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Well in my theory core reason is that Germany never developed a thriving startup IT economy[0] that was ever relevant for the GDP, especially not in comparison with the industrial sectors (cars, steel, chemistry) and so IT completely got ignored by politicians.
That resulted in no one who'd challenge the biggest gatekeepers Telekom and SAP, so they lobbied for and enforced whatever they wanted[1]. If you study CS in a German university you can easily get an MA without being able to write software at all (I personally happen to know several people). German universities teach what is easy to teach top down and test for: The textbook stuff that came out of the whole Java EE/OOP/SOAP/UML sector. You barely get practical coding lessons and can avoid them completely if you want. The academic sector never realized how crappy German software products are and never bothered looking at what Big Tech is doing. With given data protection and soon AI regulations, as a university you'd have a hard time collecting enough training data because your law department would step in referring to the current legal insecurity (I've heard stories from friends). Then we have this little crazy island Berlin which up until maybe 10ys ago was mainly driven by the infamous Rocket Internet "startup incubator" which is led by a couple of MBA sociopath billionaires, trying to copycat everything from SV and then sell it back to the SV company whenever they wanted to start conquering Europe. Thing is they never really developed enough SWE excellence to get the copycat successful in Germany or anywhere in Europe (with some exceptions). Third example? Here you are: Today I learned that the gov't already decided 20ys ago that they want to provide all usual governmental services online. 20ys later they (allegedly) poured 3.5Bn EUR into an unholy setup of consulting businesses, incompetent civil servants and a panel of software architect astronauts who could never really agree on things.
All their deliverables are click-dummies, gazillions of PDFs with SOAP/WSDL/OMG/UML thingies and prototype projects rolled out in "experimental" cities. So if you happen to live in Bremen you might be able to register your dog online but not in Berlin. Therefore in Berlin you might be able to get a license plate for your car online. Pretty much all governmental projects (Covid vaccination registration, special governmental aid for students because of high inflation, etc.) broke down because all their systems are incapable of handling more than maybe 10k visitors (in my theory it always breaks down whenever the biggest single Oracle DB host they could buy is going down). Germany has some decent software engineers, especially if they're self-trained and not brainwashed by one of the universities or big corps. But the environment manages to regularly piss them off and make em emigrate to somewhere else. Ouff, much text. Hope at least someone enjoys reading it. --- [0] This is because if you start a company in Germany you're faced with horrible bureaucracy wrt taxes, laws, politics, governmental authorities, etc. For example, you're forced to pay for a membership in a funny non-IT institution called "Industrie- und Handelskammer (IHK)" which essentially consists of a crowd of old men who are officially supposed to lobby for you and create a networking environment but if you ask them something like "hey, can you tell me how many companies are having problem XYZ right now?" they will tell you that they don't have any numbers and have no means to collect them. In 2023 they still send out a meaningless paper printed magazine. So not helpful at all but take a significant share of your gross turnover mainly to pay for their pensions.
Additionally, with all the regulations the governments set up over years they're now facing a significant cut in civil servants because Germany is getting older and older. As a result they're not having enough people to enforce or check regulations in time and never managed to develop any IT-based systems. Big problem with the influx of refugees in recent years and affects many other concerns as well.
Finally, there's this cultural difference to, e.g., the US that average Germans are not business-savy at all. If you tell the average German mom that you want to start a business, she will tell you that you're a dreamer and should get a proper job. Germans generally tend to think that companies are something god-given. [1] They are still the go-to businesses if the gov't quickly needs something, like the Covid tracing app which German tax payers AFAIR ended up paying 120M EUR for (lol). |
As for the old people running the IHK, from what I read, the membership is one-company-one-vote, so what stops people running for election?
As for the influx of refugees, that is a distinct advantage to Germany of an increased availability of workers, including many educated Syrians and others.
So it sounds like there's a problem with entrepreneurship in Germany outside the engineering / petro-chemical businesses. There's also a problem with your political choices due to the usual issues prevalent in every Western country. An aging population, the effects of the "financial industry" (a misnomer if ever there was one), the effects of climate change, etc.