The German government’s data strategy – initial assessment for companies

The German government has announced its data strategy. The very fact that such a strategy paper has been published shows that awareness of the value of data has reached the highest echelons of politics (see Germany a trailblazer for innovations). At the Federal Press Conference on the data strategy held on January 27, 2021, the Head of the Federal Chancellery, Dr. Helge Braun, referred, among other things, to a study by the BDI (Federation of German Industries) which estimates the potential for value creation from data in Germany at EUR425 billion. However, 90% of this potential has been untapped so far. Companies are challenged to better exploit this potential. One reason for this shortcoming is that data literacy is often too low. At the same time, however, despite a growing awareness of the value of data, many companies (and society as a whole) are too protective and reluctant to exploit the potential of data.

The data strategy comprises numerous measures and goals summarized on 120 pages to promote data usage. The approximately 240 measures are divided into four fields of action:

1. Making data infrastructures efficient and reliable – In addition to infrastructure-related measures such as network expansion, this addresses the role of cloud platforms, in particular the GAIA-X project. Another aspect is the promotion of innovative data distribution and data utilization business models as well as research in this area.

2. Increasing innovative and responsible data usage – On the one hand, this is about creating or expanding the legal framework. The aim is to increase security and trust, while also providing companies with certainty for their investments and IP protection. Another focus here is the area of non-personal data and its sharing, for example in research networks. Here, there is also the goal of innovative forms of collaboration to be able to use and exploit data. Topics such as “public data rooms”, but also “data trustees” are covered.

3. Increasing data literacy and establishing a data culture – Data literacy and data culture is required in all aspects of life. The goal is to significantly increase data literacy among the general public, businesses, and science. In addition to education, however, companies also are to be encouraged to improve their data literacy. Under the “Go-Data” initiative, SMEs in particular are to be supported in their data management, their data literacy, and the development of data-based business models as part of a government support program for SMEs (“Mittelstandsförderung”). A publicly available “toolbox” for greater data literacy is also to be developed.

4. Having the public sector lead by example – In addition to digital infrastructure and digitization, data-related topics are also to be supported by the expansion of related data expertise in the public sector. Among other things, the goal is to employ data scientists in all ministries.

The German government’s focus on data may be beneficial to companies. Greater legal certainty, expansion of data expertise, sensible classification of the topics of data usage and data security, promotion of innovative business models, and the establishment of shared data spaces and data trustees offer many advantages for German businesses. At the same time, however, the pressure to act keeps rising. All these measures can only be used in a meaningful way if a company is aware of its own data, its data strategy, and its data literacy. In this context, data value management is a holistic task for companies – just as brand value management cannot be done by marketing alone. What's more, broadening data awareness will create more competition and higher expectations among customers, partners, and employees.

PAC's cooperation partner Data Value Thinking has been working on the topics of data literacy and data culture for a long time. The German government’s data strategy underlines the importance of such an initiative. Data Value Thinking has gathered experience in how data-related topics can be classified and further developed within companies. Based on findings from client projects, Data Value Thinking has designed a workshop offering that supports companies with expanding their data strategy and increasing data literacy.

Our joint multi-client study “The Data Value Gap”, which is currently being prepared, also addresses the question of where companies stand in their data usage and data literacy. Data Value Thinking supports PAC in the preparation and evaluation of the survey. Find out more about the survey: Exploring the data gap – a guide to leveraging the value of data.

Our view on the government's data strategy

First of all, it is a good sign that the German government is addressing this issue. The importance of data literacy as a basis for creating value from data, and of striking a balance between the need for security and sensible use of data has also been sufficiently acknowledged. From this perspective, we think it is a good and adequate approach. As with all strategic issues, it all comes down to implementation. Both the creation of public awareness and the implementation in everyday, political, and economic life will depend on the environment. In this context, we identify three challenges:

1. Data, digitization, and companies' activities are global, cross-border phenomena. What good are well-balanced legal regulations in this environment? This is where topics such as data literacy and awareness come into play to highlight the differences. At the same time, we need to be realistic about the implications of an international environment. If the use of data also involves the exchange of data, as the strategy paper correctly explains, then exchange and usage cannot end at the German border.

2. The use of data is not limited to the analysis of data. Data usage, data value refers to a holistic view on the creation, processing, enrichment, and analysis of data, through to its use in processes, activities, and products. Even though this is hinted at in the strategy paper, the measures seem to focus on analysis, for example by emphasizing the role of data scientists in the ministries.

3. New technologies and the changing role of data must be met with new technologies and approaches. We are skeptical about data trustees. Here we would prefer the use of new technologies such as data sharing platforms and blockchains to ensure tracking, sharing, etc. The example of the coronavirus pandemic shows that not even the state, or its public health institution, RKI, was trusted with centrally storing anonymized data. Against this background, who would believe that the trustee principle could work in other segments?

In summary, we welcome the data strategy and its elements. There are individual topics that still need to be explored in more detail, but this is a good thing, because it shows that there is at least a foundation and some actions. The biggest challenge, however, will be implementation. Data literacy and establishing a data culture are an ongoing process. In order to increase data literacy, constant efforts have to be made to tackle this complex topic. The very response to the announcement of the data strategy shows how big the challenge is. A truncated statement by Minister of State Dorothee Bär on Clubhouse, taken out of context, was peddled by many media outlets as the only relevant topic of the announcement of the data strategy.

What challenges do you expect for harnessing the potential of data? We are looking forward to your comments.