The government is pushing companies to make digitization a core part of their strategy under its initiative dubbed "Industrie 4.0" and wants to improve digital education and training.

Speaking at an information technology conference, Merkel said teachers may find themselves in the uncomfortable position that their students know just as much or perhaps even more than they do when it comes to digital processes.

She added that she had already experienced this social phenomenon during German unification when many young teachers came to retrain east Germans with new skills.

"This is not easy because we are all raised to think the older we become the wiser we become, and that we naturally climb up the hierarchy, and not that we find out at the end of our careers what we don't know," Merkel said.

Merkel said Germany had a "good starting point" but was still far from being world leader when it came to digitization.