On the road to the IGF 2019 in Berlin

Event report

[Read more session reports and updates from the 14th Internet Governance Forum]

The session focused on small and medium-sized enterprises (SMEs) and the economic, policy, and societal incentives that should be put in place so that they can thrive in the digital economy. Current trends towards protectionism and isolation cause negative economic effects for the economy as a whole, as well as for SMEs.

SMEs would benefit from:
1. Policies that experiment with new solutions
2. Tax laws that favour investments
3. More efficient government services
4. Modern immigration laws to attract the brightest minds
5. National data centres at reasonable costs
6. An education system that fosters creative thinkers and stirs a desire for entrepreneurship

An economy geared towards promoting a sustainable environment also offers opportunities for SMEs. Ms Sabine Zimmermann (Managing Director and Partner, X.0 Group GmbH and Executive Board Member, Initiative Digital and German Mittelstand e.V.) added that digitisation, data flows, and data analytics are key for the digital economy and for SMEs, but that they need a robust enabling infrastructure to function properly, such as Internet exchange points, fiber optic cables, and 5G networks.

Panellists also identified other reasons why digitisation is not advancing faster in Germany:
1. Shorter innovation cycles are a challenge for SMEs
2. Emerging technologies, such as AI, are concentrated in the United States and China
3. Digitisation is not a high priority for politicians and companies, because many of them are thriving without digitisation for the time being
4. Germany has a tendency to over-regulate new issues
5. Germany’s infrastructure (which includes broadband, landlines, and fibre) is not up to the task of enabling the digital economy

Mr Andreas Keck (Vice Chair Bundesvereinigung Liberaler Mittelstand) emphasised that education systems need to identify the highly gifted and provide them with adequate opportunities and challenges.

In the extensive discussion about the location of data centres, Mr Béla Waldhauser (CEO Telehouse/KDDI Germany Spokesperson, Alliance for the Strengthening of Digital Infrastructures in Germany) observed that a significant number of data centres that offer services to German companies are not located in Germany, mostly because of high costs. When data is located nationally, it is easier to enforce privacy and security norms. Speakers disagreed on whether data centres create a significant number of jobs. While the number of direct jobs might be limited, a high number of indirect jobs could be created.

Speakers recognised that policymakers play a key role in creating an enabling environment for the growth of the digital economy, but Ms Judith Nink (Head of Advocacy Eyeo GmbH) cautioned against over-regulation. Companies need to be free to try new business models. The United States provides a good model with its self-regulatory approach in most areas.

By Marilia Maciel