Ralf Wintergerst: “We need 1,000 companies with 100 million euros in revenues in the digital sector.”

Mr Wintergerst, you’ve enjoyed success in karate. What qualities from your time as a competitor help you in your job?

Ralf Wintergerst: I was incredibly passionate and disciplined when it came to the sport and that it is something that I carry with me to this day. Competitive sports and professional success have a lot in common—you need to set yourself goals in both and you also need a certain amount of perseverance to achieve them. You also learn how to handle failure. If things don’t go to plan, you don’t just throw in the towel. You pick yourself up, learn from what happened and try again. This mindset is not just important for individuals, but also for businesses, politics, the country as a whole. Everyone needs a guiding light. If you don’t want to be German champion, you’re never going to be.

If the aim is to actively shape the digital transformation, where does Germany stand on its journey?

As Bitkom President, I have one of our very own studies in mind, which shows that only around a third of companies would say they are in a good place when it comes to digitalisation. They say they score highly in terms of digital services which they are also able to market. That does, however, mean that two-thirds are playing catch up, which is quite alarming and a reason why, as a country, we need to invest far more in digitalisation. But we cannot transform digitally if there is no will to embrace the change and ensure the future viability of our companies and business models. 

Let’s focus our attentions on the backbone of the Germany economy—SMEs. How are they fairing?

SMEs are rather stuck in the middle. They aren’t large enterprises that can do a few projects on the side, but they aren’t agile start-ups either.  That’s a real challenge when it comes to digital innovations as they not only need specialist expertise to redefine processes, but also start-up funding and the energy to run several things in parallel for a period of time along with the willingness to wave goodbye to traditional business models.

Can artificial intelligence ever make a difference?

I’d like to mention one of our studies in which 68 per cent of companies said they viewed AI as the most important technology of the future, while 29 per cent believe AI is just a passing fad. As things stand, it seems the larger the company is, the greater the influence AI is having. I’m sure that SMEs,  manufacturing companies and those 30 per cent have considerably underestimated the impact of AI.

In which areas?

AI can accelerate processes and optimise productivity particularly when it comes to internal knowledge transfer where chat bots are replacing exhaustive searching for documents to name just one example. Another area—this time in production—is predictive maintenance. While this is nothing new, AI is driving speeds and performance. And then there are the new business models, products and solutions. Businesses can look at what they already have, optimise it or completely redesign it.

That’s something you successfully achieved at Giesecke+Devrient (G+D), transforming the business from printing money to a tech company working in the field of digital security and financial platforms.

Giesecke+Devrient was founded in Leipzig in 1852. Paris was the Silicon Valley of the day with Leipzig its little brother. Even then we managed to stand out from the crowd due to the technology we used, setting standards and producing bank notes and securities. Innovation was part of the company’s DNA from day one, as was adaptability. We wouldn't have made it to 170 years otherwise. 

Can you give us a specific example?
The eSIM. A traditional SIM card is a tangible product. It’s manufactured, checked, sold and all the customer has to do is put it in their phone. An eSIM is an operating system. A licensing model. Once activated, it runs over a server system and requires a whole new way of invoicing. It required so much to be changed in the back office that we had plenty of people who were against the idea.

But you carried on?

Yes, because otherwise someone else would have done it and we wanted to be the change. Today, we are global market leaders, which wasn't even a thing ten years ago.

So where does AI come in?

We’ve started a project called AI Accelerator, to find out how we can roll out AI in day-to-day business faster. I thought we’d made quite a bit of progress in some areas, but I was wrong. It’s important to understand that the impact of AI won’t be felt from day one. The language models need to be trained and this training has to be trained. When you input a lot of information, you won’t necessarily get good quality information coming out. And then you have to qualify the employees and teams. You may even have to put them together first. That’s why the impact of AI will only be felt further down the line. 

Despite that, businesses should get started right away?

Absolutely. AI presents very real opportunities and companies have a learning curve ahead of them. Let’s go back to competitive sport. No-one débuts at the German championships. They start off at regional events. It’s important to look for projects where AI can make a real difference, then get employees on board and give them the skills they need before scaling up.

Why do we need to get started now?

Because we are in it to win it. If we, a country with just 84 million inhabitants, want to succeed in a technology-enabled world, we need innovations, courage and a pioneer spirit. It’s not an Elon Musk we need, but 1,000 companies with 100 million euros in revenues in the digital sector to make up Germany’s new digital SME landscape.

We've talked a lot about AI. Which other technologies and factors are going to play a role in the digital transformation?

I would say next-generation computing, which covers quantum computing, is going to be key. Quantum computing and AI will be a formidable team. It’s critical how we, as a country, invest—not least to establish digital sovereignty. Of course, we shouldn’t forget security because the age of quantum computing and AI will demand a whole new level of protection.