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Smart City – Why Germany’s Sleepiness Creates an Interesting Market for International Smart Solutions

4. September 2018
Categories: Blogpost

Put in a sober light, Germany has been very sleepy with regards to smart city. But in the meantime, also German cities and communities understand that smart city is nothing else than managing the challenges of metropolitan and rural areas with the means of the digital age. And this makes Germany with its highly diverse cities and its high-quality expectations an interesting market for countries and enterprises which have understood the opportunity smart city much earlier.

In August this year, I had been contacted by the Dutch Institute for Future of Living (http://instituteforfutureofliving.org/) which is working for the Dutch government and is supporting the global cooperation of smart cities. They asked me to create a briefing about the smart city development in Germany. Here you can read my briefing:

1. ECONOMY AND TAX INCOME

After a long period of economic growth and buoyant tax income, Germany has started to modernize its run-down public infrastructure. Now, the lack of skilled labor in all areas of expertise is slowing the modernization.

2. Digitalization in Germany

Germany is struggling with digitalization and falling behind most European countries in internet connectivity. The new government has appointed a minister of state to start catching up.

3. Care for the Planet

A. Climate Change

Germany will fail to reach its goal to reduce 40% CO2 emissions by 2020. The political decision taken in 2011 to phase out nuclear energy by 2022 was not followed by a masterplan. Germany has lost its visionary lead and is with its numerous old brown coal power plants still one of the top CO2 emitters.  Adjustment measures due to climate change are well adopted.

B. New Mobility

The Diesel scandal and the ongoing transgression of European fine-dust limits is now generating a new innovative dynamic in industry and cities to develop cleaner urban mobility. Many cities struggle to increase the amount of e-busses due to supply bottlenecks. The number of electric cars is growing slowly. Until 2030  e-car charging will not create any problem for the electricity supply except for superfast charging.

C. Waste

Germany is in absolute and relative terms one of the world’s largest waste producers. But this topic hasn’t reached the political agenda yet, maybe because it is Europe’s n°1 in the ranking of circular economies.

4. Metropolitan Challenges

The major challenge of most metropolitan areas consists in the reduction of fine-dust.   Affordable housing has become a hot topic in fast growing cities like München, Frankfurt, Stuttgart, Düsseldorf, Hamburg, Berlin. Except for Dresden, Leipzig and Halle, population development in East-German cities is still stagnant or even negative. The Ruhr-area with its more than 5 million people is still in structural change from its coal and steel history but must be looked at city by city.  Integration and inclusion of people with migration back-ground is not (yet) a problem general to all cities.

5. Challenges Rural Areas

Demographic change, the academization and subsequently the migration of young well-educated people to city centers is creating a huge challenge in rural areas. This also hits regions with high demand for skilled – but not academically skilled – people. Internet sales and loss of purchasing power leading to a demise of stores. Healthcare provision is becoming an issue. Meanwhile, many areas have started LEADER programs for turn-around.

6. Smart City Development

Germany has been late in adopting the smart city development, meaning the elaboration of a political vision and a strategy to systematically develop infrastructures and innovation strengths and to increase life quality. There has been a controversial discussion for many years about the term and the concept of smart city because of data protection and the risk of vendor-lock-ins. Federal subsidy competitions under the name of “Digitale Stadt” have created little momentum. Noteworthy smart cities are Hamburg, Cologne, Munich, Bonn and recently Dortmund, whereas Berlin is still struggling to produce more than political commitments and a few innovation hubs.

But slowly, there is growing a more positive attitude. In 2017, a working group headed by the ministry of environment has elaborated a Smart City Charta. Cities as Stuttgart, Karlsruhe, Frankfurt, Düsseldorf, Münster, Oldenburg can now be listed among smart city candidates.

The state North Rhine Westfalia has started in 2018 a program “digital model community” with the 5 cities Aachen, Wuppertal, Paderborn, Gelsenkirchen, Soest and the region Paderborn.

7. Opportunities in International Collaboration

a. Showing references instead of arguing pros and cons on an abstract level

b. Marry different cultures of innovation and city development

c. Develop a system of check & balances to defend municipal autonomy and personal freedom in the age of big data

d. Keep a global perspective in mind: the urbanization of human society, climate and environmental protection

8. Down but not out

The high diversity of small, medium and large cities, together with a relatively strong autonomy of municipal government, make Germany an ideal testbed for rolling out many solutions that were developed in European subsidy programs, e.g. Horizon 2020. International and German companies will partner up to harden these solutions to meet German quality demands and market them worldwide.

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