What Scares Me about the Election Results – Beyond the Extreme Right

Yes, the AfD scares me. What scares me more is whether the future German governing coalition — in whatever shape and form it will finally materialize — will manage to suck the air out of the extremists, left and right, be delivering instead of stagnating. It can only do so by investing into the future.

This is exactly what worries me when I look at some recent McKinsey figures on venture capitalism investment in technologies of the future. The consulting company reviewed how much money flew into six different industries and created a ranking based on VC dollars spent in 2016 in the top countries. It does not look pretty for Germany.

McKinsey reviewed the following industries:

1. Fintech 
2. Virtual Reality 
3. Robotics and DronesArtificial Intelligence
4. Education Technology
5. Autonomous Driving

Germany pops up once in these rankings. We are talking about Europe’s largest economy, the fourth largest on the planet. On the other hand, tiny Singapore and Australia outgun Germany on two rankings.

The top players are the United States and China, both maintaining the number one or two slot in each industry reviewed, except two where China ranks three.

Let’s dive into the numbers.

This is the only one of the six industries reviewed here where Germany even shows up in the ranking and that at four. Given the importance of the German banking industry, German VC spending on Fintech companies may not be surprising. However, it would be interesting to know whether the VC dollars really originated from venture capitalist companies – or from the bank’s own independent subsidiaries which are re-branded as VC companies and then decked out with the cash and left alone to find the next best investment. 

During the mind-numbingly boring TV debate between Merkel and Schulz, two industries were mentioned: automotive and education. The talk even got a little lively when Germany’s car industry was discussed. And yet, German VC spending in 2016 was not high enough to get Germany into the top five.

Arguably, one of the next big things in the car industry will be autonomous driving, something the United States and China (rank one and two, respectively) understand. It is not surprising that Japan ranks three. After all, the car industry is huge in that country. The UK also has an established car industry, even if none of it is British anymore.

I don’t begrudge Australia the number four slot. After all, Japanese, U.S. and German car makers produce in the country for the Asian market at the country’s doorsteps. Yet, I do get worked up about Germany’s car industry for failing to show up in that top five. This is the country that invented the car. It created some of the best brands with wheels attached. About 150 years, the competition gears up for the next leap and German politicians and industry representatives focus on how to ensure the survival of technology that will change.

Next education. Here is the thing. Since 2015, survey after survey has underlined how ill-equipped the German school system is to prepare students for the digital world and technology. One could perhaps go as far as to say that it is not equipped at all. Too few laptops, iPads, sometimes not even a school Wi-Fi connection. That’s the state of education technology in Germany. You’d think this is fertile ground for VC dollars. Instead, the country is outranked in VC spending not just by the United States, China, Japan and the UK. India ranks five.

Venture capitalist go out there to identify the next winners. The next winners will be the ones who get new technologies right. These technologies will be crucial for the future well-being of societies. If VC spending is any indication for a country’s recognition of a ripe field for investment, I fear, the next German government will have a lot more on its plate than adjusting to the presence of extreme right-winged thugs in parliament.