Introduction

Artificial intelligence (AI) is a new digital frontier, and it represents uncharted territory that will be a profound driving force on the global economy, social affairs, and will transform the way we live and work. Over the past decade, AI has matured considerably and, as a fundamental innovation, is becoming the driver of digitalization and autonomous systems in all areas of life. As AI moves from the theoretical concept to the global marketplace, its growth is energized by a great quantity of digitized data and rapidly advancing computational processing power. AI can (1) improve weather forecasting, advanced manufacturing processes, speech recognition, industrial productivity, (2) improve and enhance cybersecurity defenses, (3) boost agricultural productivity, (4) enhance detection of cancer in the medical field, (5) predict an epidemic, and (6) help in development of autonomous vehicles and autonomous weapons systems. For these reasons Germany has initiated a holistic approach to their AI strategy within the European Union. Germany is already extremely well situated in many areas of AI. In the 2019 federal budget, the German Government Federation has taken the first step, allotting a total of €500 million to reinforce the AI strategy for 2019. In the following years, up to and including 2025, the German Government Federation intends to provide around €3 billion for the implementation of the strategy. This chapter seeks to discuss the framework for a holistic strategy and the policy for future development and application of AI in Germany. This chapter also shows that AI holds enormous potential and has a positive impact on German economy due to the technical capabilities of German companies, skilled workers, and a demand in the market for AI services.

Businesses and business processes are continuously evolving due to technological advancement. The need for competitive advantages in businesses has historically been the engine for development of advanced and cost-effective new mechanisms. In this effort, the third industrial revolution emerged in the IT environment, which in turn gave rise to widespread digitalization and moved to the fourth industrial revolution. In Germany, the term “Industry 4.0,” has been embraced by the German industry (Hannover fair 2011), which is one of the main indications of this new technological shift and is part of the High-Tech Strategy 2020.