German IT is not short of talent; it is short of decision-makers who understand what they control. Japan shows what happens when a country's resources sit with people who can no longer put them to work. Germany is running the same experiment with something just as valuable: authority over technology.

In Japan, the frozen asset is money. Bloomberg reports that seniors with cognitive decline control about ¥315 trillion, close to half of GDP, and much of it simply sits idle. In Germany, the frozen asset is decision-making. Budgets, hiring and architecture are controlled by a management layer formed in the fax era, and the engineers who could use that authority productively rarely get it.

The comparison is about how institutions allocate control, not about age. Plenty of older leaders are excellent technologists. The problem is a system in which seniority, not competence, decides who steers technical work.

The Japanese lesson: controlled but not used

Japan's "dementia money" problem is a story about capital that is owned but cannot move. In 2018, Bloomberg put assets held by people with dementia at ¥143 trillion, more than a quarter of the economy. Its January 2026 follow-up puts liquid assets controlled by seniors with cognitive decline at about ¥315 trillion ($2 trillion).

The damage comes in three forms:

- Idleness. Banks freeze accounts to protect vulnerable customers, so money leaves circulation in an economy that badly needs spending and investment.

- Mismanagement and fraud. Owners who can no longer judge risk are easy targets, and nobody else is authorised to act for them.

- No succession. Few people hand over control while they are still able to, so the transfer happens too late or not at all.

The core insight is simple: an economy suffers when control and capability separate. The resource exists, but the person holding it cannot use it, and the people who could are locked out.

Germany's version: frozen decision-making

Germany's frozen asset is the authority to decide how technology is built, bought and staffed. Red Robot's August 2026 analysis argues that the country's IT problem is not a talent shortage but a competence-allocation problem: people who understand systems lack authority, and people with authority need not understand systems.

The results show in the rankings. In the Bitkom DESI 2026, compiled by Germany's own tech association, Germany placed 17th of 27 EU countries with 51.1 points, against Denmark's 76.4. It was 13th in 2022 and 14th in 2025. Its score rose slightly while its peers rose faster.

This is where the "fax-era manager" comes in. The term describes a mindset, not a birth year: someone whose model of good management was formed when paper, approval chains and long planning cycles were the safest way to run an organisation. That model works for building machines that must not fail. It breaks down in software, where speed, iteration and reversible mistakes win.

The symptoms: the same three failures

Each failure Japan shows with frozen money has a German twin in frozen management.

FailureJapan: frozen capitalGermany: frozen decisionsIdlenessAccounts locked, money out of circulationAbout 109,000 IT jobs unfilled; roles take nearly 8 months to fill; 61% of firms say candidates' pay demands don't fit their existing salary structureMismanagementOwners can't judge risk, so others exploit themThe Bundeswehr's D-LBO radio programme (about €20 billion) failed field tests; the fix was about €156.7 million for outside consultantsNo successionControl isn't handed over in timeOver 11,000 municipalities buy IT on their own; no shared standards, so the "One for All" reuse principle keeps failing

The consultant reflex deserves a closer look. A manager who cannot judge technical work can still buy a big-name consultancy. That turns personal career risk into a budget line, and it keeps decisions away from the engineers who could have made them.

The same pattern shows in cloud strategy. Red Robot cites surveys in which 82% of German firms want to end dependence on US cloud providers, while 78% remain dependent. Wanting change without delegating the authority to deliver it is exactly what a frozen asset looks like.

Who pays: the business-minded engineer

The biggest loser is the engineer who understands both the technology and the business case. In a healthy system, this person rises to own budgets, products and architecture. In a fax-era system, there is no clear path from building things to deciding things.

The raw material is strong. Germany's dual vocational track fills about 44% of IT roles and is among the best in the world. The engineers who finish an Informatik degree, despite a dropout rate above 50%, are well trained. What happens next is the problem:

- Pay grids cap them. Firms would rather leave a seat empty than pay market rates and disturb existing salary bands.

- Approval chains slow them. Decisions climb several levels because nobody at the bottom is allowed to be wrong.

- Capital starves them. Measured against GDP, the US deploys nearly six times as much venture capital as Germany. In one 2026 quarter, Germany closed a single confirmed deal above €100 million.

The result mirrors Japan's frozen accounts. The capability exists, but it cannot reach the resources it needs. So it leaves for another country, sits in a consultancy, or never starts the company it could have built.

Unfreezing the asset

Japan's answer to frozen money is planned succession: hand over control while the owner can still choose who gets it. Germany needs the same thing for decision rights in technology.

- Put technical authority inside the buyer. No large IT programme without an accountable, technically literate owner on the payroll, not only on a consultancy contract.

- Build a path from engineer to owner. Promote people who ship working systems into budget and product roles, instead of routing every decision upward.

- Pay the market, not the grid. A salary structure that leaves seats empty for eight months is costing more than it saves.

- Standardise interfaces, not purchases. Mandate shared APIs and data formats across the 11,000 municipalities, and let each buy freely behind them.

- Reward reversible mistakes. Judge managers on what they ship, so that shipping something imperfect beats shipping nothing for three years.

None of these steps requires better engineers. All of them require the current decision-makers to hand over some control.

Where the argument has limits

The thesis is strong but not the whole story, and a fair reader should weigh the counterpoints.

- The analogy is a metaphor. Japan's problem involves real cognitive illness; Germany's managers are not impaired. The shared pattern is control separated from capability, nothing more.

- Age is not the variable. Many senior leaders run excellent technical organisations, and many young managers adopt the same risk-averse habits. Incentives and structure matter more than birth year.

- German caution works in places. Deep tech, defence and Mittelstand engineering are doing well. Red Robot notes 2026 rounds such as Stark (€500 million) and Isar Aerospace (€270 million). Where the product is physical and errors are costly, thoroughness pays.

- Structure, not just people. Federalism, data-protection law and a small venture-capital market would slow any management generation. Replacing managers without fixing these would change less than hoped.

The defensible claim is therefore narrower than "old managers are the problem": Germany's software sector is held back by a management culture, rooted in the fax era, that keeps authority away from the people best equipped to use it.

Sources

- Bloomberg, Japan's 'Dementia Money' Is a Warning to the World (January 2, 2026, paywalled)

- Bloomberg, Dementia Sufferers Sit Atop a Mountain of Frozen Assets in Japan (October 16, 2018, paywalled)

- Metropolis Japan, Japan's Captive Capital: Trillions Locked Up In "Dementia Money"

- The Red Robot, Germany's IT Industry Is Not Short of Engineers. It Is Short of Judgement. (August 17, 2026)

- Hans-Werner Sinn, Ifo Viewpoint No. 159: German Gerontocracy (June 2014) https://redrobot.online/2026/10/06/the-fax-era-ceiling-how-old-school-management-holds-back-german-it/