What is the state of AI in Germany? The AI Monitor gives a concrete overview

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The AI Monitor conducted by the German Economic Institute Cologne (IW Cologne) provides an insight on the status quo of artificial intelligence in Germany every year. 21strategies summarizes the most important statements. Since 2019, a survey has been published annually. So what is the status of AI in Germany?

The AI Monitor analyzes the three areas of framework conditions, economy and society developments. The AI Index for 2022 has decreased slightly by 1.22 index points to 122 points compared with the previous year. However, the value is still higher than in the base year of 2019. The overall decline is due to the economy category. This can be explained by the overall developments relating to the pandemic, supply bottlenecks and inflation, etc. According to the IW Cologne, however, it is also a cause for concern and requires further analysis since artificial intelligence offers a great opportunity to meet global challenges. This applies in particular to the optimized use of resources, the mitigation of demographic change or climate protection. At the same time, it also offers opportunities to increase the competitiveness of companies and of Germany as a whole. The mitigation of currency, interest rate and commodity price risks through optimized hedging by the deep tech company 21strategies is an important example here.

In previous years, the economy sector has always made a positive contribution to the development of the AI Index. In 2022, this is now not the case. This leads to the conclusion that, on the one hand, a momentum could not be used. However, the decline in 2022 is moderate and compares favorably with high increases in previous years. The economic category analyzes the importance and use of AI in companies, AI patent applications, and AI in annual reports and job advertisements. An increase in patent applications in the field of AI is encouraging. In this regard, the share of AI-based patent applications from 2016 to 2019 has increased by 130 percent. This is a positive sign of Germany's ability to innovate. The use of AI in companies has also generally expanded. Compared with 2019, the use of AI in companies has increased by around 80 percent by 2022. For example, nearly 20 percent of companies reported using AI in 2022. However, this represents a slight decrease from the previous year. According to IW Cologne, it is not yet possible to assess whether this is due to statistical or more profound reasons. However, the low level of private investment in the field of AI in Germany is striking in an international comparison. In 2021, for example, almost 2 billion U.S. dollars were invested in the field of AI in Germany. This puts Germany in fifth place internationally. In comparison, however, around 50 billion U.S. dollars were invested in the U.S. and around 17 billion U.S. dollars in China. So there is still a lot of room for improvement here in terms of access to private investment and also the attractiveness of investing in Germany.

In all survey years, the overall framework for AI in Germany made a negative contribution. In 2022, decline of 1.3 index points was even sharper. This means that the framework conditions for AI in Germany are getting worse overall. The general conditions include the categories of digital infrastructure, collaboration between companies and research institutions, computer science graduates, scientific AI publications and AI in Bundestag protocols. Thus, while the digital infrastructure in Germany has improved overall. A European comparison shows that Germany still has a lot of catching up to do. For example, only around 70 percent of the companies surveyed expressed satisfaction with broadband connectivity in Germany. This puts Germany in second-to-last place in the EU-27. Cooperation between companies and research institutions, and thus the transmission of research results, has remained constant compared to the previous year. The number of computer science graduates has declined. However, according to IW Cologne, 100 professorships in the field of AI were filled, which should increase the attractiveness of AI-oriented courses of study. The positive effects of this will probably become visible in the following years.

The Society domain made a positive contribution. This includes awareness of AI, search interest on google, and AI in print media and on Twitter. Fundamental to technology acceptance is knowing about its opportunities and risks. An interest in the technology is operationalized on the basis of search queries in Google. Print media and social media should provide an assessment and interaction with regard to AI. Society's opinion in Germany tends to be open towards AI. Further expanded transparency and quality standards should support this trend.

In conclusion, digitization and artificial intelligence can make a positive contribution to major economic and societal challenges, and can thus be used to promote prosperity. Find out more about how 21strategies applies third-wave artificial intelligence in the areas of capital markets, supply chain and national security to optimize decisions under uncertainty.

References:

Rusche, Christian et al.  (2022). KI-Monitor 2022. Künstliche Intelligenz in Deutschland. Gutachten im Auftrag des Bundesverbandes Digitale Wirtschaft (BVDW) e.V., Köln.
https://www.iwkoeln.de/studien/christian-rusche-kuenstliche-intelligenz-in-deutschland.html (22.Oktober 2022).

Author: Tanja Zimmermann