Dependence on the USA and China: German industry wants digital sovereignty

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When Donald Trump is sworn in as US president for the second time on Monday, it is unclear what will follow – major disputes in trade relations are likely. This would also affect Europe, which is heavily dependent on the USA and China, especially when it comes to technology. A survey of German companies by the IT industry association Bitkom is now attempting to shed light on just how much. Scientists also see a great need for action.

In the survey, 41 percent of the participating companies stated that they were heavily dependent on the USA, while 45 percent said the same of the People's Republic. A further 40 percent saw themselves as rather dependent on the United States, 35 percent on China. A good 500 company management, purchasing and development managers from German companies with more than 20 employees were surveyed. In the case of semiconductors in particular, the companies consider themselves to be highly dependent: 83% see Germany as dependent on third parties.

Survival questionable without foreign countries

17% believe that they can survive for a maximum of six months without services or technology from abroad, 36% see seven to twelve months as realistic and a further 39% between one and two years. The dependency on end devices is particularly pronounced, with 90 percent of companies sourcing computers and telephones from abroad. The proportion is also high for software: 75% of companies estimate that they source this from abroad. Nine percent simply do not know exactly where products and services come from.

There are many reasons for this dependency: Above all, the fact that certain technology is only available from a small number of business partners abroad is cited by a good two thirds of companies; almost as many see this as a risk. Half of them believe that they would have no way of taking action if their business partners were put under pressure by their governments.

Researchers see concrete fields of action

The dependency of the EU and Germany is "extremely high in the entire digital sector", says Ferdinand Gehringer, who monitors developments at the CDU-affiliated Konrad Adenauer Foundation. For years, the EU has failed to coordinate and promote solutions from Europe. This applies to the areas of software, cloud and artificial intelligence. Initiatives such as the search engines Ecosia and Qwant, which are striving for their own search indices, are 15 years too late. The dependency on Microsoft, for example, has become ever greater, while European players such as SAP or Schwarz Digits would at best run "in mixed operation" with US providers such as Delos Cloud. And the Delos Cloud is 10 to 20 percent more expensive than Microsoft's public cloud.

Europe is also inconsistent when it comes to network equipment, where there are two major players in Nokia and Ericsson, as well as undersea cables and satellite internet connections. The European low-orbit satellite constellation IRIS², which is now being launched with up to 290 satellites, will not even be in a position to offer secure communication on a large scale in the EU, even if the project is nevertheless correct and exemplary for cooperation between European providers. The Adenauer Foundation analyst sees opportunities in quantum computers: Germany and the EU could still be pretty much at the beginning here.

Precise figures on dependencies are rare. The European Union's Cyber Resilience Act now requires manufacturers of hardware and software to document dependencies, while operators of critical systems must do so for all security-relevant products used in accordance with the NIS2 regime. However, a central evaluation of dependency paths is not yet planned.

Trump administration forces reaction

Almost all of the companies surveyed by Bitkom (95%) consider the outcome of the US presidential election to be a reason to take a fresh look at relationships. Half of them believe that they will have to change their supply chains in light of the Trump II administration. Researchers at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik) have zu come to the conclusion that for the time being, Europe must focus on achieving "the best possible deals" with Trump. In the medium term, the technical gap with the USA must be narrowed again, which is a difficult task.

Diversification and more in-house capacities will take time, says Bitkom President Ralf Wintergerst. The example of Japan shows that something can shift: it has once again become an important supplier in recent years. Wintergerst is calling for progress in the area of IT security in particular. However, Europe is far behind in chip technology and rapid progress is hardly possible. However, Europe should by no means give up the semiconductor sector; it is essential to be less dependent on individual companies from individual countries.

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