Executive Summary

The opportunity: a digital world that works for everyone

The digital transformation has the potential to create many opportunities. Beyond economic gains ¹, the ever deeper integration of the internet and development of new technologies can considerably improve the way we all live and work.

Self-driving cars could make getting around safer and more convenient. Health-monitoring mobile apps can already help us live healthier and even diagnose new diseases more accurately. The internet has also significantly lowered the costs of starting new businesses and is helping us to share unused resources more effectively. However, to unlock the full benefits of the digital transformation, we need to build digital societies that are inclusive and that work for everyone.

The challenge: public buy-in is key

A successful digital transformation depends on building a digital world that is inclusive and works for everyone. This means that the public needs to be willing and confident to use it. If innovations are introduced in the wrong manner, or the gains too unevenly distributed, public opposition could become a major barrier. The political events of 2016 have certainly shown that ignoring the pulse running through society can lead to heavy and unforseen backlash.

The business community developing new technologies, and governments shaping policy agendas, need to understand how the public responds to the digital transformation to unlock its full potential.

Therefore, this report asks two crucial questions:

• How ready are people for the digital life?
• If they are not, what is holding them back?

"If you don't bridge the societal divide, you're going to go nowhere with Industrie 4.0 or the Internet of Things or anything else a lot of techies and companies are talking about. That's something that leaders of companies had better think about. They need to ask themselves, 'How do I deal with the digital divide, the societal divide? How do I make sure that I bring people along...?"²
Joe Kaeser, CEO of Siemens AG

As this report shows, the majority of Germans are not ready, or equipped with key skills, to make the most of the technological opportunities that already exist. Of all the Europeans included in this research, Germans also tend to be the most sceptical.

The new data behind this report

Which questions did we ask?

We investigated two key questions:

How open are people to using new technology in their life?

We tested how the public responds to a range of 'hot topics' that are currently taking centre stage when media, politicians and businesses debate the opportunities of the digital transformation. In particular, we tested three areas:

• (New) everyday technology
• Robotics
• Sharing economy

For each of these areas, we presented people with examples of how they could personally benefit and asked them whether they would be open or interested in using the new technology.

You will learn what we found in chapter one of this report.

What are some of the potential issues?

Many factors play into people's relationship with technology. Some of those, like cultural norms, are difficult to test comprehensively across countries. In this research, we focused on four key areas that need to be considered by politicians, policymakers and businesses in each country:

• Do people generally see technology as an opportunity, or as a threat?
• Do people feel that the technological benefits are equally spread across society?
• Do people have the basic skills to actively use technology?
• What threats or problems do people worry about?

You will learn what we found in chapter two of this report.

Which countries did we include?

Readie, together with ComRes, surveyed 9,000 adults from economies representing the North-West, South, Central and East European regions. The countries included were Bulgaria, Estonia, France, Germany, Italy, Poland, Spain, Sweden and the UK. To be representative of all adults aged 18+, the data was weighted by age, gender and region.

Key findings

How open are Germans to using new technology in their life?

Germans tend to be most sceptical about new technology in European comparisons. Bulgarians and Spaniards are often the most open-minded and excited.

German men, compared to German women, are considerably more willing to try new technologies, such as driverless cars (42 per cent vs 28 per cent) or get brain surgery from a robot (39 per cent vs 23 per cent).

Millennials are also more open to new technology than older generations. This includes using different digital platforms and also sharing their own resources online, which 30 per cent of Germans aged 18-34 years are open to renting out their home versus only 8 per cent of those aged over 55.

Germans with a university degree are more open to trying a range of new technologies including driverless cars and letting a robot look after family, compared to adults without a university education.

What are some of the potential issues?

Germans think that the benefits of the internet and digital technology are not spread equally across society. Large businesses, people living in towns and cities, and those under 30 years old are seen as the biggest beneficiaries.

Many Germans lack the skills to actively use technology. Although 95 per cent say they are confident writing and sending emails, only 9 per cent are confident using code to develop software. Furthermore, only three in ten German employees say they are offered basic digital training by their employers. Employees in the old Bundesländer (West Germany) are being offered more training opportunities than those in the new Bundesländer (East Germany).

When asked to consider the issues of technological change, Germans rank the increase in cybercrime, such as hacking, infringement of privacy and stolen data, the breakdown of face-to-face relationships, and potential access to dangerous products amongst the biggest problems. Job loss due to automation was the smallest concern.

1. How open are Germans to using new technology in their life?

How keen the public is to use new technologies varies greatly between European countries

2017 Readie Ranking.

How open is the public to using new technology?

This ranking measures public openness to using new technologies in the nine EU countries tested. We combined responses to the eleven examples of technology use cases discussed in this chapter. For each question, we ranked the 9 countries according to the responses. The top country received a score of 9, the lowest a score of 1. We then computed for each country the mean rank over all questions.

*Average of the nine European countries tested in this research

The ranking shows how open the public in different European countries is to using a variety of different technologies.

We tested three 'hot topic' areas that are becoming increasingly central to political and business debate around the opportunities of the digital transformation:

• (New) everyday technology
• Robotics
• Sharing economy

We found that the German public tends to be most sceptical compared to other countries.

The following pages compare German results to the European average* and results from Bulgaria, which topped our ranking.

(New) everyday technology

Digitalisation is opening up new ways to travel, pay for things, or track our health. This also provides new opportunities for businesses and society.

Volvo, Porsche, BMW, Waymo and Bosch are among the companies prototyping autonomous vehicles in Europe, which are predicted to reduce road accidents by up to 90 per cent.³

Paying digitally, with contactless cards or smartphone applications, is becoming increasingly popular across Europe. In Sweden, over 80 per cent of all payments are already made digitally.⁴

"Cash, I think, in ten years' time probably won't exist. There is no need for it. It is terribly inefficient and expensive." ⁵
John Cryan, Chief Executive of Deutsche Bank

However, our research shows that the majority of Europeans - and in particular Germans - are not comfortable using what is already technologically possible.

Only a minority of Germans are open to using new technology

Q: Would you be willing to do each of the following, or not? Yes / No / Don't know *Average of the nine European countries tested in this research

Robotics

Dsytopian scenarios about robots taking our jobs and destroying humanity are manifold. But, what doesn't grab so many headlines are the many exciting developments in robotics that are providing social benefits to communities worldwide.

Promising pilots taking place across Europe include the Giraff telepresence robot, which monitors the wellness of older people, connects them to healthcare professionals and allows them to live independently for longer.⁶ Nao, a humanoid robot measuring just 60 centimetres high, is being used in schools to better help autistic children.⁷ In September 2016, University of Oxford surgeons performed the world's first eye operation using a robot that can perform high-precision procedures much better than the human hand.⁸

All these robots already exist, but we found that the majority of the German public is not ready to live with them.

Q: Would you be willing to do each of the following, or not? Yes / No / Don't know *Average of the nine European countries tested in this research

Sharing economy

The economic gains from better use of resources in the sharing economy is estimated at €572 billion.⁹ People can now use digital platforms and mobile apps to share resources more effectively and organise transport, find accommodation or raise money for projects.¹⁰

Participating in the sharing economy is relatively easy and accessible - especially compared to the other technological opportunities we tested. Still, we found that far fewer Germans have ever used those opportunities than for example Bulgarian adults.

Who has ever participated in the sharing economy?

Q: How frequently if at all do you do each of the following? Every day / Every few days / Every few weeks / Every few months or less / Never (This question was not included in the 2017 Readie Ranking.) *Average of the nine European countries tested in this research

The potential of the sharing economy reaches much further beyond using commercial platforms. Digital platforms enable people to share property, resources, time and skills - and sometimes make a little extra money in the process.

Yet, the majority of Germans say they would not want to share their own resources.

Are Germans willing to share their own ride, house or cash with others?

Q: How happy or otherwise would you be to do each of the following using the internet? Would be very happy to / Would consider it / Would prefer not to / Would definitely not do / Don't know *Average of the nine European countries tested in this research

Demographic differences

In Germany, men, people under 35 and people with a university degree tend to be most open.

How does the willingness to use new technologies differ within Germany?

We tested a range of demographic factors: age, gender, education, income and if people live in cities or rural areas. Interestingly, the most significant* demographic factors differed from country to country.

Gender

German men are significantly more likely to say they are willing to try most of the technologies we tested than German women. Here are a few examples:

% UK GERMANS WILLING TO

Education

Germans with a university degree are significantly more open to trying a range of new technologies, including:

% GERMANS WILLING TO

*Significant refers to differences at the 0.05 significance level

Age

Young adults (aged 18-34 years) are significantly more open to trying most of the technologies than older generations (55+ years).

% GERMANS WILLING TO

Likewise, young adults are most open to using the internet to share their own resources online.

% GERMANS WILLING TO

What about the other factors?

Rural versus urban

Whether Germans live in cities or rural areas tends to make little difference to their openness to using new technologies. This is different in other countries. In Sweden, those living in cities are significantly more open than people from rural areas.

Old versus new Bundesländer

We also did not find a significant difference between the old and new Bundesländer. In the UK by contrast, Londoners are significantly more open than those living in other regions of the country.

Income

Public openness was surprisingly similar across different income groups in Germany. For example, in France, income is a significant demographic factor, meaning that the more people earn, the more open they tended to be to new technologies.

2. What are some of the potential issues?

Technology itself is not the problem - the majority is excited about its potential

The vast majority of Europeans say they are generally positive about technology. This is also true for Germans.

Interestingly, East Germans (71%) are significantly more likely than West Germans (63%) to think that change in culture and society is usually a good thing.

74% of Germans say they are excited about the future and the opportunities that new technology is bringing society.

73% of Germans say that the positives provided by the internet outweigh the negatives.

What could explain why so few Germans are willing to embrace many new innovations?

Many factors such as personal preference, experience, social background and cultural norms play into people's relationship with technology.¹¹ Nonetheless our research identified three broad issues that government and businesses should consider. Tackling these will likely help people build confidence and trust in new technology.

1 Many think that the benefits are not shared equally across society

The digital transformation does bear opportunities for everyone. To create a truly inclusive digital society, everyone needs to feel like they will benefit from the digital transformation. However, the majority of Germans perceive large businesses, those under 30 years old and people living in towns and cities as the main beneficiaries of the digital transformation.

Who has benefited more from the digital transformation?

German men are more likely than women to say they have benefited personally (44 per cent vs 37 per cent).

The market for technology to assist ageing adults is actually already worth billions of euros and is growing rapidly.¹² The internet has also substantially lowered the setup costs for new businesses and entrepreneurs,¹³ who are just a click away from potentially millions of customers and international markets. Those opportunities need to be developed and promoted more widely.

How does this compare to other countries?

Most other European countries we studied face similar challenges. Many adults said they thought that large businesses, those under 30 years old and people living in towns and cities are the biggest beneficiaries of the digital transformation.

Estonia is an exception to this. Here, only 25 per cent believe other people in their country have benefited more then they have personally. Almost twice as many (47 per cent) people see themselves as the main beneficiaries of the internet and new technology. It was also in Estonia where people thought both large and small businesses benefited equally from technological developments.

There are probably a few things to be learnt from the Estonian approach. Estonia has strongly focused on implementing online technology across society to simplify day-to-day living - from filing taxes online to parents accessing their children's school timetables, homework, and marks.

Other countries, including Germany, might want to think more actively about how they can support technology that has a clear public benefit, and also communicate the opportunities of the digital transformation more strongly in those terms.

2 Only a minority of Germans have the digital skills needed to actively use technology

Everyone needs digital skills

In a world that is increasingly digital, everyone will need a basic level of digital literacy to have the confidence and ability to use new technologies.¹⁴ This equips everyone with the ability to not simply be passive consumers of technology, but active agents, or 'digital makers', who can improve their lives and those around them.¹⁵

The future workforce will need to complement developments in new technology. Optimists hope that machines will not replace human workers, but collaborate with them, taking over laborious tasks like heavy lifting or routine work while humans can focus on more creative, complex work and direct the robots.¹⁶

For this to happen, workers will need the necessary digital skills and understanding of technology. Among those core skills required is the ability to code and programme. Many of the roles which do not require direct coding skills will still need a greater understanding of digital technologies.

But what are those skills?

'Digital skills' encompasses a broad spectrum of roles and abilities, from understanding how a computer works to learning how to use social media responsibly.

We tested how confident European adults feel in three important skills:

• building a website
• coding
• building a computer

These are skills not just needed by those in 'technical jobs'. They allow people to strengthen their basic understanding of technology and can be seen as key building blocks of the digital transformation. Importantly, they also empower people to use technology to their own advantage: from building a website to announce a new sports club, to being able to run a small business online.

Digital skills confidence amongst German adults

While 95 per cent of German adults say they are confident writing and sending emails, less than one in ten (9 per cent) say they are currently confident using code to develop software.

Q: If you were asked to do each of the following today, how confident or otherwise would you be in your ability to do each one? Very confident / Fairly confident / Not very confident / Not at all / Don't know *Average of the nine European countries tested in this research

The digital skills divide deepens between gender and age

German men are more confident than German women in their digital skills

Gender and age are again important factors when it comes to the confidence Germans have in their digital skills.

Men are almost twice as likely to say they feel confident to use code to develop software (12 per cent of men vs 7 per cent of women) and four times more likely to say they feel confident to build a computer (42 per cent of men vs 10 per cent of women).

Q: If you were asked to do each of the following today, how confident or otherwise would you be in your ability to do each one? Very confident / Fairly confident / Not very confident / Not at all / Don't know

German young adults are most confident in their digital skills

Young adults aged between 18 and 34 are also significantly more confident than older generations.

All adults - regardless of age, gender and background - need a basic level of digital skills to confidently participate in an increasingly digital world.

Some progress has been made to equip the future workforce with digital skills. In 2016, Johanna Wanka (German Federal Minister for Education) pledged to invest €5 billion over the next five years in schools' digital infrastructure and provide equipment to develop skills at a young age.¹⁷ With other countries, like the UK, already having implemented programming into the national curriculum back in 2014, this is an important step in helping Germany keep pace with the rest of Europe.¹⁸

However, what about people already in the workforce?

Q: If you were asked to do each of the following today, how confident or otherwise would you be in your ability to do each one? Very confident / Fairly confident / Not very confident / Not at all / Don't know

Businesses have to play a more active role empowering the existing workforce

Employers can, and have to, play an important role in equipping today's workforce with the skills needed tomorrow.¹⁹ Clarity around new roles and access to training and development opportunities are key areas businesses need to tackle, and where government should support as needed. A higher level of digital literacy can also help to address some of the German scepticism towards new technology. This will be essential to building a globally competitive digital economy.

Our research, however, found that less than three in ten German adults are being offered basic digital training by their employers. Even fewer have access to advanced digital training, for example to learn how to code. More employees in the old Bundesländer have access to training compared to those in the new Bundesländer.

West Germans are offered more digital skills training than East Germans

% German employees offered training

Q: Which of the following, if any, does your employer offer to employees? Please select all that apply

3 Data security and cybercrime are a concern for many Germans

The vast majority of Germans, like other European respondents, generally believe that technology and the internet positively impact their lives (see page 13).

However, concerns remain. Understanding these can help companies and national governments prioritise areas that may require dedicated focus. Building awareness and communicating strategies or programmes that are tackling challenges clearly can also help build public trust and confidence.

So, what are some of the key concerns the German public has about digital technology and the internet more broadly?

We tested a variety of potential issues. In Germany, cybercrime such as hacking, infringement of privacy, and stolen data, is perceived as the top problem caused by the internet. Germans also said that one of the biggest priorities for their government should be to protect people's data from cyberattacks.

Some of these concerns might be heightened in Germany for historic reasons that create a stronger fear of being tracked or monitored.²⁰ Previous research has shown that nine in ten Germans worry about data security when using mobile payments,²¹ which explains the particular aversion of Germans to digital payments that we found.

Interestingly, some issues like job automation - which many in the business and policy community currently worry about - was the smallest concern of those tested in our study.

Germany says the top three problems are

1. Increase in cybercrime (e.g hacking, stealing people's data, infringement of privacy)
2. The breakdown of face-to-face relationships
3. Making it easier to access dangerous products, (e.g guns, drugs)

Q: Which of the following issues regarding digital technology and the internet do you think should be the biggest priority for your national government? Q: Which of the following, if any, do you think are the biggest problems caused by the internet?

3. Summary

Digital technology is creating many opportunities for people and businesses across Europe but the pace of change brings unique challenges when designing digital policies and national strategies.

The majority of Germans are not ready, or equipped with key skills, to make the most of the digital transformation. Developments in technology should benefit everyone regardless of gender, education or age. However, as our research shows, in Germany a number of groups - older people, those without a university degree and women - tend to be particularly unprepared and unwilling to engage with the opportunities digital change offers.

Governments and businesses must consider more carefully how open different sections of the population are to new technologies. It is clear that many people are optimistic about the future. Building confidence is key to empowering people to trust and embrace new technology which has potential to improve all our lives.

But, this report is just the start of the conversation.

That's why Readie is working with governments and businesses across Europe, to help them make sense of the challenges and harness the opportunities. By sharing experiences of what has, and hasn't, worked we can help Europe drive digital economic growth and prosperity. Get in touch to find out about our programme: [email protected]

We would like to thank the following people for their valuable input and comments:

Kimberley Ballantyne, Rebekka Rumpel, Paul Brodersen, Jan Domanski and Jon Steinberg. Also Siddharth Bannerjee, Katja Bego, Simona Bielli, Tom Blathwayt, Brenton Caffin, Christopher Haley, Teo Firpo and Lydia Nicholas.

Thank you to the team at Data Design.

Thank you to the team at ComRes, who gathered the data underlying this report by interviewing over 9,000 adults online between 15th and 26th August 2016 in the nine countries included in this study.

All errors and omissions remain those of the authors.

About Readie and Nesta

About Readie

Readie is a centre dedicated to empowering policy and decision makers with cutting edge insights into the big debates and policy solutions for Europe's digital economy. We provide a platform for sharing existing policies, key trends and innovative approaches to foster digital economic growth.

Readie is managed by Nesta, the innovation foundation, and supported by Google, RKW and NEMODE as part of the Research Council's UK Digital Economy research programme.

readie.eu @ReadieEU

About Nesta

Nesta is a global innovation foundation. Our mission is to spark and grow new ideas to improve how the world works for everyone. We use our knowledge, networks, funding and skills to take on big challenges, working in partnership with others to make change happen.

We are a UK charity and our work is enabled by a financial endowment. Nesta is a registered charity in England and Wales 1144091 and Scotland SC042833.

nesta.org.uk @nesta_uk

Endnotes