Corporate use of AI

German economy is falling behind when it comes to AI

Although the use of Artificial Intelligence is increasing significantly at German companies, uptake is still lagging behind other European countries.

German economy is falling behind when it comes to AI

The use of artificial intelligence (AI) in companies, and how the new technology is handled, differs significantly between European countries. While Germany is comparatively hesitant when it comes to AI integration, and both management and employees are clearly still wary of it, Switzerland, Spain and Belgium, for example, are taking a much more exploratory approach to the topic, and are already much further along in terms of its use, a survey by management consultants EY shows.

According to the survey, the majority of employees in Germany have already experimented with AI and ChatGPT both privately and professionally. Still, companies in this country are clearly putting their employees in shackles in many cases. While around 63% of senior managers in Spain state that they use AI applications in their company, this figure is only 42% in Germany. The average in Europe is 52%. While 45% of European companies have also stated that they are already successfully using specific AI applications, this figure is significantly lower in Germany at 34%.

The core concern of companies when using AI is ultimately to increase productivity and profitability. Here, too, Spain and Switzerland are in the lead, stating that AI has helped to cut costs and increase profits. In Germany, significantly fewer companies have done so. Domestic companies are also much more reluctant to offer their employees further education and training opportunities in AI than companies in other countries, as documented by EY. This may also be due to the fear that jobs will be replaced by AI.

The latter is also reflected in a survey conducted by Allianz Trade. The credit insurer surveyed 6,000 people in Germany, Austria, France, Italy, Poland and Spain. Only 35% of respondents assume that AI will create more jobs. In contrast, 47% expect job losses. „The population in many European countries is unsettled by the rapid upheaval and is consequently sceptical,“ says Arne Holzhausen, Head of Insurance, Wealth and ESG at Allianz Research.

Division of the labour market

According to the survey, even more significant than the fear for jobs is the concern about increasing inequality. For example, 53% of the Germans surveyed believe that the further spread of AI will make the educated and intelligent ever smarter, while the rest will be left behind. Only a quarter of respondents were optimistic. The overall average for all six countries was 51% to 21%. In general, people in these countries see more risks than opportunities with AI - 36% to 21%.

However, Holzhausen believes that the key to success does not lie in replacing employees with AI tools, but rather in „using AI to supplement and expand their skills“. However, this requires massive investment in retraining, further training and preparing employees for new ways of working. In view of the shortage of skilled labour and demographic change, Holzhausen believes that AI could even be a stroke of luck in this respect.

According to a survey by the Ifo Institute, 27% of people in Germany are already using AI technology, 17.5% are planning to do so, and 34.3% are discussing its use. „The development is likely to accelerate,“ said Klaus Wohlrabe, head of the Ifo surveys. „Companies expect the use of AI to increase their productivity by more than 10%.“ For around one in five companies, however, AI is not yet an issue.