Alexander Schmidt, Ph.D., DBA – 16 February 2025

The World is Reordering Itself – and Germany?

Whoever travels from the GCC to Southeast Asia and theUS sees first-hand how nations shape their future—some through bold decisions,others through innovation. But where does Germany stand in this globaltransformation?. In the UAE, I witness how bold decisions translate into rapid development;in ASEAN countries, agility and pragmatism drive progress; and in the U.S.,innovation thrives despite its political shifts. Having recently completed mydoctoral work at IAU in Los Angeles, I’ve spent time reflecting on thesedynamics—particularly in contrast to Germany and the broader European Union.

During my regular visits to the UAE, I observefirst-hand how the future is being shaped—not through endless debates, butthrough decisive action. In just a few months, new innovation hubs emerge, anddigital infrastructure projects move forward without bureaucratic hurdles. Thesame pragmatic mindset is evident across ASEAN countries, where efficiency andagility take precedence.

At the same time, geopolitical pressures areintensifying. The United States is pursuing an increasingly protectionistcourse, while China is strategically advancing its technological independence.Meanwhile, the EU, despite its ambitions in digital sovereignty, often findsitself caught between regulation and innovation, risk mitigation and globalcompetitiveness. And Germany? While the world is undergoing profoundtransformation, it clings to well-established but increasingly rigidstructures. While this stability has long been an advantage, it risks becomingan Achilles' heel in an era of rapid global change. (Bernath & Tanner,2025).

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Technological Dependence – Europe’s Blind Spots?

Technology is no longer just an economic factor—it hasbecome a geopolitical instrument of power. Controlling digital infrastructuremeans not only regulating market access but also setting the rules of the game.

While the United States drives innovation throughmarket-oriented policies and China systematically builds its technologicalself-sufficiency, Europe remains cautious. The European ChipsAct (European Commission, 2023; PubAffairs Bruxelles, 2023) and therecently announced InvestAI initiative seek to strengthen Europe'ssemiconductor and artificial intelligence sectors. The €200 billion programme, unveiledin February 2025, includes a €20 billion AI fund dedicated to AI gigafactories—high-performancecomputing centers that accelerate AI model training while ensuringaccessibility for SMEs and research institutions. These hubs aim to democratiseaccess to AI development, ensuring that not only large corporations but alsosmall and medium-sized enterprises can leverage cutting-edge AI capabilities(European Commission, 2025).

These initiatives signal Europe’s ambition to become aglobal AI powerhouse, reducing dependence on US tech giants and counteringChina's aggressive AI strategy. However, the key question remains: Is thisenough to keep up with global competitors?

Europe's strong emphasis on regulation ensuressecurity, but it can also hinder innovation. Dependence on US cloud providersand Asian semiconductor manufacturers highlights that Europe often plays therole of consumer rather than creator in key technologies. The pressing questionis: Should we continue focusing solely on risk mitigation, or is it timeto seize opportunities more proactively? And: Despite these ambitious projects,Europe’s fundamental challenge remains: Can regulatory-heavy approaches trulycompete with the agility of Silicon Valley and the strategic centralization ofChina’s AI sector? Yet, Europe’s technological dependence is not just a fundingissue—it is also a regulatory challenge. Can Germany streamline itsadministrative processes to match the speed of innovation seen elsewhere?

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Bureaucracy – Protection or Innovation Blocker?

Bureaucracy providesreliability, safeguards civil rights, and ensures long-term planning security.However, it can also act as a brake—through complex processes, slowdecision-making, and limited flexibility in times of crisis (IHK NRW, 2024).

As Harari (2024) describes in NEXUS:Eine kurze Geschichte der Informationsnetzwerke, bureaucracy is not just anadministrative tool but a strategic instrument that determines whichdevelopments are prioritised—and which are held back.

Other countries demonstrate alternative approaches.In Singapore and the UAE, bureaucracy is not dismantled but modernised:digital processes accelerate decision-making while maintaining legal certainty(HSBC, 2024). The United States, on the other hand, follows a differentpath—its policies are dynamic but often short-lived: one administrationintroduces a reform, the next reverses it.

Germany, too, has acknowledged the problem.The Pact for Acceleration (German Federal Government, 2023) isintended to simplify approval procedures. However, according to a surveyby IHK NRW (2024), 70% of businesses in NorthRhine-Westphalia believe bureaucratic requirements are excessive,while 80% criticise their complexity. Planning and approvalprocesses, in particular, are seen as obstacles to innovation. For example, arecent study by IHK NRW found that approval processes for renewable energyprojects take an average of 36 months—compared to just 12 months in Denmark

Germany is at a crossroads: Will it continue to tangleitself in red tape, or will it embrace an administration that is both stableand agile?

Germany Needs Smart Reform – Not Knee-Jerk Reactions

The solution does not lie in indiscriminatederegulation but in intelligent, targeted adjustments.

What does this mean in practice?

1. Fast, digital, efficient –Administrative processes should be fully digitalized.

2. AI-powered governance – Public services should leverage AI forautomation.

3. Smart, not rigid – Regulation should anticipate technologicalshifts rather than obstruct them.

Denmark and Estonia demonstrate that modernadministration does not have to come at the expense of data protection andcivil rights. Similarly, the UAE has developed governance models that strategicallyintegrate technology into policymaking (HSBC, 2024).

Germany does not need another decade of debate. Itneeds a strategy that merges stability with innovation—before it is overtakenby more agile economies (Tanner, 2025).

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Conclusion – Do We Need to Rethink?

Change is inevitable. The realquestion is: Will we shape it—or will we be shaped by it?

The United States shows that unregulated speed canlead to instability. China proves that technology is the key to power. ASEANcountries demonstrate that agility fosters growth.

And Germany? It stands between stability andtransformation, between regulation and innovation. It does not need the hastystrokes of an oversized marker but the precise strategy of a Montblancpen.

A smart reform means: streamlining bureaucracywithout sacrificing stability, digitalising administrative processes withoutcompromising civil rights, and building technological independence withoutresorting to protectionism.

Germany needs a new strategic approach. Thequestion is not if change is necessary—but how we actively shapeit.

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References

• Bernath, M., &     Tanner, S. (2025, 16 February). Der riskante Friede. NZZ     am Sonntag, S. 2–3.
• Bundesregierung Deutschland. (2023, 8 December). Pakt für Beschleunigung.https://www.bundesregierung.de/breg-de/aktuelles/pakt-fuer-beschleunigung-2246290
• European Commission. (2023, 21 September). European     Chips Act enters into force today. https://digital-strategy.ec.europa.eu/en/policies/european-chips-act
• Harari, Y. N. (2024). NEXUS: Eine kurze Geschichte der Informationsnetzwerke von     der Steinzeit bis zur künstlichen Intelligenz (J. Neubauer &     A. Wirthensohn, Trans.). Penguin Verlag. (Original work published 2024)
• HSBC. (2024, 15 October). Smart mobility     transforms cities in the Middle East. HSBC Business. https://www.business.hsbc.com/en-gb/insights/sustainability/smart-mobility-transforms-cities-in-the-middle-east
• IHK NRW. (2024, 5     January). Stellungnahme zur Anhörung: Der Rezession in Nordrhein-Westfalen entgegenwirken – Bürokratieentlastung jetzt umsetzen. IHK     NRW – Die Industrie- und Handelskammern in Nordrhein-Westfalen e.V.
• PubAffairs Bruxelles. (2023, 21 September). Digital sovereignty: European Chips Act enters into force today.https://www.pubaffairsbruxelles.eu/eu-institution-news/digital-sovereignty-european-chips-act-enters-into-force-today/
• Tanner, S. (2025, 16 February). Ein bisschen Musk täte der Schweiz gut. NZZ am Sonntag, S. 11.

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