Digitalization and the associated changes pose major challenges for the economy. One person who is intensively engaged with this topic is Professor Manfred Broy, founding president of the Center for Digitalization.BavariaWe spoke with him about the opportunities and challenges of digital transformation, the role startups play in this, and where he sees dangers lurking in the Munich ecosystem.
Mr. Broy, please introduce yourself again briefly!
I am the founding president of the Center for Digitalization in Bavaria. Before that, I was a professor of computer science in the field of software and systems engineering at the Technical University of Munich from 1989. I have always been concerned with issues of systems design, systems development, and software development, and in recent years, I have increasingly focused on the interrelationships between the ability to develop software and the strategic tasks of companies, particularly from the perspective of digital transformation.
Too little software affinity in medium-sized companies
How well is the Bavarian economy prepared for the challenges of digital transformation? Which challenges do you consider particularly urgent?
In recent years, the Bavarian economy has been grappling with the issue of digital transformation very intensively. A whole series of initiatives have emerged, and a strong movement is evident, even among companies that have already made significant progress in this area. I consider the fact that there is still a lack of software affinity, especially among small and medium-sized enterprises and the manufacturing sector, particularly critical. Companies here must quickly build up the relevant competencies, not only at the operational but also at the strategic level.
What will be the fundamental changes that digitalization will bring? Many employees feel a certain fear of digital transformation. Is this justified?
The changes brought about by digitalization are evident everywhere and dramatic. They affect individuals as well as companies, organizations, even the political system, society, and culture. It's only natural that people always perceive these changes with a certain amount of concern and feel a certain fear of digital transformation. But I believe there is no alternative. The only thing that helps is to engage intensively with these issues and, as far as possible, to confidently shape digital transformation and carefully consider where and how one wants to participate.
Established companies can benefit from startups
In your opinion, what role do startups play in digitalization and in our economy in general?
Startups play a special role in digitalization because the rapid pace of change often overwhelms established companies' ability to quickly expand into new business areas or technologies. Digital transformation is often very difficult and time-consuming, especially for large companies. Startups can embrace new topics very quickly; strictly speaking, they don't have to implement a digital transformation at all; they can instead launch into new areas from scratch. This is particularly important in Bavaria, as we still have a strong economy, and therefore the question of digital transformation and the role of startups in digital transformation is particularly important for established companies.
To what extent do you support startups and young founders?
We support startups and young founders in a variety of ways. This begins with facilitating certain programs, such as improving entrepreneurship education at universities; working closely with startup centers and accelerators; and, in particular, striving to improve communication and establish stronger contacts between startups and established companies.
Early customer interaction and flexibility are important
To be successful, a startup must…?
I believe what's crucial for a startup is a clear focus on the market. I've seen many startups that had a good idea in and of themselves but failed to tailor the idea precisely to the market's needs. So, it's important, especially at the beginning, to be flexible, willing to experiment, and to engage with your customers very quickly.
What is the biggest mistake a startup can make?
I think the biggest mistake a startup can make is not keeping a close eye on the market. Customer proximity and early interaction with customers and markets are crucial.
Munich must not miss the turnaround
The trend of the year is…!
I don't see a single trend for the year. There are a whole range of trends. Of course, artificial intelligence and machine learning, and the associated big data, are important topics at the moment. But that's been the case for the past few years as well. Blockchain is being discussed intensively, but it's not yet clear how significant it will become, and other trends, including those from recent years, are continuing, particularly the Internet of Things, but also certain applications like autonomous driving.
How do you feel about the Munich ecosystem and the local startup scene? What do you like about it, and where do you see room for improvement?
I believe that the Munich ecosystem has a lot of potential. However, there is still some room for development. Sometimes I get the impression that, especially in Munich, there is a certain degree of establishment and saturation. The economy is doing so well. Everything seems so successful that there is a risk of not recognizing the shifts and changes in trends in time. I would also like to see much stronger connections and interaction between the various players. Digitalization, in particular, is characterized by the fact that it transcends domain boundaries. And, as already mentioned at the beginning, the software orientation must gain much more traction.
Thank you for the interview!
