Congress Needs to Follow Germany’s Lead and Include a “Package for the Future” in Its Next Recovery Package

Robert D. Atkinson June 9, 2020
June 9, 2020

(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

As Congress considers a phase 4 stimulus package, it would be a mistake to focus only on short-term recovery measures, as important as they are. Lawmakers should follow what a number of other nations are doing by ensuring that any further recovery packages include investments for the future, particularly to support technology.

A case in point is Germany, whose governing coalition announced a €130 billion stimulus package, with a €50 billion “Zukunftspaket” [package for the future]. As a share of GDP, this would be equivalent to a U.S. investment of $330 billion.

This package for the future provides key public funding for critical next-generation technologies.

It devotes €5 billion to help wireless carriers deploy 5G networks to higher-cost, mostly rural areas where deployment is not economical for providers. It also devotes funding for wireline broadband expansion in high-cost areas.

Interestingly, in an effort to deny Huawei the German and European markets, it invests €2 billion to support companies developing software-controlled network technologies and supports rapid development and implementation of open standards (OpenRAN).

It proposes funding for the development of advanced technologies that the Chinese government is investing in massively, including quantum computing, particularly focused on real-time AI applications.

It is also providing funding for accelerating digital transformation of key public institutions. It proposed providing €3 billion in funding for the digital modernization of German government agencies at the federal, lander (state), and local levels. But the funding would rightly be contingent on all governments developing a common digital architecture concept to share, something also needed here in the United States.

The package proposes allocating €500 million to Smart City projects. And related to the pandemic, it wants to invest €3 billion for a “Future Program for Hospitals,” which is intended to improve the digital infrastructure of homes and to invest in communication, telemedicine, robotics, high-tech medicine, and IT and cybersecurity.

It also proposes €2 billion in the package for schools, including for computer hardware and equipment, and for training teachers.

Notably, the proposal also wants to expand tax depreciation for companies investing in digital technologies and equipment.

If there is one problematic component of the package, it is a provision to support the “establishment of a sovereign infrastructure,” a code word for pushing American technology out of Germany. It proposes funding the so-called Gaia-X project, a mercantilist attempt for Europe to establish its own cloud computing companies, even though American companies are the most innovative in the world and provide these services in Europe.

The rest of the package, though—supporting broadband deployment, digitalization of key public sector industries like education and health, and investing in next-generation technologies to counter China—is all welcome and should serve as a model for Congress.