Do Germans want a part of the Internet revolution? They don't know yet. They first have to ask their government.
As unemployment soars to record highs and new attitudes are desperately needed, Germany should be welcoming the economic and educational opportunities of the Infobahn Age. Instead, politicians in Bonn are sticking to what they know best - carving out bizarre new laws and regulations. With traditional industries faltering and global competition threatening even highly specialized small- and medium-size businesses, one would think at least the famous Mittelstand companies would be taking steps to ensure they wouldn't be passed by on the information highway - if it weren't for the new Internet laws and regulations, that is.
Can't Germany at least rely on a new generation of highly computer-literate, skilled and risk-taking professionals, trained for cyberlife by future-oriented education specialists? Well, not really, according to German experts. "Many teachers," says journalist Joachim Mohr, who covers education for the German news magazine Der Spiegel in Hamburg, "still cling to the old prejudice that computers estrange children from their natural environment and destroy human communication."
Mohr's weekly, on the other hand, also knows about the brighter sides of the Internet business in Germany. It was the first news magazine of its class worldwide to start a Web edition. Spiegel Online (http://www.spiegel.de) took off in October 1994, followed since then by hundreds of media sites set up by other print publishers as well as radio and TV broadcasting networks. Their online zeal was fueled by the efforts of proprietary online services such as CompuServe, America Online (which established a joint venture in Germany with Bertelsmann, the world's third largest publishing group) and T-Online, a newly formed division of Deutsche Telekom.
But from Flensburg up in the northern part of the country to Munich in the south, most Germans still view the Internet as something they'd rather learn about on TV. Like the teachers, most office workers also regard the Net primarily as a phenomenon of the traditional media learning some new tricks, at best. At worst, they worry about cyberporn, Net scams or losing their jobs to the global competition, as bitterly described in the currently bestselling book Die Globalisierungsfalle (The Globalization Trap). For them, the new "Multimedia Law" enacted by the liberal-conservative German government last August might make sense. But even for the conservative German Industry Association, BDI, the new regulations spell "insecurity about the law, about investments and, finally, the decision to move business to places outside of Germany."
And adding to the worst fears of the computer industry, officials of the German public broadcasting bureaucracy recently confirmed a report by Der Spiegel outlining their plans to charge Internet users for every computer connected to the Internet. Their reasoning: Because the Web enables the reception of television and radio content, the receiving devices should therefore be treated as "radio equipment," which in Germany would require users to pay a monthly fee, through which public broadcasting is financed. Under German law, all radio or TV consumers are charged, even if they only watch private stations.
Are radio fees for the Internet "a bad joke," as Edith Petermann, a speaker for ISOC.DE (the German chapter of the Internet Society), hopes? Not at all, according to Dieter Stolte, head of the public German TV broadcasting service ZDF in Mainz. Ironically, the same ZDF, together with Microsoft and NBC, runs the most ambitious Internet news channel in Germany (http://www.zdf.msnbc.de) with 19 editors who are on Microsoft's payroll. But in private households, he adds, personal computers would be "usually treated as an additional device, free of charge." Not so with corporate PC installations, according to the law: It would place the main burden of such a hidden "Internet tax" on the industry. In response to the proposal, information technology companies have already announced their intention to sue.
Udo Reiter, head of ARD, the largest public broadcasting network in Germany, hurried to downplay the report as "just a theoretical discussion." For economical and crisis-ridden Germans, theoretical discussions like that merely add to their reasons not to get online too soon. And for teacher Bernd Juergens from Hamburg, who takes some pride in getting his students - and colleagues - involved in the multimedia future, it is "just plain crazy," he complains. "Why would anybody want to use a new medium," Juergens asks, "when the only result you can foresee is that you will be charged like hell?"
In addition, the online economy is hampered by high local telephone bills: Germans "still have to pay the highest fees," says Alexander Bojanowsky, head of the Information Technology Association. It is therefore a small miracle that 10,000 "newbies" subscribe to AOL and T-Online every month, as these services claim. Meanwhile, CompuServe reports 2,000 new subscriptions each month, while MSN says it prefers not to publish its subscriber numbers. But these new users are still early adopters compared to most German companies, says Joerg Menno Harms, chief operating officer at Hewlett-Packard in Boeblingen: "Currently," claims Harms, "only four percent use the networks for business."
In 1996, the installed base of personal computers in Germany per 100 residents was estimated at only 24, compared to 48 in the U.S. As of last July, the estimated number of Internet users in Germany - most of them connected to the Net by one of the private online services - had more than doubled from the previous year, to 1.6 million, according to LAC, a joint market research unit of the German computer press. In July, there were about 54,600 German domain names established with the ending .de, for "Deutschland." About 5,000 new ones are registered each month. The number of Internet host computers grew in the first half of 1997 from about 743,000 to 935,000. Germany ranks a solid third behind the U.S. and Japan (or fourth behind the U.K., depending on different sources) in building up their Internet infrastructures.
But the Internet growth rate has already significantly slowed down in Germany, from 123 percent in 1995 to 59 percent in 1996 (in Europe overall, the growth rate is 72 percent), according to the European Network Coordination Center RIPE in Amsterdam. One possible explanation for the slowdown is that while 98 percent of the biggest German corporations are connected to the Internet, the large Mittelstand continues to hesitate. Large department store chains like Karstadt or mail order giants like Quelle may claim modest success on the Net. But the "Marktplatz/Shopping" section of Web.de (http://web.de), Germany's largest Internet yellow pages, lists only about 160 online stores - and "unprofessionality rules," according to Computerwoche, a sister publication of the U.S. magazine Computerworld. "Mainly small and medium-sized companies," says Ulf Kalkmann, who heads the Retail Business Association in Hamburg, "don't really believe in this medium."
Public administration pioneers like Helmut Nowak, a future-oriented county official from Waldshut in the southwestern part of Germany, agree. Nowak started to offer space on the county's homepage to regional institutions and businesses, but "neither the industry nor administration branches showed interest," he says. Instead, he learned, "There are still a lot of people who regard the Internet as a threat, rather than a new instrument for communication."
Instead of investing in future technologies, the German government has cut the budget for research and education, while billions of German Marks are going toward traditional industries such as shipyards, coal mining or farming. When the Department of Commerce started a campaign in May to bring the Mittelstand online by supporting smaller companies with a grant of 4,600 Marks (about $3,000 U.S.) each, only 4.6 million Marks were set aside to achieve this ambitious goal. When it comes to the information infrastructure, the only legacy that Juergen Ruettgers, the German Secretary of State for Science and Technology, will leave, is a set of new laws and regulations. Don't worry, he soothes his critics: "Deregulation goes before regulation."
But from the conservative industry organization BDI to the more liberal Social Democratic Party (SPD), experts now agree: The new "Multimedia Law" is counterproductive. The legislation split censorship, encryption, privacy and trade law issue responsibilities between the Bonn government and the federal states, which traditionally regulate the broadcasting media in Germany. "Individual" services like online banking or shopping, for example, are governed by federal law, while online content "for the general public" has to obey state regulations. Critics have denounced the new law as non-practicable - what about mailing lists, for example? Additionally, they envision "long-term competence struggles between the government and the federal states," as SPD parliament member Joerg Tauss puts it. Bernd Schiphorst, head of Bertelsmann's New Media unit, also warns against "new investment obstacles."
So instead of an entrepreneurial boom, start-up experts like Heinz Klandt from the University of Dortmund report a "massive longing for economic security" and "a certain hostility toward innovation." Lack of venture capital accounts for only part of the problem. "Germany already lags in its development toward a service-oriented economy," warns August-Wilhelm Scheer, director of the Institute for Information Systems at the University of Saarland. "Now it has to watch out that it doesn't miss the train into the Information Age."
A few exceptions, like successful Internet start-up Intershop Communications, only confirm the rule. The head count of the software company, which sells an internationally successful Internet shopping basket solution, rose from 10 to 120 over the last year. Intershop, ironically named after the former "Intershop" valuta store chain in communist East Germany (which enabled customers to purchase Western goods such as cigarettes or PCs using "hard" currencies), set up shop in Burlingame, California, in 1996. According to Wilfried Beeck, co-founder of the company and CEO of Intershop's European division, university graduates qualified for the demands of the young industry are hard to find in Germany. Says Beeck: "We have to import Internet professionals from all over Europe to Jena, because the universities [in Germany] don't train enough students yet for these fields." German universities, rails Der Spiegel, "have completely unplugged themselves from workday reality."
Fortunately, there are some exceptions like Prof. Scheer and his students in SaarbrŸcken, close to the French border. The University of Saarland's project "Teaching 2000" has been chosen by the Bertelsmann Foundation and the Heinz Nixdorf Foundation for funding "University Development Through New Media," as the program is called. SaarbrŸcken plans to offer business information systems graduate courses on the Internet. Scheer's institute has also cultivated close ties with giant software maker SAP, the world market leader for client/server enterprise resource planning software. But typically, Scheer, who sits on the SAP board and founded his own - quite successful - company (IDS Prof. Scheer), has repeatedly been attacked for his entrepreneurial attitude by members of the German academia.
There are still some obstacles to achieving the goal of a wired university system, Frank Milius the project coordinator for "Teaching 2000," admits: The lack of laws and regulations for online exams, for example. But like Scheer, Milius and his team are driven by a new German spirit: "It doesn't make sense to wait," says Milius, "until some bureaucrats finally get around to changing the laws."
Gerd Meissner, a German high-tech publicist, started two of the most successful Web operations in Germany, Spiegel Online and Stern Online, and is author of a new book on software powerhouse SAP AG. info@adline.de