Germany's startup policy blasted

The country's IT association has critcised the government's approach to supporting young IT companies, saying more legislation is urgently needed.

Despite all the hype around the Berlin startup scene, when it comes to promoting fledgling IT companies, the German government's approach needs work, according to the country's IT industry association.

Thorsten Dirks, president of Bitkom and head of Telefónica Deutschland, described its startup policy as "vague" when the group released its review of Germany's Digital Agenda this week.

Adopted by the government last year, the Digital Agenda is an ambitious three-year plan which aims to use technology to promote growth and employment, improve the country's IT security, and boost broadband speeds and technological literacy in Germany.

Image: Telefonica Deutschland

Overall, Bitkom gave the government high marks. Out of 121 initiatives outlined in the Digital Agenda, which will run until 2017, 36 have already been implemented and another 60 have been started. Only 25 of the action points have yet to be touched.

However, Dirks was critical of the lackluster help for startups, saying more commitment to funding small ventures is needed.

"Ironically, regarding startups, the Digital Agenda remains vague," Dirks said. The telecoms exec advocated cutting the bureaucratic red-tape that can hinder smaller firms, especially in their first four years of existence. He also said that new legislation around venture capital law is urgently needed to spur investment in young companies.

German venture capital-backed tech firms attracted about $1.28bn in funding in 2014, according to CB Insights, a dramatic increase over the $578m raised the previous year, but it still pales in comparison to $21.8bn that flowed to California startups in 2014.

In addition to more startup support, Bitkom said that education and training is another key area that the German government should focus on. The industry association advocated for better IT equipment in schools and teacher education in technology. German schools should also be tasked with teaching pupils media literacy, add compulsory computer science for all students and begin English lessons in the first grade, the association said. (Now, German grade school students usually begin learning English in the third grade.)

"Above all, we must strengthen Digital in VET [vocational education and training]," Dirks said. "These are necessary measures for continuing education for all employees in the sense of lifelong learning." Dirks also raised the question of whether the increasing digitization of the economy would require even traditional occupations such as locksmiths or electricians to adapt.

Outside of these critical issues, Bitkom gave many other aspects of the German Digital Agenda high marks. Dirks highlighted the recent auction of 700MHz frequencies as key for broadband network deployment. He also praised the adoption of a recent law on improving IT security and the development of a test track on the autobahn for driverless cars.

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