New York Times Online, Bonn Journal, 20.08.1999

Ex-World Capital Has Its Eye on a Virtual Future
BONN -- »We are going to start by demolishing the British Embassy,« said Ulrich Lissek, pointing to a squat building opposite his office. »Then we're going to take over the headquarters of the Christian Democratic Party over there. And that will be just the start of our radical project.«

Lissek may sound like a holdover from some 1960's revolutionary movement, but he is in fact the chief spokesman for Deutsche Telekom, the now privatized German telecommunications company that is in the vanguard of an unlikely plan to transform Bonn's culture from bureaucratic stodginess to Silicon-Valley sprightliness.

As the German Government departs for Berlin this month after a 50-year sojourn on the Rhine, »Boomtown Bonn« sounds like an unlikely slogan. But it is the one making the rounds here as Telekom and its various subsidiaries buy up great swaths of real estate, computer company start-ups multiply, and an Internet banking group thrives.

Contrary to all predictions on »Black Thursday« -- the day in June 1991 when Parliament voted to move the German capital back to Berlin -- Bonn is prospering. Unemployment in the region is 7 percent, far lower than the 16 percent in Berlin, real estate prices are rising, and only 1.5 percent of office space is vacant, compared with more than 10 percent in the new capital.

»The period of angst is over,« said Barbel Dieckmann, the Mayor. »We were a successful capital and we would have liked to remain the capital, but now we feel Berlin has many reasons to envy us.«

Bonn, a city of 330,000 people, is still a genteel place where the whiff of capitalist enterprise is scarcely overwhelming. But the city's attempted makeover appears genuine and has wide implications for Germany.

The country is trying to make a painful shift from a highly regulated society where the state accounts for close to 50 percent of economic activity to a nimbler, more entrepreneurial system better able to create jobs.

Bonn's ability to shift from ponderous, state-heavy predictability to a place on Germany's telecommunications and information-technology frontier may provide a measure of how far a culture that is still generally risk-averse may be altered.

With over four million Germans jobless, over 10 percent of the workforce, Chancellor Gerhard Schröder believes it's time for a Germany burdened by by a graying population and soaring youth unemployment to rethink itself.

»Enough of the nanny state,« Economics Minister Werner Müller said last month.

Lissek of Telekom agrees.

»We want to engineer a vast shift from the functionary's culture, which does not prize the client, to being the most customer-friendly company in the world,« he said. »There is a culture of envy here that makes wealth somehow shameful. We want to make wealth respectable.«

These aims are evident in the vast modern atrium of Telekom's new Bonn headquarters, where the price of the company's stock in Frankfurt, New York and Tokyo flashes on one side and an »Online Screen« offers travel and shopping services on the other. For what was until 1993 a staid state-owned corporation, this is a revolution indeed.

Across the road, on land where the British Embassy now stands, Telekom is planning a $550 million building for about 5,000 employees. Its mobile-phone unit has bought up an old cement factory on the banks of the Rhine and is planning another huge development there.

In the wake of the giant, hundreds of small Bonn computer companies are springing up, full of Germans talking a remarkably glib line in »interfacing,« »stock options,« »the TeleBonn concept« and »Silicon Valley type models.« A new Bonn-based online banking service, Bank 24, hired over 1,000 people last year.

Dressed in a three-piece suit, Stefan Huthmacher, the chief executive of a software and consultant company called Comma Soft, scarcely looks like a denizen of Palo Alto. But as he shows a visitor the »Japanese meditation room,« complete with screens and prints, where employees are encouraged to seek inspiration, he explains that the West Coast has been a model to him.

»We have to develop the garage start-up mentality among students in Germany,« he said. »One of our problems is that we persisted too long with classical heavy industries, and did not adapt our education system fast enough to new technologies.«

To illustrate his point, Huthmacher, a 44-year-old former university physicist, said that his company had possible openings for 100 people, but cannot find qualified people to fill the jobs.

»It's a huge problem to find people,« he said, »because German universities still fail to teach the right disciplines. We sell knowledge. In an industrial area like the Ruhr, that is still a hard concept to accept.«

The company, which develops networking systems for large companies or public entities based on Microsoft-Software, already has 125 employees and is planning to go public soon.

It recently applied for permission to put up a building -- a process that can take years in Germany -- and saw in the city administration's acceptance within weeks a sign that Bonn is really changing.

»We are going to re-educate our population to look forward,« said Michael Swoboda, the president of the Bonn Chamber of Commerce. »We believe at least 250,000 jobs will be created in telecommunications and information technology in Germany in the next five years, and we plan to get a big chunk of them.«

Daniel Riek, 25, has already created 16 jobs in two years at his start-up company ID-PRO, a software consultant firm. A former student of Bonn University, he illustrates the crossover from university to technology and business that the city now hopes to nurture.

Of about $1.5 billion that Bonn received as compensation for the move of the capital to Berlin, the largest part has been spent on a new science and telecommunications research center called Caesar.

»Germany's problems are simple,« Riek said. »We suffer from what I call a 'digital gap,' and we don't understand service. Teachers in general know little about computing, and business-client relationships are about confrontation rather than cooperation. My hope is that Bonn can offer some new models.«

Ms. Dieckmann, the Mayor, said she was confident of the city's success. But in good German fashion Bonn is also hedging its bets. Various United Nations agencies have been lured to the town. Six ministries are remaining. One or two federal authorities -- including the Anti-Trust Commission -- are actually moving from Berlin to Bonn to provide a counterweight to the departure of over 15,000 civil servants.

»We even hope some spies will remain,« she said. »After all, we are going to be a telecommunications capital, and I've been told that industrial espionage is very much the wave of the future.«

(Roger Cohen)