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“The allocation of funds is a crucial mechanism”

A bidt analysis shows how differently digitalisation is managed in the federal states.

© Yanawut Suntornkij / adobe.stock.com

The bidt project “Digital Transformation Strategies of German Federal States” provides a comparison of different approaches to digital policy.

An interview with co-project leader Professor Thomas Hess and research assistant Katharina Brunner on the project study.

Why did almost all federal states start publishing digital strategies in 2015?

Katharina Brunner: Digitalisation was recognised as increasingly important by politicians. Hamburg and Bavaria published digital policy strategies as early as 2015. The majority of the federal states followed suit in 2018 and 2019. The state elections played an important role in this.

Thomas Hess: In the economy, it became clear 20 years ago with the advent of the internet that there was a need for action in relation to digitalisation. Companies therefore developed appropriate strategies earlier. In politics, this awareness has only gradually prevailed. This eventually led to the development of digitisation strategies.

Digitisation is considered a cross-cutting issue because it affects so many areas of society and the economy: What particular challenges does this pose for politics?

Katharina Brunner: A government is organised into ministries. The departmental principle is very dominant in politics. This makes it difficult to map a topic like digitalisation in existing organisational structures and work processes.

Thomas Hess: It has to be said, however, that this also applied and still applies to the topic of the environment. This is also a topic that is relevant in many departments and for which separate ministries were then created at the federal and state levels. Sometimes I have the feeling that some people hide behind the fact that digitalisation is a cross-cutting issue – even though the departmental principle is indeed a problem.

What are the main findings of your study on digital policy?

Katharina Brunner: There are two ways of grasping the cross-cutting issue politically. One is to think about it when developing a strategy and to position oneself as broadly as possible and to involve various stakeholders – who can be internal, i.e. within the government, within the ministries, but also external persons. The other way is to create procedural and structural changes that can then be a mechanism for taking up the topic of digitalisation in various decisions.

Thomas Hess: One is participation: the question of the extent to which citizens are involved. The other is the extent to which the topic is left to the departments or whether a central authority is created for it. There are arguments for both. In the decentralised instance, in the ministries, there are the specialists. And the argument for the central solution is that there are overarching issues.

After all, new technologies do not only affect the department of one ministry, but many areas. This is the field of tension in which one moves in a purely factual manner.

Prof. Dr. Thomas Hess To the profile

Of course, one has to take into account that in coalition governments, ministries are led by different parties.

How is digital policy managed? Are there differences between the federal states?

Thomas Hess: There are two federal states that have a digital ministry, albeit in different forms. In Hesse, the Digital Ministry is part of the State Chancellery. Bavaria, meanwhile, has a completely separate digital ministry. Both are centralised solutions. And there is the decentralised variant. In Baden-Württemberg, a strong ministry, the Ministry of the Interior, coordinates digitisation. In NRW, it is the Ministry of Economics. The latent danger with this solution is that the coordinating ministries will see the issues close to them first. On the other hand, the political enforceability is stronger if there is a strong ministry behind it.

What role does the instrument of allocating financial resources play in the strategies?

Thomas Hess: The allocation of funds is a crucial mechanism. Basically, there are two models: each ministry receives its own money and is free to decide how it is used. Or there is a large central pot for digitisation, so that the money flows through a coordinating body that ties it to certain conditions.

Katharina Brunner: Coordinating bodies also need the decision-making power to be able to enforce digital policy interests. The allocation of funds is a good steering instrument for this.

Digitization budgets can strengthen digital policy decision-making competence.

Katharina Brunner To the profile

Which topics play the most important role in digital policy?

Thomas Hess: The spectrum is very broad. Many topics are dealt with. At the beginning, it was already focused on the economy. The Bavarian Digitisation Advisory Council, for example, which used to exist, was based in the Ministry of Economics. In many federal states, the awareness of the importance of digitisation came from the economics department. But then it quickly broadened.

Katharina Brunner: Many topics are addressed in all strategies, such as digital infrastructure or education. Gradually, technologies and topics that were on everyone’s lips, such as AI, blockchain and smart cities, appeared in the strategies.

Digitalisation brings with it constant changes. Is this also taken into account in the strategies?

Thomas Hess: For example, in my view, it is a task of the Bavarian Digital Ministry in its role as a coordinating body to continuously observe new technologies, to pick them up and to consider for which policy field they are relevant. For example, with blockchain, it was quickly clear that this was something for the financial sector. Later, it became clear that it could also be something for general administration. Currently, for example, quantum computing can be classified.

A digital strategy is never finished. You always have to see which new technologies are coming and what significance they have.

Prof. Dr. Thomas Hess To the profile

That is a technology-driven view, but of course one is well advised not to stop there, but to consider the implications for society.

How does Germany compare with other countries?

Katharina Brunner: Of course, digitisation strategies also exist internationally, at the state or regional level. In an international comparison, for example in the EU Commission’s Desi Index, which is intended to measure performance in digitisation and digital competitiveness, Germany traditionally scores in the middle.

Thomas Hess: Particularly in Northern Europe, the topic of digitalisation was on the agenda more broadly earlier. In a subsequent step, we want to look at what mechanisms exist in other countries for the development and implementation of digitisation strategies. Our goal is to find good solutions and bring them into the German discussion.