A recent Bitkom study shows small businesses in Germany do not explore blockchain technology. Large-scale multinationals are much more active in the space.

As the advocates of more blockchain legislation in the German government become louder, a new study suggests German companies have already fallen behind. According to Bitkom, businesses’ use of blockchain is just about average compared to their international peers.

Bitkom study reveals Germany’s lack of blockchain enthusiasm

Bitkom is an association representing Germany’s digital economy. It currently includes more than 2,600 companies which are active in the digital space. In a recent study, it asked 1,004 companies, all having at least 50 employees, about their views on blockchain technology. All companies were either from the automobile industry, machinery & engineering, logistics, trade, energy & utilities, banking & insurance, or the public sector. Additionally, Bitkom conducted interviews with 14 German blockchain experts.

The findings are not flattering: 46% of survey participants believe German businesses lack behind their international competitors. 40% think Germany is about average. 10% even say Germany is far behind the international level of blockchain adoption. Not a single survey participant believes German companies are among the worldwide pioneers in the sector.

Bitkom president Achim Berg comments, “Blockchain is currently in an early stage; we still lack a broad spectrum of solutions for everyday use. However, blockchain technology has enormous potential and can disrupt many of our current business processes. That’s why companies have to get involved in research and development already today.”

Diversified landscape: Gap between small and big businesses

While small businesses are not blockchain-savvy, larger corporations are much more invested in the technology.  Only 2% of companies with 50 to 500 employees are using blockchain at any level of their organization. 4% are planning to do so. However, among companies with more than 500 employees, 17% are already using blockchain, and 27% are planning to use it.

That implies blockchain in Germany is more relevant for big businesses. Most innovations come out of multinationals like Daimler, Volkswagen, or E.ON. Startups are not that active in the field.

According to data from LSP Digital, there are 120 blockchain startups in Germany. 64 of those firms are based in Berlin. Not much, compared to the more than 750 firms clustered around Liechtenstein and Switzerland’s Crypto Valley.

German startups seek their fortune elsewhere

Part of the reason is the regulatory environment. Lack of regulations and legal security is especially a concern for startups. They don’t have a strong lobby and no budgets for expensive legal battles with the government. Thus, many German blockchain firms have left, or have not even started in Germany. Instead, they have set up shop in Liechtenstein or Switzerland, which have proven to be way more accommodating.

Recently, the German government has sent more progressive messages, announcing a blockchain strategy by summer 2019. Berg says, “That’s an important signal. Germany has to become a pioneer of international blockchain development.”

True. But so far, it has been too little and too late. Firms that have gone won’t come back quickly. Nevertheless, developments are happening in Germany. It’s likely that most innovations will come out of Germany’s established powerhouses. Startups are seeking their fortune elsewhere.

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