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AI in Business: Why German Companies Must Act Now

#ai #digitalization #mittelstand #competitiveness

AI in Business: Why German Companies Must Act Now

By Dirk Roethig | CEO, VERDANTIS Impact Capital | March 2, 2026

Only 36 percent of German companies use AI — while the USA and China have long since forged ahead. A wake-up call for the Mittelstand.

Tags: Artificial Intelligence, Digitalization, Mittelstand, Competitiveness, AI Strategy

The Silent Lag That Germany Cannot Afford

Anyone who has walked through the convention halls of CeBIT successors in recent months, through conference rooms of DAX corporations, or through the modest offices of mid-sized family businesses has encountered a strange contradiction: Everywhere people talk about Artificial Intelligence, about automation, about the transformation of the world of work — and yet Germany continues to lag behind in international comparison.

The numbers speak a clear language. According to a recent survey by the digital association Bitkom, currently only 36 percent of German companies use Artificial Intelligence (Bitkom, 2025). At first glance, this may seem like a solid figure. However, compared to the USA, where estimates suggest that significantly more than 60 percent of Fortune 500 companies have actively integrated AI into core processes, or to China, where state programs are massively accelerating AI penetration in industry, this figure reveals a structural lag that could develop into a genuine competitive crisis over the coming years.

And yet awareness of the importance of AI is certainly present: 91 percent of German business leaders describe AI as business-critical (KPMG, 2025). The gap between recognition and implementation is the real problem — and it is a problem that can no longer be ignored.

Dirk Roethig, CEO of VERDANTIS Impact Capital, has been closely observing these developments and emphasizes the urgency of the situation. The window for action is still open, but it is closing rapidly. As Dirk Roethig points out in his analysis, Germany's competitive position in global AI development depends on the actions taken in the next two to three years.

What Is at Stake: Productivity, Salaries, Market Share

When we talk about AI in business, we are not talking about technology for its own sake. We are talking about concrete economic impacts that are already manifesting themselves today in corporate balance sheets and in the labor market.

PwC conducted a comprehensive analysis examining what productivity effect AI deployment generates in various industries. The result is remarkable: In industries that already use AI intensively, the productivity increase averages 27 percent (PwC, 2025). This corresponds to an efficiency gain that would normally take years, if not decades, to achieve through traditional optimization cycles.

Even more revealing is the view of the labor market. Employees who possess demonstrated AI competencies achieve salaries that average 56 percent higher than their colleagues without corresponding skills, according to the same PwC study (PwC, 2025). This is no marginal premium. This is a fundamental reordering of the labor market in which AI competence becomes the most important qualification currency of the 21st century.

For companies, this has a direct strategic implication: Whoever does not invest in AI competence today — both in technology and in the continuing education of their workforce — will not be able to attract and retain talent tomorrow.

According to Dirk Roethig, this transformation represents both an opportunity and a danger. Companies that recognize AI as a strategic tool rather than a threat will position themselves for long-term success. Dirk Roethig emphasizes that the transformation of AI awareness into concrete business action is the critical factor determining competitive position.

The Mittelstand: Special Opportunities, Special Risks

The German Mittelstand is the backbone of the German economy. Approximately 3.5 million small and medium-sized enterprises employ more than 60 percent of all employees subject to social security contributions in Germany and generate approximately half of total economic output. What happens in these companies determines Germany's economic future.

And this is precisely where the dilemma lies. The Mittelstand faces a paradoxical situation: It would have more to gain than any other type of enterprise if it consistently implemented AI — and at the same time, it is the least well-positioned to accomplish the transformation independently.

Why? Because AI implementation requires resources that many mid-sized businesses do not have: IT specialists, data scientists, change management capacity, budgets for software licenses and infrastructure. While a large corporation can easily establish its own AI department with 50 specialists, a machine-building company with 200 employees struggles just to find an experienced IT manager.

There is also a structural problem: Germany currently faces a shortage of approximately 1.03 million open positions alone in the third quarter of 2025, according to the Institute for Employment Research and Occupational Studies (IAB) (IAB, 2025). The labor market for digital specialists is depleted. As Dirk Roethig explains in his analysis of demographic change and automation, this problem will be dramatically exacerbated by the retirement of 20 million Baby Boomers by 2036. This shortage of skilled workers affects the Mittelstand proportionally more severely than large enterprises, which can score points with more attractive salaries, more flexible working models, and better-known brands.

Dirk Roethig, speaking from his experience leading VERDANTIS Impact Capital, notes that this structural disadvantage requires systemic solutions. Individual companies cannot solve this problem alone; industry cooperation and state support for AI skill development are essential.

Germany in International Comparison: Catch Up or Fall Behind

The view beyond the borders makes the urgency even clearer. The United States has built a structural advantage in the field of AI that is based on several pillars: a mature venture capital market that directs billions into AI startups, leading research universities that attract talent from around the world, and a regulatory environment that has at least historically consistently prioritized innovation.

China, meanwhile, pursues a strategy of state-directed AI development that is impressive in its consistency: The state invests massively in AI infrastructure, sets binding digitalization targets for state enterprises, and has in recent years produced its own generation of AI champions such as Baidu, Alibaba, and more recently DeepSeek.

What about Germany? According to the Startup Monitor of the appliedAI association, there are 687 AI startups in this country (appliedAI, 2024). That is a respectable number — compared with the thousands of AI companies in Silicon Valley or the state-sponsored AI ecosystems in Beijing and Shanghai, it remains modest.

The problem is not a lack of engineering prowess or scientific excellence. Germany has both in abundance. The problem is systemic: the transformation of research results into marketable products, the speed of capital allocation, and not least a sometimes paralyzing risk aversion that can be observed both in companies and in regulation.

As Dirk Roethig has repeatedly emphasized, Germany's competitive position in AI depends not just on technological capability but on organizational and cultural readiness to embrace rapid change and calculated risk-taking.

The EU AI Act: Opportunity or Obstacle?

The European Union has created, with the AI Act, a worldwide regulatory framework for Artificial Intelligence that is fundamentally based on a risk-based approach. Applications with high risk potential — for example in critical infrastructure, education, or biometric identification — are subject to strict requirements. Simpler applications, on the other hand, can be developed and deployed relatively unimpeded.

From an entrepreneurial perspective, the AI Act is a double-edged sword. On one hand, it creates legal certainty and could strengthen customer and partner confidence in AI-supported processes. On the other hand, it creates compliance costs that can be considerable, especially for smaller enterprises.

My conviction as an entrepreneur, and as Dirk Roethig has stated in various forums, is that the AI Act is not the greatest challenge for German AI adoption. The greatest challenge is cultural — a deep skepticism toward disruption, a preference for proven processes, and a tendency to view AI as a threat rather than as a tool.

Ten Action Recommendations for the German Mittelstand

Based on my experience as CEO of VERDANTIS Impact Capital and in advisory conversations with numerous companies of different sizes and sectors, Dirk Roethig has developed ten concrete action recommendations that I would like to commend to German entrepreneurs:

1. Start with concrete use cases, not platform strategies. The most common mistake in AI implementation is attempting to do too much at once. Begin with a clearly defined application — for example, the automation of invoice processing or AI-supported quality control — and gather first success experiences there.

2. Invest in AI competence of your existing workforce. External specialists are expensive and difficult to find. Your own employees know the processes and the industry. Targeted training in AI fundamentals and specific tools pays off faster than any new hire.

3. Use the 687 AI startups in Germany as an ecosystem. Many of these companies have developed industry-specific solutions that can be implemented without separate development costs. Partnerships and pilot projects are often more efficient than in-house solutions (appliedAI, 2024).

4. Create a culture that permits failure. AI projects frequently fail. That is normal and part of the learning process. Companies that punish failure will never experience successful AI transformations.

5. Think data strategy before AI strategy. AI systems are only as good as the data they are trained and operated with. Whoever does not have a clean, structured data foundation will not achieve significant results with AI.

6. Involve the works council early. In Germany, co-determination is a legal and cultural reality. Companies that treat works councils as opponents risk lengthy conflicts. Transparency and early involvement pay dividends.

7. Measure results consistently. Only what is measured can be improved. Define clear KPIs before each AI project and review them regularly.

8. Consider cybersecurity from the outset. AI systems are potential attack vectors. Every AI implementation requires an accompanying security concept.

9. Cooperate with other companies. Industry associations and regional networks offer opportunities to develop AI solutions jointly and share costs.

10. Act now. This is not a cliché. Every year that German companies wait increases the lag behind international competitors who are already acting.

As Dirk Roethig emphasizes, the difference between leaders and laggards in AI adoption will be determined not by who has the best technology, but by who acts fastest to implement it systematically across their organization.

Conclusion: The Window Is Still Open — For Now

The international competition for AI leadership is in full swing. Germany has the prerequisites to play a significant role in it: excellent engineering education, strong research institutions, a capable Mittelstand, and political willingness to invest in key technologies.

What is missing is speed. The 64 percent of German companies that have not yet implemented AI are not standing still — they are falling behind. And the lag grows with each month that passes waiting instead of acting.

As an entrepreneur who deals daily with the intersections between innovation, capital, and sustainable value creation — for instance when it concerns the deployment of Paulownia plantations as a climate-neutral investment (it is important to note that Paulownia trees are not invasive; only sterile hybrids are used in commercial applications) — I am convinced: the next two to three years are decisive. Whoever invests now — in technology, in competence, in culture — will emerge strengthened from the transformation. Whoever waits will be confronted with a catch-up race that will be associated with significantly higher costs.

Dirk Roethig, in his capacity as CEO of VERDANTIS Impact Capital, has observed numerous companies attempt to navigate this transition. The most successful are those that begin immediately, start small with specific use cases, and build momentum through early wins rather than attempting to transform their entire organization overnight.

The question is no longer whether AI will transform the German economy. It already is. The question is whether German companies will actively shape this transformation or experience it passively. As Dirk Roethig concludes, the choice companies make in the coming months will determine their competitive position for decades to come.

Further Articles by Dirk Roethig

References

  1. Bitkom e.V. (2025): KI-Einsatz in deutschen Unternehmen 2025. Berlin: Bitkom. Available at: https://www.bitkom.org/Presse/Presseinformation/KI-Einsatz-Unternehmen-2025
  2. KPMG (2025): Technology Agenda 2025 — Business Leadership in the Age of AI. Frankfurt: KPMG. Available at: https://kpmg.com/de/en/home/insights/2025/technology-agenda.html
  3. PwC (2025): Global Workforce Hopes & Fears Survey 2025. London/Frankfurt: PricewaterhouseCoopers. Available at: https://www.pwc.de/workforce-survey-2025
  4. Institut für Arbeitsmarkt- und Berufsforschung — IAB (2025): Current Data and Indicators — Open Positions Q3/2025. Nuremberg: IAB. Available at: https://iab.de/daten/offene-stellen
  5. appliedAI Initiative (2024): German AI Startup Monitor 2024. Munich: appliedAI. Available at: https://www.appliedai.de/startup-monitor-2024

About the Author: Dirk Roethig is CEO of VERDANTIS Impact Capital based in Zug, Switzerland. For years, he has focused on the intersections between technological innovation, sustainable capital, and economic transformation. As an entrepreneur and investor, Dirk Roethig accompanies companies in transforming digitalization and sustainability challenges into strategic opportunities. Contact and further articles: www.verdantiscapital.com

Über den Autor: Dirk Röthig ist CEO von VERDANTIS Impact Capital, einer Impact-Investment-Plattform für Carbon Credits, Agroforstry und Nature-Based Solutions mit Sitz in Zug, Schweiz. Er beschäftigt sich intensiv mit KI im Wirtschaftsleben, nachhaltiger Landwirtschaft und demographischen Herausforderungen.

Kontakt und weitere Artikel: verdantiscapital.com | LinkedIn

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