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"Germany has finally started its AI race to catch up."
Alex Dickmann and Alessandro Blank know the enormous potential that artificial intelligence opens up for small and medium-sized enterprises. As project managers at the German AI Association, they are passionate about both content-related and legal issues and are pushing for the implementation of AI in German SMEs. A conversation about speed, networking and framework conditions.
Artificial intelligence is currently establishing itself as a mainstream topic. Where does Germany stand in the global AI competition?
Alex: Germany has positioned itself well in many areas of AI thanks to its strong industrial base and cutting-edge research. However, we are lagging behind other countries such as the USA or China in areas such as start-up financing and speed of implementation. We often fail to transfer our research to the economy. In 2022, for example, 20 times more was invested in AI start-ups in the USA than in Germany, and six times more in China.
Alessandro: We see another difficulty with spin-offs. Currently, around three quarters of all scientific innovations are lost to society. Even if AI start-ups are an exception here - over 40 percent of all start-ups come from science - there is still massive potential for improvement so that scientific spin-offs can play a central role in the transfer between research innovations and innovative business models.
What do other countries do better or differently?
Alessandro: Other countries are resolutely committed to a targeted, government-sponsored AI strategy, creating a more favorable ecosystem for start-ups and innovation. We can learn from them how to create a favorable AI innovation climate by better connecting research, industry and politics.
Alex: However, we can also see that the start-up strategy adopted by the German government last year is already showing initial success: 41 new German AI start-ups were founded in 2022. That's 64% more than in 2021. And while investment in AI start-ups fell by 2% globally last year, it rose by 20% in Germany.
Alessandro: The bottom line is that Germany has finally started the race to catch up with AI. However, in order to become internationally competitive, we need to put the pedal to the metal even harder than before.
About the KI Bundesverband
The Bundesverband der Unternehmen der Künstlichen Intelligenz in Deutschland e.V. connects the most innovative AI and deep tech companies with the established economy and politics and, with more than 400 AI companies, is the largest AI network in Germany. The members of the Bundesverband Künstliche Intelligenz are committed to ensuring that this technology is used in line with European and democratic values and that Europe achieves digital sovereignty. To achieve this, the Federal Republic of Germany and the EU must become an attractive AI location for entrepreneurs, where the willingness to take risks is appreciated and the spirit of innovation meets the best conditions.
So companies should step on the gas, but in which direction? And what do they get out of it in the end?
Alex: Artificial intelligence is revolutionizing how SMEs and start-ups in Germany do business. It enables them to make processes more precise and efficient, design innovative business models from scratch and shape customer interactions on an individual level.
"Artificial intelligence is revolutionizing how SMEs and start-ups do business in Germany."
Do you have an example of this?
Alex: Let's take a look at the manufacturing industry, for example. Predictive maintenance can be used to predict and prevent machine failures, thereby reducing operating costs and increasing productivity. Although this example only scratches the surface of the potential of AI, it clearly shows how operating costs can be reduced and efficiency simply increased.
In which AI areas can Germany and Europe take the lead again?
Alessandro: Germany and Europe have the potential to become leaders in ethical AI, AI in healthcare and in the field of industrial automation. To achieve this, however, we need a clear political framework. This includes targeted funding for research and development, the creation of data pools for training purposes and regulations that both promote innovation and uphold ethical and data protection standards.
As mentioned at the beginning, Germany also occupies a leading position in the field of knowledge transfer. From a political perspective, it is now important to create framework conditions that promote spin-offs from science, improve financing opportunities for AI start-ups and also promote targeted incentives for the implementation of AI in SMEs and industry.
Alex: The German AI Association, for example, successfully introduced the so-called AI voucher into the German government's start-up strategy. The AI vouchers would enable SMEs to receive a subsidy for an AI project as long as they commission a German company with it. This would reduce the financial risk for SMEs, increase understanding of AI-based solutions in the SME sector and promote "AI Made in Germany".
"This will promote 'AI Made in Germany'."
It is part of your day-to-day business to recognize the challenges and opportunities that AI brings as a technology. How do you make companies aware of all these opportunities?
Alessandro: We offer platforms for knowledge exchange, organize regular networking events and help companies to find the right experts for their specific needs. In this way, we ensure that AI innovation flourishes in Germany and that our members receive the best possible support.
This includes the AI Village in Hürth near Cologne, which you are currently building.
Alex: Exactly. The AI Village in Hürth is a joint project between the city of Hürth, the AI Bundesverband, the Fraunhofer Institutes IAIS and FIT, KI.NRW and the Rheinische Fachhochschule, with which we want to use the structural change in the Rhineland region as an opportunity and promote and anchor the development and application of AI in the region. The establishment of such a hub is intended in particular to promote networking between AI companies and the established economy in the Rhineland region. In addition, AI is to be made learnable and tangible in order to bring this key technology closer to the general public. The importance of the project is also reflected in the support from the Federal Ministry for Economic Affairs and Climate Protection, which is funding the AI Village for the next four years.
Such projects are very inspiring. Nevertheless, quite a few companies are concerned about the safety of AI, as the legal framework does not always seem clear. The European Commission's aim is to make AI safe and trustworthy. Where do we stand here?
Alex: Of course, the security of AI plays a major role for companies and is also of great importance to the German AI Association. For companies in Germany in particular, issues such as data protection, manipulation and cyber security are key questions that need to be clarified before AI is used.
"Of course, the security of AI plays a major role for companies."
Alessandro: We are convinced that, on the one hand, Germany needs educational initiatives that show both the general public and companies specifically where the opportunities and risks lie when using AI. On the other hand, it is just as important that we promote the development of AI applications in Germany that we can design in accordance with our European values and data protection rules from the outset. It is therefore crucial that we establish clear safety standards and guidelines to address both the real and perceived concerns around AI safety. Only then can we realize the full potential of this technology while ensuring public and business confidence.
Alex: We therefore fundamentally support the work of the European authorities, who are currently looking to create a regulatory framework that sets European standards and is intended to promote AI innovations in Europe and therefore also in Germany.
How will companies be affected by the EU's proposed AI Act in regulatory and legal terms regarding AI, and what legal requirements should they keep an eye on to stay well informed?
Alessandro: The EU's AI Act is currently in the trilogue negotiations, which means that the Council and Parliament are trying to reach a compromise under the moderation of the Commission. A final text is not expected until the end of the year at the earliest.
What is it about?
Alessandro: Essentially, it's about regulating the use of AI in Europe, particularly with regard to risks and ethics. For example, companies will have to meet stricter requirements if their AI systems are classified as "high-risk". After an initially very pragmatic solution, the AI Act has developed into a very far-reaching regulatory framework over the last two years. Particularly with regard to generative AI and its regulation, we clearly see the danger with the current texts that the AI Act will lead to practically unworkable requirements for AI companies and thus jeopardize AI innovations in Europe in the long term.
Alex: In our view, Europe's position in the global AI ecosystem must also be taken into account. In the field of generative AI alone, almost 90 percent of all AI applications available on the market come from the USA and China. If the EU were now to introduce these strict and far-reaching regulatory requirements, this would inevitably result in deep cuts in our AI catch-up race mentioned at the beginning. The European AI ecosystem thrives on start-ups and SMEs. It will be much more difficult for these companies in particular to meet such compliance requirements, whereas we do not see this difficulty with the big tech companies in the US, as is currently demonstrated by their handling of the DSA or the DMA.
Such regulations could pose a challenge for start-ups and SMEs.
Alex: Ultimately, the EU's goal must be to promote the development and implementation of domestic AI systems, as this is the only way we can maintain and strengthen our digital sovereignty in the long term. And such a goal can only be achieved if an innovation-friendly, clear and pragmatic regulatory framework is developed. The KI Bundesverband will therefore continue to work intensively on the AI Act to ensure that it develops in this direction as far as possible.
Thank you very much for the interview!
The interview first appeared in issue 02/23 of our magazine data! You can find all issues and articles here:
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Alex Dickmann (Project Manager AI Village and Site Manager NRW) is setting up the AI Village in Hürth and looks after the members of the AI Bundesverband in North Rhine-Westphalia. He was previously in charge of the OpenGPT-X and LEAM projects within the association. Before joining the KI Bundesverband, he studied Digital Communication Leadership in Salzburg and Brussels, worked for a Member of the European Parliament and supported the DAAD branch office in Jakarta, Indonesia.
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Alessandro Blank (Project Support Public Affairs and Innovation Projects) works in the Public Affairs team of the AI Federal Association with a focus on EU policy and regulation. He also supports the development of the AI Village in Hürth. He previously worked as a student trainee in the association's policy team. Alessandro Blank studied political science in Zurich and international affairs and security in Berlin and Rome and worked for a political think tank in Berlin.
