• Mathias Oberndörfer, Partner |

Keyfacts

  • Digitalisation and sustainability are imperative for the future competitiveness of Germany as a business location.

  • Uniform standards are necessary for successful digitalisation. The state has the task of setting these standards.

  • In addition to conserving natural resources, sustainability also means acting economically to preserve the public sector's financial leeway.

The coronavirus pandemic has accelerated a process that has been inconsistently pursued and implemented for years: the transformation from the old, analogue to the digital, sustainable world and reality. Taking this step now is one of the most urgent tasks of public administration. Only by doing this can Germany remain competitive internationally as a business location and make the transition to climate neutrality. Digital progress and sustainability are the cross-cutting tasks of today's generation.

Dynamic further development of the law

Fundamental legal adjustments are often demanded for this transformation, and some voices are even pushing for a completely new legal system. But we need not go that far: as a constitutional state, we have a system that has been tried and tested for generations and generally should not be called into question. But the further development of the law should be more dynamic. Let's take the example of homeschooling: data protection law has not been quick enough to set a manageable framework for the requirements of digital schools. Legislators should have reacted more quickly - at national and European level.

It goes without saying that the principles of the rule of law and the separation of powers must not be thrown overboard. The separation of powers - one of the cornerstones of democracy - is not an impediment to faster development of law. In the pandemic, governments and parliaments have realised how important it is in legislation for many things to be implemented more quickly than before. For example, the Federal Protection against Infection Act was amended within only one week. A significantly faster pace would be desirable and would allow many legislative processes to answer urgent questions in a time marked by change.

Digital competence and change of mentality

Regarding recruitment in public administration, digital competence should in future be an essential part of requirement profiles - as is already common practice in the economy. This applies above all to managers who are also role models for their team. They should also exemplify the most important thing in this transformation process: it comes down to a fundamental change in mentality. Away from "We've always done it this way" and towards "How can we do it better in the future?". Public administration in this country has already come very far in this respect, but it would be desirable for this change of mentality to be anchored in the DNA of every employee in the administration. We can all always do better.

Federal system versus central state

One question commonly asked is whether our federal system makes sense. The answer to this is that we in Germany have done very well with our existing structure for over 70 years and will continue to do very well with it. The central state can do some things better, but not everything. This can be seen in France, the model country of centralised government. There, people moved away from the central state, at least to some extent, years ago when regional parliaments were elected and certain competences were handed over.

Centrality in digitalisation and federalism are not contradictory, because the most important thing in digitalisation and sustainability is to set uniform standards - and this must not fail because of particular interests within countries. Let's take two simple examples: issuing a passport and an identity card is the same process - whether in Flensburg, Berchtesgaden, Cologne or Frankfurt an der Oder. The same system, networked nationwide, should be used. Preparing a development plan is also (essentially) identical everywhere and should be carried out centrally. State building laws or municipal bylaws could be entered into the system - especially, of course, when it comes to automated solutions. In the future, a superordinate competence of Länder or municipalities will only be required where there are regional specifics or uniquenesses; otherwise, uniform systems can be used throughout Germany. This also saves costs in development, hosting and service.

Uniform standards for digitalisation

The basic principle in digitalisation is that the state should set the legal and planning framework. It is a service provider wherever it is necessary from an economic point of view for the user or in terms of non-discrimination, or if there is a market failure in important supply issues - for example, broadband supply in sparsely populated areas.

An example of this principle is autonomous driving. The state cannot have the task of prescribing the automation systems in the vehicles and even producing them itself or through licensees. Autonomous driving, however, shows that it is important to set a standard at an early stage. If all competitors use this standard and develop their control systems based on it, autonomous driving will succeed soon and, more importantly, safely. 

Setting standards is the state's true creative power, but also its duty. 

It gives its citizens the security of knowing that the same standard applies throughout Germany and potentially also in Europe, and that they can rely on it.

Commitment to sustainability

Compliance with the principles of sustainability must be a matter of course in all regulations and transformation processes. Without consideration for the environment, social cohesion and responsible supervisory structures, we will not be able to meet the challenges of the future. The Federal Constitutional Court has made it clear that the Basic Law obliges the state to protect the climate in order to safeguard the fundamental freedoms of future generations. In addition to the conservation of natural resources, sustainability also means economic action. After all, in addition to conserving natural resources, preserving the financial leeway of the public sector is an obligation owed to the next generation. Digitalisation can save resources and thus free up financial resources to shape the future.

Invest consistently in transformation projects

Government support programmes, especially those aimed at stimulating the economy after Covid, must not lose sight of preserving financial leeway and creating new leeway. The Macroeconomic Policy Institute (IMK), which is close to the trade unions, estimates that additional public investment of 460 billion euros will be necessary over the next ten years to make up for lost ground and maintain high standards. These funds should consistently flow only into those projects that enable transformation by reducing greenhouse gas emissions, promoting innovation, accelerating digitalisation or creating production capacities for new products - in other words, contributing to lasting sustainability, value creation and employment.  

All the principles and the examples mentioned show that citizens and business are in the same boat in relation to the state. Businesses expect optimal conditions for their operations: legal certainty, infrastructure and young skilled workers benefitting from good educational opportunities. Citizens expect to be able to live in a community with security, good educational opportunities, good infrastructure and good services of general interest. 

The experience gained from the challenges and the design of solutions in one sector helps to develop tailor-made solutions for another. Digitalisation as a cross-sectoral task therefore also works across sectors.