The emergence of ChatGPT in November 2022 has ignited a global surge in artificial intelligence (AI) development, yet a recent study indicates that only a small fraction of German companies are adequately prepared for the AI era. The AI Readiness Index by Cisco, surveying 8,000 companies across 30 countries, discloses that a mere 7 percent of German companies are equipped for the adoption of AI technologies, in stark contrast to the global average of 14 percent.

The gap between Germany and leading nations in AI readiness is particularly pronounced. The United States boasts an 18 percent readiness rate, with companies there benefitting from proximity to hyperscalers like Microsoft and Amazon, fostering a culture of reduced apprehension towards AI investments. In China, the figure stands at 9 percent, though nearly half of companies with over 500 employees classify themselves as followers, indicating a considerable AI presence in the country.

According to Christian Korff, a board member at Cisco Germany, there is a substantial AI force emerging in China. Investors worldwide are recognizing the pivotal role of AI in shaping future economies. The survey underscores that nearly all respondents believe the demand for AI technologies has surged in the past six months, with 61 percent of companies expressing concerns about potential business repercussions within a year.

While Germany exhibits commendable strategies and talent in a European context, it falls short of global and regional leadership. Despite 69 percent of German companies ranking in the advanced categories for strategy, comparable to the global rate of 73 percent, there is still room for improvement. The survey suggests that while Germany has pockets of excellence, the widespread integration of AI remains a challenging threshold.

In terms of strategy, German companies prioritize increasing productivity and efficiency (58 percent) and enhancing customer experience (53 percent). However, the development of new revenue streams lags behind, garnering only 28 percent of focus. Similarly, the integration of AI for workforce enhancement is a priority for only 29 percent of companies.

In areas of infrastructure and data, German companies exhibit subpar readiness. Only 34 percent fall within the advanced categories for infrastructure, compared to the global average of 47 percent. The situation is mirrored in the data category, where only 31 percent of German companies rank in the top two categories, as opposed to the global rate of 43 percent. Concerns over limited scalability, increased power consumption, and rising cybersecurity threats are prevalent among two-thirds of German companies.

The assessment of governance and culture presents a mixed picture for German companies. In corporate culture, there are minimal distinctions among European countries, with Germany at 42 percent, closely aligning with Sweden, Great Britain, Italy, Switzerland, and Poland (41 to 45 percent). However, in the governance category, Germany ranks third in Europe with 35 percent, trailing behind the global average of 44 percent.

Image by Tung Nguyen from Pixabay