Germany: Quo Vadis AI?

The report, titled *AI-driven Transformation: Becoming an Augmented Organization*, emphasizes a crucial point: in today’s competitive landscape, transitioning into an augmented organization is no longer optional—it’s a strategic necessity. An augmented organization leverages AI and other cutting-edge technologies to enhance capabilities, streamline operations, and transform customer and employee experiences, along with the entire value chain. The study provides clear guidance to help managers successfully navigate the shift towards becoming an augmented organization.

Potential Loss of Competitiveness

Despite widespread recognition of AI’s impact, only 37% of companies have developed a comprehensive, long-term strategy for AI implementation. Managers’ skepticism or caution is understandable, given the persistent risks associated with AI, such as unresolved data protection issues and ethical challenges.

However, the study underscores that the potential loss of competitiveness from delaying AI adoption far outweighs these concerns. Augmented organizations benefit from strong market differentiation, increased productivity, faster innovation, and superior customer experiences. As competitive pressure mounts, AI-skeptical managers may have no choice but to embrace these emerging technologies.

Germany’s AI future at a crossroads

“It is particularly concerning that only 16 percent of German managers are actively involved in decision-making for AI initiatives, compared to the global average of 36 percent. This suggests that many German managers are not fully aware of AI’s potential and challenges. Without their active involvement, these initiatives risk losing long-term impact,” said Tobias Liebscher, Partner People & Strategy at BearingPoint.

Obstacles Hampering AI Adoption in Germany

In addition to a lack of transformation strategies, German companies face several other significant obstacles to successful AI adoption.

Technological Leadership at Risk

The study, which surveyed 150 participants from Germany, shows that 76% of German companies are already implementing AI, exceeding the global average. However, this technological leadership is under threat: 60% of German companies have yet to develop a robust AI strategy to ensure the long-term success of their initiatives. This lack of strategic depth could stifle growth potential and put Germany’s technological edge at risk.

Moreover, only 27% of companies in Germany have established comprehensive guidelines, policies, or best practices for their AI initiatives. This lack of strategic direction can lead to inefficiencies, legal risks, and scalability challenges over time.

Germany’s AI future at a crossroads”  (Graphic: Bearing Point GmbH)

Data Quality, Skills Shortage, and Cultural Resistance

Ensuring data quality and security remains a key challenge, with 76% of German companies citing this as a major obstacle to AI implementation. Another significant issue is the skills shortage—67% of companies report a lack of qualified AI specialists. This shortage could hinder the maintenance and further development of AI initiatives post-implementation. Furthermore, 76% of companies face internal cultural resistance, with employees expressing reservations about adopting new technologies. This resistance further complicates the successful introduction of AI.

The online survey

for the study was conducted in June 2024, targeting 700 managers from both the private and public sectors across 14 countries in Europe, the USA, and Asia. The survey primarily focused on large companies with annual revenues exceeding EUR 0.5 billion, with 84% of respondents coming from organizations generating over EUR 1 billion. The study was conducted by global market research institute Phronesis Partners.