Chancellor Angela Merkel has warned business and politics against oversleeping the next trend of digitization.

The amalgamation of hardware and software is progressing so quickly that one has to be careful not to miss the boat, said Merkel in Berlin.

She expressly warned the automotive industry against becoming just an "extended workbench" for IT companies.

The car of the future will be more of a digital object “with good driving capabilities than a car with a few chips in it,” she said at the Federal Government's 15th Digital Summit.

Germany and the EU would have to look at what skills they would need to be able to survive in competition with large American IT groups, for example.

"We are in a race with those who come entirely from the digital world," she added: "We can still win that." But in Europe there is a lack of good software companies that need to be developed, the Chancellor added.

The EU competition law also makes it difficult for world market companies to emerge with sufficient capital resources, she criticized.

"No interface republic"

Merkel also called on the federal states and municipalities to drop their reservations about federal IT initiatives.

"We must not become an interface republic," she said, with a view to the necessary networking of local health authorities that use different software.

It is wrong to criticize a “centralization mania” of the federal government.

Rather, he must insist on the digital harmonization expected by the citizens in view of the federal structure.

In fact, the switch to digital work in the corona pandemic in Germany actually worked better than expected in their opinion.

"We still have major weaknesses in the expansion of the hardware, but we have at least managed so many Zoom conferences and Webex conferences and other conferences that our network would not have been expected to be," said Merkel.

Criticism from Bitkom

In the past few months, the pace has finally been accelerated in some places - for example with digitization in schools, said the Chancellor.

“There is still a lot to do, but we have made it.” The pandemic has shown that many digital processes still have to increase.

At the same time, Merkel spoke out against promoting digitization primarily with large-scale projects.

The past has shown that a step-by-step, agile approach makes more sense.

Federal Minister of Economics Peter Altmaier (CDU) had invited to the summit "Outlook: Economy digital 2030" with chairmen of the major digital platforms. Altmaier could not keep his promise to completely digitize the administration by 2021. "We all know that by the end of this year we will not have digitized all administrations," criticized Achim Berg, chairman of the digital association Bitkom. It had been discussed whether ambitious action, federalism, a lack of willingness to take risks or fragmented responsibilities were the cause. Above all, "many responsibilities" slowed down the processes, said Berg.

The focus of the summit was also on Artificial Intelligence (AI), which, according to Altmaier, will be a central element in the future. In order for this to be realized, however, the citizens also have to trust them. The Germans often looked too worried about new technologies: "We are dealing with the fact that many innovations are viewed with skepticism, that we are placing the risks in the foreground," said Altmaier.