Olaf Scholz: AI will increase the pace of economic change

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"We are currently going through a very fundamental modernization of our economy and society at an enormous speed." Chancellor Olaf Scholz (SPD) said this on Sunday at the East German Economic Forum in Bad Saarow. This is being driven by decarbonization, digitalization, and the use of AI. Scholz assumes that the "exponentially increasing capacities of artificial intelligence" mean that "the pace of change is expected to increase significantly in the coming years".

However, there are factors for cyclical and structural growth weaknesses, labor shortages, the energy system, willingness to invest and bureaucracy. The German government is trying to counter these, for example through the Skilled Immigration Act. This would allow those people who are needed here to come quickly and without too much bureaucracy. On the subject of bureaucracy, Scholz cited the Immission Control Act as an example, the amendment of which the federal government is now tackling. "That sounds pretty bureaucratic," said Scholz, "but anyone who has ever built something somewhere or commissioned a plant knows that these inspection documents in particular fill walls of files several meters long." Someone told him that he had hired two trucks to drive his documents to the authorities.

"All this because of a flower"

"They check whether a wind turbine or an electrolyser has a negative impact on any species of bird or flower," said Scholz. "I don't want anything for the flowers and birds. But when it comes to building new pipelines, developing new energy supplies or climate-friendly production, it's all about environmental and climate protection. We simply can no longer afford to stop all of this because of a flower that can grow a few meters away." In order to shorten such approval procedures, the government is relying on fully digitalized procedures, clearer deadlines and an early start to construction.

Scholz was thus addressing the classic conflict between environmental protection and nature conservation. In order to combat climate change in general, for example, wind turbines are being planned in areas where rare plants grow or birds have their regular migration routes. The expansion of renewable energies and their infrastructure is therefore of "paramount interest" under the Renewable Energy Sources Act.

Scholz went on to say that Germany had for the first time achieved the pace of renewable energy expansion required to produce around 80 percent of its electricity from renewables by 2030. Added to this is the new power plant strategy for times when the wind is not blowing and the sun is not shining, and the framework for a hydrogen core network. "This gives us almost everything we need for a secure and affordable energy supply in Germany in the future."

"We are not investing with a watering can"

Wholesale prices for energy are now back at pre-crisis levels. "In part, the market has ensured this - but in part we, as a government, have also contributed." For example, it has expanded the supply of energy through the use of gas terminals, abolished the EEG levy and reduced the electricity tax for the manufacturing industry and agriculture to almost zero. "We have continued and expanded the relief for energy-intensive companies. And we are looking at how this can be continued."

The German government is investing a good 100 billion euros this year, explained Scholz. "We are not investing with a watering can, but in a targeted manner where the basis for economic growth exists: in fiber optic lines, in the renewal of railways, better roads and new bridges, in a nationwide network of charging stations, the hydrogen ramp-up, the transformation of industrial processes, in energy-efficient building refurbishment and the promotion of microelectronics."

The success of the investments is particularly visible in Eastern Germany. As examples, Scholz cited Tesla, CATL and Infineon, Intel, Amazon and TSMC, which had decided to invest billions in Eastern Germany, partly because of the strengths of the location: good universities and research facilities, industrial sites on a scale that often no longer exists in other countries. Added to this are employees who are interested in technology and are industry-friendly. Another locational advantage is renewable energies, which will continue to play an increasingly important role in future relocation decisions.

Time is driving

To achieve this, the expansion of renewable energies must go hand in hand with the expansion of the grid. Here, Scholz praised the state of Brandenburg, whose government had agreed on a joint program with the distribution grid operators to significantly shorten planning and approval times.

Given the fast pace – the economic forum also had the motto "fast forward" – many citizens are worried about being left behind and losing control, Scholz admitted. This reminds him of an almost 100-year-old poem by Dresden-born Erich Kästner: "The globe is turning. And we turn with it. Time drives a car. But no man can steer." From this, Scholz concluded that times of great change have always been times of great uncertainty about the future.

"This has economic, social and political consequences," emphasized Scholz. Then as now, extremists tried to exploit this uncertainty and stir up fear and unrest: "They spread economically ruinous delusions about the Deutschmark and D-Exit. Election posters are being torn down, campaigners are being attacked, democracy is being disparaged." The perpetrators should not feel safe, added Scholz: "We will take action against all of them and we will not accept that such violence takes place."

(anw)