What are the new opportunities derived from building data literacy for medium sized businesses in Berlin? What kind of challenges are companies facing? And what framework conditions are there to support them in the digitalisation of their business areas? A new study by Technologiestiftung Berlin on the topic of the data economy is looking at these topics.
Around 80 percent of small and medium sized enterprises (SME) in Germany are digital newcomers. Collected data is “filed” in a largely unstructured manner and is rarely evalated. Companies often hesitate to tackle the topic of data literacy, because they lack the capacity and specialist know-how. How SMEs can use collected data in a way that benefits them, is illustrated by a recently published study on the topic of data economics by Technologiestiftung Berlin. The publication spanning 55 pages highlights the opportunities for Berlin’s SMEs. It also suggests what companies should do to stay up-to-date and it sketches framework conditions that can support their development.
“Data itself has no value. New opportunities and possibilities are only created through its evaluation and interconnection, e.g. the optimisation of production processes and the creation of innovative products,” says Nicolas Zimmer, chairman of Technologiestiftung Berlin. Companies that have been successful in the analogue world for years often find it difficult to think in a data-driven way and to embrace digital disruption. “Often they are also lacking the expertise. This is why only two percent of the companies have data strategies, for example. This has to change.”
Berlin scores with its beneficial innovative atmosphere
According to the study, Berlin has a fundamentally innovative atmosphere for the development of data-driven business models, because start-ups, especially in data-driven areas such as health, IT, FinTech, robotics and e-commerce are already very successful in the city. The supply of data on public life is also above average due to Berlin's Open Data Strategy. Additionally there are already a number of large enterprises in the city that share their data and so enable new developments. Germany-wide, there is a lot of potential in the optimisation of data usage by SMEs in general, because more than 50 percent of value creation takes place in small and medium-sized enterprises. An opportunity for the European economy is particularly evident in the industrial sector, because this is where the necessary infrastructure for the data-driven economy is currently built. The consumer sector, on the other hand, is already largely covered by the platform-based business models of large American companies.
Analysis of strengths and weaknesses
As particular strengths of Berlin the study lists, among others, the excellent research landscape (with lighthouse projects such as the Berlin Institute for the Foundations of Learning and Data (BIFOLD), the budding cooperation between research, start-ups and public authorities as well as the close cooperation with industry. Well-functioning support programmes (EXIST, Transferbonus, Innovationsassistent, etc.) also help to strengthen the framework conditions.
As a clear weakness of the city, the study identifies the fact that the important decisions are often made in company headquarters which are not located in Berlin. Especially among SMEs, there seems to be a lack of sensibility and know-how with regard to the use of their own data. Moreover, there are not enough experts like data analysts to create the framework conditions for the use of such data within the companies.
In addition to an analysis of the strengths, weaknesses, opportunities and threats (SWOT) of Berlin as a location, the Technologiestiftung Berlin study suggests how actors in Berlin can strengthen existing competences and build up missing ones to keep pace with the global developments in the data economy and to expand the city's prominent position in certain areas.
- A systematic expansion of training and study opportunities and the promotion of cooperation between research and business.
- The improvement of data literacy, which makes it possible to not only collect data, but also to evaluate, network and integrate it into other processes.
- Connecting Berlin’s excellent research and the innovative start-up scene with SMEs.
- The improvement of data literacy in the administration. They could give the impulses themselves by providing data and initiating and advancing their own data-driven projects.
- A data governance for the State of Berlin, where the conception and implementation take the aspect of data sharing and the use of corresponding structures into account.
The study named “Datenökonomie. Chancen und Rahmenbedingungen in Berlin” (“Data economy. chances and framework conditions in Berlin”) is based on Interviews with experts from business, science and administration as well as the evaluation of selected scientific publications and data. It was funded by the Senate Department for Economics, Energy and Public Enterprises.
- Study „Datenökonomie. Chancen und Rahmenbedingungen in Berlin" (in German only)
- Interview by Technologiestiftung Berlin with Ramona Pop, Senator for Economicst, Energy and Public Enterprises, talking about data literacy (in German only)