Imagine there’s money – and nobody takes it. This just about sums up the situation in quite a few German municipalities when it comes to digital transformation.After all, there are numerous funding programs in place at the federal level to support German cities, towns and villages on their way to becoming digital communities, ranging from B for broadband expansion to T for transport systems. However, many municipalities do not call these funds.
Complex funding processes, unused funds
Why is that? Funding processes are often too complicated and municipalities lack the manpower necessary to fight their way through the required applications. This is clearly reflected in the Smart City Readiness Check carried out by us at TÜV Rheinland together with the Innovators Club of the German Association of Cities and Towns. In this check, more than 100 municipalities from all over Germany answered our questions on the key issues of digital infrastructure, eGovernance, mobility and energy. And only a few of them are really ready for the digital future.
Broadband expansion – without sustainable infrastructure municipalities will become less relevant
Only two out of three municipalities participate in nationwide programs that promote broadband expansion. For many of them, the funding process is simply too complicated – as our experience from advising German cities and towns shows. As a result, funds are left unused which are of tremendous importance for the long-term future of a community or city. In addition, just under half of all municipalities participating in the survey report having high-performance networks offering speeds of more than 50 Mbit/s. But those who do not want to be left behind digitally should invest in such networks sooner rather than later. After all, they are the basis for a nationwide expansion of the new 5G mobile communications standard – and thus for an infrastructure that is attractive for companies in the long term.
Investments are only made when they save costs
Our questions on eGovernance, mobility and energy in the Smart City Readiness Check also reveal that German municipalities are not really ready for digitalization. While many municipalities are willing to invest, this willingness is limited to cases where direct cost savings can be achieved – for example by implementing technology for greater energy efficiency in public buildings. Local governments obviously find it difficult to make significant and long-term investments in technologies for the future.
On the way to a smart city: municipalities need advice and funding models
So what needs to be done to accelerate the digital transformation of municipalities? From our point of view, one approach that can have a direct impact is providing advice on funding programs. This is something we can do as TÜV Rheinland. In addition, an effort should be made to develop digitalization projects should that can be applied to several municipalities. No municipality has anything to gain from reinventing the wheel every time. Good funding models could be used quickly and easily by local governments for investing in their digital future. Otherwise they run the risk of being left behind digitally.
Find out more about the Smart City Readiness Check here. The Innovators Club of the German Association of Cities and Towns and TÜV Rheinland will present the survey with many details at the Smart City Plaza at the “Fiberdays19” trade fair in Wiesbaden on 28 and 29 March.
Gürkan Ünlü is Head of Business Development at TÜV Rheinland Consulting and Head of the Corporate Center of Excellence Data Analytics at TÜV Rheinland.