingler, Vice-President of the Federal Association of Digital Economy.

“On the one hand, a federal education system prevents uniform development across Germany. On the other hand, the culture surrounding digitalisation in education is still too cautious than it ought to be, and the response to the coronavirus crisis depends on the level of knowledge and commitment of individual teachers. We do not expect all teachers to have extensive digital skills. But we do expect the authorities and governments to bring in this digital expertise from outside.” – Marco Zingler (translation by the authors)

Another aspect is the“Digitalpakt Schule”programme, which is intended to support schools in purchasing new technical devices or e-learning platforms. Only a fraction of the five billion euros has been applied for so far. This is shown by a survey of the federal states.

Many reasons for the slow digitisation

What are the reasons for the slow pace of digitisation in Germany? Here is an overview of some key aspects:

  • Data security: Regulations such as the GDPR are perceived as a “hindrance”, even though they are intended to pave the way for digitalisation.
  • Investments: Financial considerations are preventing organisations from investing in digitisation.
  • Decision-making processes: The more hierarchical a company’s structure, the longer it takes to make decisions – just look at public administrations.
  • Time: Ideally, digital initiatives should be implemented alongside day-to-day business operations. A study commissioned by Deutsche Telekom has shown that there is a lack of time for this, particularly in the construction and healthcare sectors.
  • Staff skills: Digital skills are not necessarily the most important factor in recruitment. Moreover, even managers often lack digital experience.
  • Outdated structures: Well-established structures offer security and are therefore retained. Moreover, not every company or team is able to cope with mistakes – because mistakes are viewed negatively and perceived as an additional burden. This, in turn, leads to a reluctance to change anything.
  • Legislation: Legal aspects must be taken into account. For example: in order to get the ‘Digitalpakt Schule’ programme off the ground, the constitution was amended.

Digitalisation in the time of COVID-19

So if there is one positive outcome to this coronavirus crisis, it is that all processes are now also being digitised in Germany – whether in public authorities, offices, the workplace or even at universities. A concept that has long been standard practice in other countries. Due to the current situation, Germany was also forced to act swiftly and had to respond in record time. And so far, it has been demonstrated that the work-from-home model works.

“The coronavirus crisis makes one thing clear: working from home works – to a much greater extent than many employers realised. Of course, the following will also apply in future: a baker cannot be granted the right to work from home because he cannot bake his rolls at home. But for those who can and want to work from home, there will be a legal right.” – Hubertus Heil in an interview with Redaktionsnetzwerk Deutschland (translation by the authors)

Realising that so many things can also be done digitally could be an enormously important step for the future, for the post-Corona era. Employees, for example, could be given a break whilst on parental leave. The option for parents to work from home can be a huge relief for many families, as it makes it easier to balance family life and a career. Employers could also benefit, as they would not have to hire a full-time replacement for parents on parental leave for the time being. If this digital working model is expanded further, employees could also benefit from travel costs being minimised or even eliminated, as there is a greater focus on online meetings in the future. This would also have a positive impact on the climate, as there would be fewer business trips. Because although we are now facing another crisis, we must not lose sight of the one we are still in. And why not kill two birds with one stone?

“The coronavirus crisis is a digital turning point. There can be no going back to pre-crisis mode. The focus must be on using the digital legacy of the crisis to create the ‘New Normal’ and to move the country forward” – Achim Berg, president of the digital association Bitcom on the German Digital Pact (translation by the authors)

Even though this step – all this digitalisation that has now taken place – has happened somewhat under duress and has therefore been put to the test, it is clear that this digital transformation is actually working in many areas. What is important now, however, is that there is no regression once the crisis is over, but that this digital approach is further expanded. After all, what does it tell us that these digital trends proved ‘easily’ achievable more or less overnight? It shows us that the essential digital framework – the infrastructure – has already been in place for some time, but has not been utilised to its full potential. Of course, not everything can simply remain as it is. Existing structures must be reviewed and developed further, and new concepts must still be devised and refined, but now is the time to capitalise on this opportunity. So that in future it may be easier – and also more welcome – for employers to allow their staff to work from home. So that, as digitalisation progresses, new and better ways can be found; perhaps even ways that will have a positive impact on our climate.

“Whilst countries such as Sweden, Singapore, but also China and the USA are promoting technology and digitalisation at a political level, no convincing strategy can be identified in Germany. And this despite the fact that time is running out. Technologies are developing at an ever-faster pace, and Germany risks being unable to catch up once a gap has been created.” – Professor Dr Philip Meissner, Director of the Digital Report 2020, European Centre for Digital Competitiveness, on Germany’s digital status (translation by the authors)

Tangible changes across all areas of life

The coronavirus pandemic has not only brought about professional and economic changes, but of course also private and social changes. Often it is not even clear which change is taking place in which area, as the boundaries are blurring. Contactless payment, for example, is first and foremost an economic change, but it is of course also reflected in private life. More and more shops are now using contactless payment, as it minimises the risk of infection. There is no longer any need to touch payment terminals, and cash no longer needs to be handed from one person to another.

As has been mentioned so often, the introduction of working from home is another change brought about by this crisis. In addition, there are other concepts such as home schooling or e-learning, for those who are not yet working but are studying or still attending school. The ban on physical contact and the shift to working from home have led to video conferences replacing face-to-face meetings, and have also meant that long-distance travel has been replaced by online meetings.

Online shopping is also booming thanks to the coronavirus. Of course, this option is extremely convenient, especially for those in high-risk groups, who can use it to order food and other daily essentials. But the whole situation has evolved to the point where local shops are now also making a name for themselves with online shops and offering a delivery service, for example, so that they can be supported during the crisis.

Even flat viewings have, in some cases, moved entirely online. Immoscout has found that landlords receive twice as many enquiries when they offer online viewings. Landlords use tools such as vermietet.de or everreal.co, which use an algorithm to find suitable tenants.

It is now even possible to have an online consultation with a doctor. Digital consultation hours will not do away with the waiting room, but they could still offer some advantages. On the one hand, the risk of infection would be significantly reduced, and on the other hand, patients could save a great deal of time.

As regards private and social life, it also shows that today, despite the ban on contact and thanks to various technologies, we have the opportunity to be ‘together’. At present, almost all dating is permitted to take place online only. Via the Houseparty app, you can arrange to meet up at parties, with the difference that everyone is at home with their smartphone rather than in the same room. Events such as virtual reading groups and digital sports classes are also available online. Through live sessions, you can meet up online and practise a wide variety of sports together.

The consequence of all bars and clubs remaining closed is that all other parties have also moved online. Meanwhile, fans, listeners and viewers can enjoy entire concerts and festivals, which are streamed directly to their own sofas at home. This means living room concerts, which are streamed live via Facebook or Instagram, often in the form of a festival, at which a number of different stars perform one after the other.

Another example is demonstrations and rallies, which have also been moved entirely online. The demonstration organised by the German Trade Union Confederation (Deutscher Gewerkschaftsbund) on 1 May (Labour Day) took place entirely online via live stream. The Fridays for Future movement has also responded, as demonstrations are currently not permitted. On 24 April, they held an online protest under the hashtag #NetzstreikFürsKlima (Network Strike for Climate) to continue drawing attention to the climate crisis, which is currently being pushed further and further into the background due to the coronavirus situation. All these events are creating virtual moments which, despite the crisis, foster a sense of community.

Conclusion: The coronavirus crisis is a digital turning point

Germany is unlikely to catch up in certain areas, as the same thing is currently happening all over the world and everyone is continuing to work on their digital strategies. Overall, the digital landscape will therefore reach a higher standard worldwide, meaning that the distribution of resources will remain largely the same.

Furthermore, digitalisation will not continue at the same pace as it is now. Particularly in private and social spheres, there will certainly be a return to old structures. People will meet in person again and no longer simply make appointments online.

However, in the economic and professional spheres, this crisis will likely lead to a rethink. Existing structures will be utilised more efficiently, whilst new concepts will be developed and expanded further. The role of politics may also become more central at this stage. Through policy measures and regulations, it can set the course to ensure that the sphere of influence is not left solely to large digital players.

The current phase is an opportunity to develop an awareness of what works well online and what relies more on face-to-face contact. Ultimately, the post-Corona period will reveal which short-term solutions also stand a good chance of survival in the long term.

To conclude, a few interesting facts:

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