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Monitoring Report DIGITAL Economy 2015

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Publisher Federal Ministry for Economic Affairs and Energy (BMWi) Public RelationsD-11019 Berlin, Germanywww.bmwi.de

Text and editingTNS Infratest Business Intelligence Overall Responsibility: Dr Sabine Graumann, Prof Dr Irene Bertschek Project Management: Tobias Weber With the collaboration of Anselm Speich, Dr Jörg Ohnemus, Dr Christian Rammer, Thomas Niebel, Patrick Schulte, Michael Weinzierl, Victoria Winkler, Benedikt Zieger, Rebecca Armbruster

Design and production Kathleen Susan Hiller, viaduct b., PRpetuum GmbH (cover)

StatusOctober 2015

Illustrations Malte Knaack

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Contents

Site

Welcome 5

Management Summary 6

Digital Economy: Key figures and international comparison 14

The added value of the Digital Economy in Germany 16

Start-ups and innovations within the ICT sector 18

Global DIGITAL Performance Index 20

– Market 22

– Infrastructure 24

– Usage 26

Location factors, growth areas and top players 28

The digitalisation of the German economy 30

DIGITAL Economy Index 32

Business successes in digital markets 36

Orientation of businesses towards digitalisation 38

Use of digital devices, infrastructures and services 40

Critical success factors for digitalisation 42

Make or buy – competitiveness or technical dependency? 44

Expert workshop 46

Methodology 48

Contact 50

Contents

Digitalisation is a process of transformation which ischanging everyday’s life, society and economic activi-ties in a variety of ways. New business models areemerging, work is changing, processes and organiza-tional forms are being redefined. Internet platforms arebecoming competitors and rivals. Given the importanceof digitalisation, Germany must remain at the forefrontof developments. Germany as a business location canonly remain successful if the traditional sectors of theeconomy and above all German medium-sized compa-nies rise to the challenges of digitalisation. This meansnot only reacting to new developments but also seizingthe opportunities to play a leading role in shaping thedigital future.

For the first time ever in the Monitoring Report DIGI-TAL Economy, we have analysed the level of digitalisa-tion in the German economy, split by sectors. On thebasis of the current degree of digital business reached,we have then identified key areas for action. 49 indexpoints out of 100 in the DIGITAL Economy Index meansthat we are still a long way off having a fully digitalisedGerman economy. In the next five years, the DIGITALEconomy Index score will rise to 56 points. This un-derlines that we need to significantly increase the pacewhen it comes to the digitalisation of the Germaneconomy.

In this study, we have also examined the Digital Econ-omy in Germany and Germany’s performance as com-pared to nine other countries. We need a strong DigitalEconomy in Germany which develops and providestailor-made business solutions, services and technolo-gies.

Sixth place for the Digital Economy in Germany is notgood enough. We must take advantage of the opportu-nities offered by digitalisation to ensuring our competi-tiveness and high-quality, professional work. We mustensure a high level of data protection and a reliable con-sumer protection. Digital transformation, digital inno-vation and digital supremacy are the cornerstones ofsustainable digitalisation.

The extent to which Germany can benefit from the op-portunities offered by digitalisation also depend on howwe embed digitalisation across society and encouragepeople to actively shape our changing working andliving environments. We need lots of dedicated peoplewho exchange ideas openly and creatively on all levels.

I would like to thank all of the experts who contributedto this successful monitoring study by taking part inworkshops, surveys and discussions. I look forward toworking with everyone involved from politics, industry,science and society – whether it be during the IT Sum-mit or as part of the “Monitoring Report DIGITALEconomy” project.

Welcome 5

Welcome

Matthias Machnig,

State Secretary at the Federal Ministry for

Economic Affairs and Energy

Summary of results

6th place in the Global DIGITAL Performance Index

DIGITAL Economy Index

49points in the

of companies generate > 60 % of their

turnover digitally27%

very happy with their

current level of digitalisation

37%

generated by the Digital Economy€ 221 billion turnover

5th place for ICT turnover

Summary of results 7

With a score of 53 points out of 100, the German DigitalEconomy, i. e. the information and communicationstechnology (ICT) sector as well as the Internet economy,is in sixth place in the Global DIGITAL PerformanceIndex 2015 which compares ten countries around theworld. The average performance of the German DigitalEconomy is primarily down due to its below-averageimportance on the world markets (sixth place) and thecountry’s slow pace of digitalisation. Another reason isthat the usage of digital products and services by thepopulation, companies and governmental bodies is nomore than average around the world (fifth place). Interms of technological and infrastructural frameworkconditions, the performance of the German DigitalEconomy is comparatively good (fourth place).

With a turnover of € 221 billion, the German ICT sectoris the fifth-largest market after the USA, China, Japanand Great Britain. Accounting for 4.6 percent of com-mercial value creation in 2014, it ranks above the tra-ditional German mechanical engineering sector andjust behind the automotive engineering sector. Its grossvalue creation amounts to € 93 billion. The turnover ofthe German Internet economy continues to grow andhas now reached € 100 billion. With a per capita turn-over of € 1,266, the German Internet economy ranksfifth compared to 9 leading countries around the world.

The outstanding competitive advantages of the DigitalEconomy in Germany lie in its innovation, marketaccess and the intensive cooperation between the ICTsector and other areas of the economy. Its three mainweaknesses are the lack of skilled professionals, thenetwork infrastructure and weaknesses in ICT exportsaccounting for a small proportion of overall Germanexports. By 2020, the strengths should be developedfurther by focusing on three growth areas, namely ITsecurity, mobile computing and transaction services.The second priority is to encourage other promisingareas such as cloud services, big data, Industry 4.0, socialcollaboration, and smart services.

The digitalisation of the commercial economy has notprogressed very far. In the DIGITAL Economy Index2015, Germany scored 49 points out of 100 for its levelof digitalisation. The index measures the degree of digi-talisation in business processes, internal company pro-cesses and the level of use of new digital technologiesand services. The pace of digitalisation is modest but isexpected to reach 56 index points by 2020.

With 51 index points in 2015, service companies aremuch more digitalised than the processing industrywith just 37 index points. By 2020, the level of digitalisa-tion in the processing industry is expected to increasesignificantly – by 13 points to 50 points. In the sameperiod, the level of digitalisation in the service sector isset to increase moderately – by six points to 57 points.Digitalisation projects need to be carried out morequickly.

The highly digitalised ICT sector remains a pioneer inthe digital transformation. Knowledge-intensive serviceproviders as well as the finance and insurance industryare also digitalised to an above-average level. The retailand energy industries show average levels of digitalisa-tion, while the level of digitalisation in transport andlogistics, mechanical engineering, other manufacturing,the automotive industry, health care and the chemi-cals / pharmaceuticals industry is below average.

Companies can significantly boost growth in the digitalmarkets, by increasing the efficiency of internal pro-cesses, working procedures and resources, improvinginnovation and implementing new business modelsthrough digitalisation. Digitalisation should be a matterfor CEOs, not the IT department. The digital know-howof employees has a significant leverage effect on digi-talisation. At the same time, a fully digitalised valuechain has a considerable influence over fostering digi-talisation. However, such a chain is rarely found becausedigital sales channels are not available and the linkagebetween market players need to be improved.

Almost half of companies in the German economy seekhelp from external service providers for their ICT-sup-ported working procedures and processes, while twothirds obtain digital components for their products orservices from external suppliers. However, 78 percentare of the opinion that outsourcing IT services leads toan increasing technical dependency on external pro-viders.

According to companies in the commercial sector, po-liticians must take steps to improve IT security, en-courage the development of broadband penetrationand increase the pool of skilled personnel. The industrywould also like to see state subsidies for digitalisation. Itis also calling for the same conditions on the digitalmarkets for all market players.

Management Summary

8 Summary of results

In the medium and long term, digital progress is a keydriver for sustained growth and for our prosperity.However, it is difficult to translate the digital transfor-mation into specific steps from a conceptional, strategicand political point of view. This is where the MonitoringReport DIGITAL Economy 2015 from TNS Infratest andthe Centre for European Economic Research (ZEW),Mannheim comes in.

We measure the added value that the Digital Economy,i. e. the ICT sector and the Internet economy, generatesfor the German economy as whole. On the basis of sec-ondary analysis and an international expert survey, wedetermine how the German Digital Economy is per-forming compared to that of other nine countries. Wedetect the particular strengths and weaknesses of theGerman Digital Economy.

The Digital Economy paves the way for the digitalisa-tion of the entire economy. On the basis of a representa-tive survey of German companies, we measure how fardigital penetration has progressed in different sectors.We identify and assess the critical success factors whichinfluence digitalisation. We also analyse future develop-ments until 2020. The Monitoring Report DIGITALEconomy screens whether digital companies are depen-dent on external partners or not. Finally, we identify themost important opportunities and challenges when itcomes to foster digitalisation. All results have been dis-cussed during an expert workshop.

I The economic importance of the Digital Economy

In 2014, gross value creation within the ICT sector roseagain compared to the previous year, reaching almost€ 93 billion. As a result, the ICT sector contributes 4.6percent of commercial value creation. This puts the sec-tor ahead of mechanical engineering and closely behindthe automotive industry. With a significant increase ofaround 12 percent compared to the previous year, theICT sector invested a total of € 15.8 billion in 2014. It ac-counts for 3.2 percent of all investment activity withinthe commercial sector in Germany. In 2014, the ICT sec-tor generated a turnover of over € 221 billion. The sectorhas therefore recovered from the unexpected slump inthe previous year. The key driver is the ICT hardware

sector growing by € 6 billion. In 2014, a total of 1,057,213people worked in the ICT sector. This represents a 2.4percent increase in the number of employees comparedto the previous year and corresponds to 4.3 percent ofall people employed in the commercial sector.

In Germany in 2014, a per capita turnover of € 1,266 wasgenerated with internet-based goods and services. Thismeans that Germany is in fifth place behind South Ko-rea, Great Britain, the USA and Finland. The German In-ternet economy generates a total turnover of just under€ 100 billion.

II The performance of the German Digital Economy ininternational comparison

German Digital Economy in sixth place in the ten-nationranking. In the Global DIGITAL Performance Index Ger-many is in an average sixth place, with 53 index pointsout of 100.

▶ German Digital Economy drops to sixth place afterbeing overtaken by China. Following an increase of fourindex points compared to the previous year, Germanymanaged to pass the 50-point mark but fell back intosixth place owing to China’s digital progress. China’sGlobal DIGITAL Performance Index improves by sevento 55 index points. As a result, China has jumped fromseventh to fourth place, overtaking Germany, and isnow in joint fourth place with Japan.

▶ USA, South Korea and Great Britain remain at thetop. With 80 index points, the USA is the clear leader,well ahead of South Korea with 66 points and GreatBritain with 57 points.

▶ These four countries are closely followed byGermany and Finland. No changes in position for thecountries at the bottom of the list. Finland is in seventhplace, improving two points to reach 52 index points.This means a drop of two places because China andGermany have moved ahead of Finland. As in theprevious year, the last places were taken by France with48 points, Spain with 41 points and India with 31 points.

Digital Economy – Enabler of digitalisation Summary of results


Market, infrastructure, usage: the three cornerstones ofthe Digital Economy. The progress made by the DigitalEconomy is measured in three pillars: the position onthe world markets, infrastructural framework condi-tions and the use of digital technologies and services.The main results for these key areas are as follows:

▶ German Digital Economy with below-average per-formance on the world markets – sixth place. Key marketfactors here are turnover, demand and exports on worldmarkets. With 36 index points, Germany finished insixth place in the “Global DIGITAL Performance Index– Market”. The USA was the clear leader with 78 points,followed by South Korea with 56 points, China with 51points, Japan with 42 points and Great Britain with 40points.

The “Global DIGITAL Performance Index – Market”clearly shows the extent to which the USA dominatesthe world markets of the Digital Economy. It showswhere Germany most urgently needs to catch up: theproportion of ICT exports (last place), TC expenditure asa share of GDP (eighth place), the ICT sector’s grossvalue creation and spendings on online content(seventh place in each case). It is not possible to identifya particular strength in the market performance. Afterall, Germany does not finish higher than fifth place inthe digital market ranking for any of the indicators.

▶ Above-average performance for basic frameworkconditions – fourth place. When it comes to the basictechnological, legal and infrastructural framework con-ditions, Germany scored 79 index points, placing it infourth place. South Korea was in first place with 82points, ahead of France and Great Britain in joint se-cond place, each with 81 points. Finland and Germany

were in joint fourth place. In the “Global DIGITAL Per-formance Index – Infrastructure”, the USA was in sixthplace with 77 points, followed by Japan with 74 points,Spain with 66 points, China with 50 points and Indiawith 27 points.

The German Digital Economy has a great deal of catch-ing up to do when it comes to the use of new technolo-gies such as smartphones (seventh place) and tablets(eighth place). The most obvious weakness is the lack ofsuitable ICT skilled personnel (last place). The most ob-vious strength of the German Digital Economy is itsinnovation. Out of all 48 factors analysed, this is thesingle one where Germany is the leader. The “linkagesbetween the ICT sector and other sectors” can be re-garded as a particular strength of the German DigitalEconomy (third place).

▶ Average performance for the use of digital tech-nologies, products and services – fifth place. In the lastchapter, the willingness of citizens, companies and pub-lic governmental bodies to use new technologies andservices is measured. With 76 index points, Germany isin fifth place. The USA is the leader with 88 points,ahead of Great Britain with 85 points, South Korea with80 points and Finland with 77 points. Japan with 74points, France and Spain with 72 points each, Chinawith 70 points and India with 57 points are at the bot-tom of the ranking.

The German Digital Economy needs to catch up when itcomes to mobile Internet use, the use of social net-works, e-learning services and e-government services(eight place for all indicators mentioned). Germany’sbest position was reached for the number of musicdownloads (third place).


The strengths and weaknesses of Germany’s digital eco-nomy. In an international survey of highly qualified ICTexperts from the ten countries, these results werelooked at in more detail.

The strengths of the digital Germany economy are asfollows:

1. By far the most obvious strength is its innovation.Germany is followed by Finland and Spain.

2. Market access, i. e. the ability to sell products andservices nationally and internationally, is regarded as aparticular advantage of Germany. India ranks evenhigher. Japan and the USA are virtually level with Ger-many.

3. Germany ranks third when it comes to the linkagesbetween the ICT sector and traditional sectors of theeconomy. Only Finland and Japan do better than Ger-many here.

4. The basic technological, legal and infrastructuralframework conditions are a clear competitive advan-tage for Germany. However, Finland and Great Britainare well ahead of Germany. The basic legal conditions inSpain and Japan are as good as those in Germany.

5. Moderate advantages of the German Digital Eco-nomy are “time to market”, i. e. the time needed to getideas onto the market (South Korea leads here ahead ofthe USA and Spain), the development of new fields ofbusiness (Great Britain and China are the leading loca-tions here) and the basic framework conditions forinvestments (China, South Korea, Great Britain andIndia do particularly well here).

The weaknesses of the German digital economy are asfollows:

1. By far the most obvious weakness is its lack of spe-cialist professionals. The situation is equally severe inChina and the USA. Finland does best in this area.

2. Network infrastructure is a particular weakness ofthe German Digital Economy. Great Britain and, to alesser extent, Spain, India and the USA are in a similarposition. Regarding network infrastructure, Japan per-forms best.

3. Those surveyed were critical of Germans ability toinfluence relevant developments on the global markets.The same applies to Finland and France. India is theleader in market power, ahead of China.

4. Germany is weak in respect to growth in the ICTsector (the top countries are China, the USA and GreatBritain), the level of demand (the top ranking locationsare China, India, the USA and Spain) and growth in thenumber of start-ups (top ranking nations are China andFinland).

Building on strengths and reducing weaknesses. Accord-ing to German experts, top growth areas until 2020 are:IT security with 63 percent, mobile computing with 54percent and transaction services on the Internet with 52percent. Promising emerging areas with between 40 and50 percent of the votes are: cloud services and big data,each with 50 percent, Industry 4.0 with 44 percent, so-cial collaboration with 42 percent and smart serviceswith 40 percent. “Hidden champions” with less than 40percent of the votes are embedded systems with 39 per-cent, 3D printing with 37 percent and e-health / tele-medicine with 35 percent.


III The level of digitalisation of the German economy in2015 and 2020

Digitalisation not yet advanced. In the “DIGITAL Eco-nomy Index”, the index for digital readiness of the eco-nomy, Germany scored 49 index points out of 100 in2015. This means that digitalisation is not yet advancedin Germany. According to the companies surveyed, Ger-many should score 56 points in five years’ time.

The level of digitalisation is increasing, albeit slowly.With just 37 index points, the processing industry is un-derdeveloped from a digital point of view. However, itslevel of digitalisation will increase significantly to 50points by 2020. In 2015, the service sector will score 51points. This means that it is much more digitalised thanthe processing industry. By 2020, its level of digitalisa-tion will improve to 57 points.

In most of the industry sectors observed, digitalisation isnot really getting up to speed. The sectors observeddiffer considerably in terms of their levels of digitalisa-tion and the pace of digitalisation:

▶ The ICT sector is the single sector of the economywith a level of digitalisation which is well above average.It remains a pioneer when it comes to the digital trans-formation (2015: 66 points, 2020: 71 points). This meansthat business procedures, internal company processesand the level of use of digital technologies are well ad-vanced when compared to other sectors.

▶ Today, the knowledge-intensive service providersare digitalised to an above-average level and will remainso in the future (2015: 59 points, 2020: 62 points). Thesame applies to the finance and insurance service pro-viders (2015: 59 points, 2020: 62 points).

▶ Sectors with average levels of digitalisation are re-tail (2015: 50 points, 2020: 56 points) as well as the ener-gy and water supply industry (2015: 47 points, 2020: 56points).

Unlike in the sectors with comparatively high levels ofdigitalisation, there will be significant changes in thelevels of digitalisation in the sectors that are less digi-talised.

▶ Transport and logistics remain sectors with a be-low-average level of digitalisation (2015: 40 points, 2020:49 points). The same applies currently to mechanicalengineering (2015: 39 points). However, from 2020 on-wards (51 points) this sector will show average levels ofdigitalisation. The chemicals and pharmaceuticals in-dustry is a sector with a low level of digitalisation (2015:40 points).

▶ The level of digitalisation in the health care sectorremains very low (2015: 36 points, 2020: 44 points). Theautomotive industry with 37 points will improve in2020 to 48 points, showing an average level of digitalisa-tion. Other manufacturing with 36 points currentlyhave a level of digitalisation which is well below aver-age. In 2020, it will score 50 points and will move twocategories to an average level of digitalisation. In con-trast, the chemicals and pharmaceutical industry willonly score 46 points in 2020.

The speed of digitalisation needs to be increased. Thisstudy focuses on three pillars. Higher levels of digitali-sation and a faster pace of digitalisation can be achievedby:

1. Increasing the digitalisation of existing markets orby introducing new business models;

2. Adapting internal company processes, resourcesand infrastructures to digitalisation;

3. Making greater use of digital devices, services andinfrastructures.


Influence of digitalisation on business success. 80 per-cent of companies in the commercial sector regard di-gitalisation as “important”. 88 percent are already “sa-tisfied” with the level of digitalisation attained. How-ever, only 27 percent of products and services in thecommercial sector are generated on a predominantlydigital basis. In addition, only 25 percent of companiessurveyed believe that digitalisation currently plays ahighly significant role in their business success.

The index score for the overall digital business activityof companies in the commercial sector is 46 points. Theservice sector scored 48 points. This figure is muchhigher than in the processing industry reaching a scoreof just 35 points.

What can be done to increase the proportion of businessactivities carried out digitally by 2020? The “DigitalRoadmap” prioritizes success factors according to theirinfluence over digitalisation progress. As a matter ofpriority, companies in the commercial sector should:

1. Concentrate on increasing the efficiency of internalprocesses, working procedures and resources,2. Focus on improving their level of innovation bydigitalizing processes and applications.Other important factors are:3. Building on competitive advantages and4. Improving the quality of products and services bydigitalisation.

Digitalisation of internal processes. 34 percent of com-panies in the commercial sector have digitalised inter-nal processes or digital value chains by 60 percent ormore. Digitalisation is a central part of the companystrategy for 64 percent of companies. By 2020, thisfigure is expected to rise to 67 percent. By 2020, 37 per-cent of companies in the commercial sector will investmore than ten percent of their overall turnover in digi-talisation. In 2015, this figure was 25 percent, only. In2020, six percent of companies will not carry out any di-gitalisation projects (2015: ten percent). According toexperts interviewed, digitalisation should be a matterfor CEOs, not necessarily for the IT department. Theindex for internal digital company conditions reached37 points in 2015. While the service sector scored 38points, the processing industry reached just 29 indexpoints.

What can be done to improve basic conditions that en-courage digitalisation by 2020? Employees’ digitalknow-how is the critical success factor. The more ex-perienced employees are when it comes to digital issues,

the better the progress in digitalisation will be. A fully digitalised value creation chain has considerable influ-ence on internal company digitalisation processes.However, there is a lack of implementation becausedigital information and sales channels are not usedwidely, and the links between market players need to beimproved. Politicians could offer support here.

The use of digital devices and infrastructures for busi-ness purposes is growing. In contrast, the use of digitalservices is only just beginning. In 77 percent of compa-nies in the commercial sector, more than 75 percent ofpermanent employees use digital devices. In 69 percentof companies, 75 percent or more of the employees usedigital infrastructures. However, 49 percent of compa-nies in the commercial sector do not use any digitalservices. A score of 65 points was achieved in the digitalusage index in 2015. While the processing industryscored 48 points, the service sector reached 68 points.

What can be done to increase the use of digital devices,infrastructures and services by 2020? According to the“Digital Roadmap”, companies in the commercial sectorshould invest predominantly in developing their digitalinformation channels. This will change their futurerange of products and services and the way they dealwith changing customer demand. The usage of “digitalservices” which is below-average should be significantlyencouraged.

There is a great deal of catching up to do in all three keyareas. Companies in the commercial sector haveparticularly to catch up with their internal digitalcompany conditions.

IV Make or buy – competitiveness or technical depend-ency?

Almost half of companies in the German commercialsector seek help from external service providers fortheir ICT-supported working procedures and processes.Two thirds obtain digital components for their productsof services from external suppliers. The companies pre-dominantly use domestic service providers here.Around a third of companies regard paid Internet ser-vices such as online advertising or cloud services as im-portant for their business activities. However, 78 per-cent of companies are of the opinion that outsourcingIT services leads to an increasing technical dependencyon external providers. Indeed, 64 percent of companiesbelieve that data security could be jeopardised. How-ever, there are benefits – increased quality and a reduc-tion in the burden on resources.


V The challenges of digitalisation

Companies in the commercial sector see the followingas the main challenges for politicians:

1. IT security (92 percent)

2. Encouraging the development of broadband (90 percent)

3. Encouraging the training of specialist personnel (78 percent) and data protection (78 percent)

Other factors mentioned by fewer companies were statesubsidies (70 percent), the state funding of internalcompany digitalisation projects (54 percent) and thedevelopment of the digital EU domestic market (62percent).

Only 42 percent of the German IT professionals ques-tioned as part of the international ICT expert surveysaid that politics and private households are drivers ofdigitalisation. According to the experts, three groups inparticular are encouraging sector developments: globalplayers (67 percent), applications (66 percent) and re-search and development (62 percent).

The preliminary results of the Monitoring Report DIGI-TAL Economy were discussed with renowned repre-sentatives of industry in September 2015. Other keydemands levelled at politicians were the creation ofequal market conditions for all players and the supportof partnerships between top players.

VI Outlook

This DIGITAL Economy Report which TNS Infratestand the Centre for European Economic Research (ZEW)published in 2015 for the first time shows that the Digi-tal Economy and the digitalisation of the economy areclosely linked. Suitable promotion of the Digital Eco-nomy has positive effects on all sectors.

We identified specific starting points for encouragingdigital productivity, competitiveness and growth. In-dustry, science, research, politics and society must alltackle digital policy as a central, shared task.

On occasion of the National IT Summit on 18 / 19 No-vember 2015 in Berlin, digitalisation profiles for eachsector of the economy and a special assessment of me-dium-sized companies will be provided on the websitesof the Federal Ministry for Economic Affairs and Ener-gy, TNS Infratest and the ZEW will report on results indetail at monthly intervals.

We would like to thank all experts who took part inworkshops and all employees of German companieswho participated in our survey. If you would like to findout what progress your company has made on the pathto digitalisation, please let us know. You would be wel-come to take part in the survey next year and will re-ceive the digitalisation index of your company – calcu-lated by us for you on an exclusive basis.

We look forward to working with you in the future.

Tobias Weber,

Project leader,

Business Intelligence,

TNS Infratest

Dr Sabine Graumann,

Senior Director,

Business Intelligence,

TNS Infratest

Digital Economy: key figures andinternational comparison

companies in the ICT sectorover 92,000

6th place in the GlobalDIGITAL Performance Index

spent on € 15.1 billion

start-ups in the ICT sector6,700

security is top growth area in Germany up until 2020

63 %

Biggest strength of the German

ICT sector “Innovation”

innovations in the ICT sector

Digital Economy: key figures and international comparison 15

Added value of the Digital Economy – innovations – ICT start-ups

The Digital Economy, i. e. the ICT sector and the Inter-net economy, are central drivers paving the way for thedigital transformation. In the first part of this chapter,we analyse the contribution of the Digital Economy tothe commercial economy. In particular, we focus on theinnovation activities and start-ups that are driven bythe ICT sector.

With over 92,000 companies and more than a millionemployees, the ICT sector creates significant addedvalue for the German economy. Contributing 4.6 per-cent of commercial gross value creation, it is ahead ofmechanical engineering. With investments of € 15.8billion and a 3.2 percent share, it makes a significantcontribution towards the long-term growth of theGerman economy. In 2014, the per capita turnover ofthe Internet economywas € 1,266. This means thatGermany is in fifth place behind South Korea, GreatBritain, the USA and Finland.

In the German ICT sector, the innovation quota, i. e. theproportion of companies that have introduced at leastone new product or process within a three-year period,was 74 percent in 2013. In 2013, the ICT sector in Ger-many spent € 15.1 billion on innovations. This repre-sents an increase of 13 percent compared to the pre-vious year.

In 2014, the number of start-ups in the ICT sector inGermany remained almost constant. After four years ofdeclining start-up figures, the downward trend has thuscome to an end. Start-up figures in the ICT hardwaresector have risen for the second year in succession.

Global DIGITAL Performance Index: the performance ofthe German Digital Economy compared to that of othernations

In the second part of the study, we analyse the impor-tance of the German Digital Economy on the basis of aten-nation ranking. In the Global DIGITAL Performan-ce Index 2015, Germany is in sixth place with 53 points.With 80 index points, the USA remains the leader, aheadof South Korea and Great Britain. Given the significantprogress of the Chinese Digital Economy (55 points), ithas moved up from seventh to fourth place.

The measurement of the Digital Economy is based onthree pillars: the position on the markets, the infra-structural conditions and the level of use of digital tech-nologies and services. The development of the marketsdemonstrate the extent to which the USA dominates.While the USA scored 78 index points, Germanyachieved a score of just 36 points and, with its below-average performance, is in sixth place in the GlobalDIGITAL Performance Index – Market. In contrast, theGerman Digital Economy does well when it comes toinfrastructural and technological conditions. With 79index points here, it is in fourth place in the GlobalDIGITAL Performance Index – Infrastructure. The per-formance of the Global DIGITAL Performance Index –Usage is average. With 76 index points, Germany onlymanages fifth place.

The Global DIGITAL Performance Index 2015 was en-hanced by an international ICT expert survey carriedout by TNS Infratest. According to the survey, by far themost obvious strengths of the German digital economyare “innovation”, “market access” and the “existing linksbetween the ICT sector and other areas of the econo-my”. By far the biggest weaknesses are the “availabilityof specialist personnel”, the “telecommunications net-work infrastructure” and “ICT exports as a proportionof all German exports”. Germany is weak in influencingglobal digital world markets. Germany needs to con-centrate on the top three growth areas up until 2020: ITsecurity, mobile computing and transaction services.

Digital EconomySummary

The added value of the Digital Economy in Germany

in the ICT sector€93 billion gross value creation

employees in the ICT sector

over 1,050,000

turnover in theICT sector€221 billion

investments in the ICT sector€15.8 billion

companies in the ICT sectorover 92,000

generated by the Internet economyover €100 billion turnover

The added value of the Digital Economy in Germany 17

The digital economy, i. e. the ICT sector and the Interneteconomy, are central drivers for the digital transforma-tion.

ICT sector, automotive and mechanical engineeringshow same value creation

In 2014, gross value creation within the ICT sector roseagain compared to the previous year, reaching almost€ 93 billion. As a result, the ICT sector contributes 4.6percent of commercial value creation. The ICT sector isahead of mechanical engineering and just behind theautomotive industry.

ICT sector invests € 15.8 billion

With a significant increase of around 12 percent com-pared to the previous year, the ICT sector invested € 15.8 billion in 2014. This means that it accounts for 3.2 percent of all investment activity within the com-mercial sector in Germany. The ICT service providersaccount for 86 percent of all investments in the ICTsector – considerably more than the ICT hardwarecompanies.

ICT sector turnover benefits from upturn in hardware

In 2014, the ICT sector generated a turnover of over€ 221 billion. The sector has therefore recovered fromthe unexpected slump in the previous year, regainingalmost € 7 billion. With a turnover of more than € 132 billion and accounting for 2.2 percent of all com-mercial turnovers, the ICT service providers only man-aged to increase turnover by € 1.3 billion. In contrast,turnover in the hardware sector rose by € 6 billion, thusdriving turnover growth throughout the ICT sector in2014.

Service providers account for three quarters of jobs inthe ICT sector

In 2014, a total of 1,057,213 people worked in the ICTsector. This represents a 2.4 percent increase in thenumber of employees and corresponds to 4.3 percent ofall people employed in the commercial sector. In abso-lute terms, this means that the employment volume inthe ICT sector grew by over 24,000 jobs from 2013 to2014. When compared to other sectors, the ICT sector ispositioned between mechanical engineering and auto-motive engineering.

Turnover and employment levels expected to increasebetween now and 2017

74 percent of the experts surveyed by TNS Infratestbelieve that the German ICT revenues will increase until 2017, while 20 percent believe that they willstagnate. Only six percent expect turnover to fall. 59percent of the German experts predict that employ-ment in the ICT sector will increase until 2017, while 34 percent expect it to stagnate. Seven percent expectthe number of employees to fall.

German Internet economy turnover average comparedto other countries

In Germany in 2014, a per capita turnover of € 1,266 wasgenerated with internet-based goods and services. Thismeans that Germany is in fifth place behind South Ko-rea, Great Britain, the USA and Finland. The GermanInternet economy generates a total turnover of just over€100 billion. One reason for this increase compared tothe previous year is the improved foreign trade balance:the import surplus has fallen considerably since 2012.

The added value of the Digital Economy

Prof Dr Irene Bertschek,

Head of Research Department

Information and Communication Technologies,

ZEW Mannheim

Dr Jörg Ohnemus,

Deputy head of Research Department

Information and Communication Technologies,

ZEW Mannheim

Innovations and start-ups in the ICT sector

of turnover withnew products in the ICT sector

26.7%

of turnover withnew brands in the ICT sector

4.5%

innovation quota in the ICT sector74.2%

of all spendingson innovations

is within the ICT sector10.5%

start-up rate in the ICT sector6.9%

in the ICT sector€15.1 billion

spent on innovations

Innovations and start-ups in the ICT sector 19

Innovations and start-ups in the ICT sector

Three quarters of companies in the ICT sector areinnovators

In the German ICT sector, the innovation quota, i. e. theproportion of companies that have introduced at leastone new product or process within a three-year period,was 74 percent in 2013. When compared to other sec-tors, this is the second-highest figure. However, it is twopercentage points below the value for the previous year.This fall is in line with the overall trend throughout theeconomy. There was a significant decline in the innova-tion quota in the ICT hardware sector (from 80 to 68percent), while the figure for the ICT service providersfell only slightly (from 76 to 75 percent). Nevertheless,the level of innovation among ICT companies remainsvery high compared to other sectors. Among compara-ble sectors, only the chemicals and pharmaceuticalsindustry has a slightly higher value with 76 percent.

Around € 15 billion spent on innovations in the ICTsector

In 2013, the ICT sector in Germany spent € 15.1 billionon innovations. This represents an increase of 13 per-cent. In 2013, the ICT sector accounted for 10.5 of allspending on innovations throughout the German eco-nomy. ICT service providers account for the largest partof the innovation budget (€ 11.55 billion). With a 15 per-cent rise in expenditure, they increased their spendingon innovations disproportionately.

Compared to other sectors, the ICT hardware sectoraccounts for a large proportion of spending on researchand development (R & D) in relation to overall spendingon innovations (2013: 66 percent). Among comparablesectors, only the chemicals and pharmaceuticals indus-

try accounts for a larger proportion of spending (69 per-cent). The figure for mechanical engineering and auto-motive engineering is slightly below that for ICT hard-ware. Among ICT service providers, the proportion ofspending on R & D in relation to overall spendings oninnovation is 45 percent. This is a fairly low figure whichlies below the knowledge-intensive service providers(51 percent). In the ICT sector as a whole, research anddevelopment accounted for exactly half of spending oninnovations in 2013.

Start-up level in the ICT sector continues to fall

In 2014, the number of start-ups in the ICT sector inGermany remained almost constant. After four years ofdeclining start-up numbers, the downward trend hasthus come to an end. Particularly start-ups in the ICThardware sector continued to rise for the second year insuccession. Nevertheless, the number of new start-upswas just under 6,700 – the lowest figure since 2002.

Start-up rate well above average

In relation to the number of existing companies, start-ups reach a penetration of 6.9 percent. This rate ishigher than in virtually all the other sectors compared.Only the energy and water supply industry has a higherstart-up rate (7.8 percent).

Within the ICT sector, the start-up rate is particularlyhigh among the ICT service providers. The start-up ratehere was 7.1 percent – almost three percentage pointshigher than in the ICT hardware sector. In relation tothe number of existing companies, considerably moreICT service provider companies are set up than in theother comparable segments of the service sector.

Global DIGITAL Performance Index

DIGITAL Performance Index6th place in the Global

ICT turnover

5th place for

links betweenthe Digital Economy and other sectors

3rd place for the

Infrastructure4th place

in the Global DIGITAL Performance Index –

Market6th place


Usage5th place


Global DIGITAL Performance Index 21

Global DIGITAL Performance IndexMarket, infrastructure, usage – Germany in sixth place

The success of the Digital Economy, i. e. the ICT sectorand the Internet economy, is based on three pillars: thestrengths of the market, the framework conditions andthe use of technologies and applications.

In order to compare the performance of different coun-tries, we analyse the market strength, i. e. supply anddemand, turnover and exports. Furthermore, the tech-nical infrastructures and basic economic conditionsplay an essential role in a well-functioning Digital Eco-nomy. The use of digital technologies, products andservices is crucial when it comes to digital transforma-tion. Only well-informed users with an affinity for tech-nology will enable the market to develop further. In-vestments will only be worthwhile if there are enoughusers who are willing to profit from technological in-novations.

In this report, the performance of the ten most impor-tant digital nations is analysed using 48 key perform-ance indicators. A secondary analysis and an inter-national ICT expert survey were carried out by TNSInfratest in ten countries. Furthermore, proprietarysurvey data from the Centre for European EconomicResearch (ZEW) and TNS Infratest was used. In order toallow international comparisons, the best location inthe ten-nation ranking is given 100 index points. Theother nations are then positioned in relation to the best in each class. This results in country rankings.

Global DIGITAL Performance Index – Germany in sixthplace in the ten-nation ranking

In the Global DIGITAL Performance Index, Germany isin sixth place, with 53 index points out of 100. AlthoughGermany managed to improve by four index points topass the 50-point mark, its overall performance remainsmediocre.

The biggest improvement was seen in China. The per-formance of its Digital Economy improved by sevenindex points. As a result, China has jumped from sev-enth place in the previous year to fourth place and hascaught up with Japan in fourth place. After two fourthplaces in the ranking, Germany can only manage sixthplace. With 52 points, Finland is closely behind Ger-many in seventh place. The USA dominate the DigitalEconomy world markets as a clear leader. With an im-provement in the index of three points, the USAachieved 80 points out of 100. South Korea is in secondplace with 66 index points – no changes as compared tothe previous year. Although it has dropped one point to57 index points, Great Britain follows in third place. Asin the previous year, the last three places were taken byFrance, Spain and India.

Global DIGITAL Performance Index

USA

South Korea

United Kingdom

China

Japan

Germany

Finland

France

Spain

India

80

66

57

55

55

53

52

48

41

31

1.

2.

3.

4.

4.

6.

7.

8.

9.

10.

Source: TNS Infratest, 2015; as at 2014, previous year’s values in brackets

(1.)

(2.)

(3.)

(7.)

(4.)

(6.)

(5.)

(8.)

(9.)

(10.)

(77)

(66)

(58)

(48)

(53)

(49)

(50)

(47)

(39)

(33)

Global DIGITAL Performance Index – Market

from the internet economy€1,266 per capita

turnover

e-commerce per onliner

€482 spent on

ICT exports

online advertising

ICT turnover

5th place for

Market6th place


10th place for the proportion of

in relation to all exports

5th place for

Global DIGITAL Performance Index – Market 23

In order to assess the global performance in the digitalmarkets, the supply and demand of digital markets,turnover developments and exports were analysed. Theresults for the 17 factors observed in this area are asfollows:

China’s importance on world markets increased signifi-cantly

The USA is the clear leader in the global digital marketassessment. With 78 points out of 100, the country’sscore has improved by four index points compared tothe previous year. South Korea is in second place with56 index points, followed by China with 51 points. Thebiggest improvement – ten index points and one placein the ranking – can be seen here.

Germany below average in sixth place

In spite of improving five points to reach 36 indexpoints, Germany remains in sixth place. Germany’sperformance is below average. Eight fifth places, fivesixth places, two seventh places, one eighth place andone last place for the 17 indicators observed in themarket assessment show that the German DigitalEconomy needs to catch up significantly.

Fifth place for the performance of the ICT and Interneteconomy

Although Germany has increased “turnover growth inthe areas of telecommunications and information

technology”, Great Britain has overtaken Germanywhen it comes to the shares of global ICT turnover. Ithas pushed Germany into fifth place behind the USA,Japan, Great Britain and China. When it comes to the“shares of IT and TC turnover on the world market” and“IT and TC turnover growth”, Germany is in fifth placein each case. The same applies to “per capita Interneteconomy spendings”. This is also valid for the shares of“Internet advertising turnover on the advertising mar-ket”, “e-commerce spendings per Internet user” and“per capita ICT spendings”.

Below-average scores, particularly for the importance ofICT to the economy

Germany’s performance is below average when itcomes to a number of indicators. These are “productionvalue in the ICT sector” (sixth place), “gross fixed capitalinvestments” (sixth place), “IT spendings in relation toGDP” (sixth place), “gross value creation in the ICT sec-tor” (seventh place) and “TC spendings in relation toGDP” (eight place). The same applies to the “shares ofturnover with Internet connections in relation to TCturnover”, “employees in the ICT sector” (sixth place ineach case) and “spendings on online content” (seventhplace).

Share of ICT exports a clear weakness in Germany

Regarding the “share of ICT goods and ICT servicesexported in relation to all exports”, Germany is in lastplace.

Global DIGITAL Performance Index – MarketGermany below average in sixth place

Global DIGITAL Performance Index – Market

USA

South Korea

China

Japan

United Kingdom

Germany

Finland

France

India

Spain

78

56

51

42

40

36

35

29

23

23

1.

2.

3.

4.

5.

6.

7.

8.

9.

9.


(1.)

(2.)

(4.)

(5.)

(3.)

(6.)

(6.)

(8.)

(9.)

(10.)

(74)

(55)

(41)

(40)

(42)

(31)

(31)

(28)

(27)

(20)

Global DIGITAL Performance Index – Infrastructure

90.6%

mobile phone penetration 120.4%

internet penetration in households89.5%

computers in households

of specialist personnel

Infrastructure4th place


innovation1st place for

10th place for availability

Global DIGITAL Performance Index – Infrastructure 25

The infrastructural analysis looks at the basic technicaland industrial conditions and frameworks. The resultsfor the 17 factors observed are as follows:

South Korea leader – Germany in fourth place with goodperformance

South Korea leads the ten-nation ranking with 82 indexpoints out of 100. Great Britain and France are in jointsecond place with 81 index points each. Regarding theframework conditions, Germany moved up a place(improvement of two index points) and is thus in jointfourth placewith Finland (79 index points each). With77 index points, the USA only achieved sixth place. Thegrowth markets China (50 points) and India (27 points)were last in the ranking.

Germany leader for innovation

Out of all the factors observed, Germany performs bestwhen it comes to “innovation”. The international ICTexpert survey carried out by TNS Infratest shows thatGermany is ahead of Finland, Spain, France and theUSA. When it comes to “links of the ICT sector withother traditional sectors” Germany achieved third place.Finland and Japan are ahead of Germany. Germany is ina good third place when it comes to “Internet access inhouseholds”, the “penetration of mobile phone con-tracts”, “investment security when developing the TCnetwork infrastructure ” and the “quality of mathemati-cal and scientific teaching”.

Average performance for three factors

Germany’s performance is good to average when itcomes to the “penetration of broadband connections”(fourth place), the “proportion of ICT start-ups in rela-tion to all start-ups” (fourth place) and the “quality ofbasic tax conditions” (fifth place).

Room for improvement regarding the penetration of enddevices for Internet use

Although Germany achieved a good second place whenit comes to the “penetration of desktops”, Germany hasto catch up regarding the penetration of new hardware.For example, Germany performed poor when it comesto the “penetration of smartphones” (seventh place) andthe “penetration of tablets” (eighth place). This is alsovalid for the “availability of venture capital” (sixthplace), the “quality of basic regulatory conditions” (sixthplace) and the “share of ICT patent applications in rela-tion to all patent applications” (eighth place).

Availability of specialist personnel – the biggest weak-ness in Germany – last place

In the strengths and weaknesses analysis of the inter-national ICT expert survey carried out by TNS Infratest,Germany was in tenth place, i. e. last, when it comes tothe “availability of specialist personnel”. The expertsregard Germany’s (imminent) lack of ICT professionalsas a particular weakness.

Global DIGITAL Performance Index – InfrastructureGermany in a good fourth place

Global DIGITAL Performance Index – Infrastructure

South Korea

France

United Kingdom

Germany

Finland

USA

Japan

Spain

China

India

82

81

81

79

79

77

74

66

50

27

1.

2.

2.

4.

4.

6.

7.

8.

9.

10.


(1.)

(3.)

(2.)

(5.)

(3.)

(6.)

(7.)

(8.)

(9.)

(10.)

(83)

(80)

(81)

(77)

(80)

(76)

(72)

(66)

(49)

(26)

Global DIGITAL Performance Index – Usage

12%

music downloads3rd place for

use mobile Internet 51%

of onliners use e-learning once a week

openness towards ICT4th place for companies’

e-government8th place for

Usage5th place


Global DIGITAL Performance Index – Usage 27

In this chapter, we analyse the use of new technologiesand services by citizens, companies and public adminis-trative bodies. The results for the 14 factors observed inthis area are as follows:

USA leader, Germany in fifth place with an averageperformance

The USA leads regarding the usage of new technologyand services with 88 index points out of 100. Great Bri-tain is in second place (85 points) and South Korea is inthird place (80 points). These countries improved theirperformance slightly. Compared to the previous year,Germany dropped down a rank to fifth place. Ger-many’s performance remains at 76 points. In contrast,Finland which was in joint fourth place with Germanyin the previous year improved by one index point toreach 77 points and thus remained in fourth place. Ger-many is followed by Japan with 74 index points. Franceand Spain are in joint seventh place, each with 72points. The growth markets China (70 points) and India(57 points) were last in the ranking.

Germany mainly average when it comes to private use

Overall, the use of new technologies and applicationsfor private purposes is average only. Germany’s bestperformance is third place for the “number of musicdownloads per Internet user”. However, Germany onlyscored 36 index points here. The clear leader is the USA(100 points), followed by Great Britain (69 points).

In none of the other factors observed are the top threecountries so far apart as they are for music downloads.Germany is in fourth place for “B2C e-commerce usage”.Germany achieved also a good fourth place for both“companies’ openness towards digitalisation” and the“use of new technologies and applications in compa-nies”. When it comes to the “downloading of apps”,Germany was in fifth place, as it was for “Internet useamong the population”.

Public administrative bodies: Germany in good fourthplace

German administrative bodies achieved fourth place for“boosting the use of ICT”. Germany also achieved a goodfourth place for the “willingness of governmental bod-ies to digitise their services and products.

Weaknesses when it comes to Internet use in companies,online banking, e-government, mobile Internet use

Compared to other countries, Germany only achievedsixth place for “B2B Internet use in companies” andthus dropped a place compared to the previous year.With sixth place, Germany’s performance when itcomes to the “use of online banking” is not satisfactoryeither. There is still some catching up to do when itcomes to “mobile Internet use” as well as the “use ofsocial networks” and “e-learning services” (eighth placein each case). The same applies to the “use of e-govern-ment services”.

Global DIGITAL Performance Index – UsageGermany in an average fifth place

Global DIGITAL Performance Index – Usage

USA

United Kingdom

South Korea

Finland

Germany

Japan

France

Spain

China

India

88

85

80

77

76

74

72

72

70

57

1.

2.

3.

4.

5.

6.

7.

7.

9.

10.


(1.)

(2.)

(3.)

(4.)

(4.)

(6.)

(7.)

(7.)

(9.)

(10.)

(86)

(83)

(81)

(76)

(76)

(73)

(71)

(71)

(68)

(57)

Location factors, growth areas and top players

IT security is top growth area up until 202063 %

2nd top growth area:mobile computing54 %

3rd top growth area: transaction services on the Internet

52 %

Industry 4.0 isgrowth area44 %

“innovation”“market access“

Top strengths

“availability of specialist personnel”“network infrastructure”

Top weaknesses

Location factors, growth areas and top players 29

Location factors, growth areas and top players

The international expert survey

In August 2015, 1,001 ICT experts took part in an inter-national survey. The enquiry was carried out online inten countries (Germany, the USA, South Korea, India,China, Japan, Great Britain, France, Spain and Finland)and in eight languages by TNS Infratest. The surveysupplements the results of the Global DIGITAL Perfor-mance Index.

Top strengths “innovation” and “market access” –Advantages regarding “links” and “legal framework”

When analysing the relative strengths and weaknesses,a statistical expected value is calculated. Values abovethis figure are strengths and values below it weaknessesof the locations.

In Germany, innovation in the ICT sector was highlight-ed as a particular strength by those surveyed (increase of7.5 percentage points, first place). The interviewees alsoregard market access, i.e. the ability to sell products andservices nationally and internationally, as a particularstrength (6.6 percentage points). With a rise of four per-cent in each case, both the links between the ICT sectorand other traditional sectors and the basic legal condi-tions were assessed very positively by German ICTdecision-makers. Further advantages are the “time tomarket”, the development of new business areas and the basic conditions for investments.

Top weaknesses availability of specialist personnel andnetwork infrastructure – Market power a clear disadvan-tage

The decision-makers surveyed regarded the availabilityof specialist personnel (decrease of eight percentagepoints) as the most obvious weakness. According to thesurvey, the network infrastructure (decrease of 6.4 per-centage points) is the country’s second key weakness.The interviewees were also critical of the sector’s mar-ket power (decrease of 3.5 percentage points), i. e. itsability to influence relevant developments and deci-sions on the global markets. Moderate weaknesses wereseen in the growth rates in the ICT sector, the level ofdemand, interest in technology within the populationand the start-up companies.

Growth areas until 2020: IT security is top growth area

Top growth areas until 2020(> 50 percent of votes): More than half of the experts re-gard three specific growth areas as particularly promis-ing on an international level: IT security (53 percent),transaction services on the Internet (51 percent) andcloud services (51 percent). In Germany, mobile com-puting services (54 percent) are positioned between ITsecurity (63 percent) and transaction services on theInternet (52 percent).

Promising breakthrough areas until 2020(Between 44 percent and 49.9 percent of votes): In Ger-many, these include cloud services and big data (50 per-cent each, fourth place) as well as Industry 4.0 (44 per-cent, sixth place), social collaboration (42 percent, sev-enth place) and smart services (40 percent, eighth place).

Hidden champions(< 40 percent of votes): Hidden champions are embed-ded systems (39 percent, ninth place), 3D printing (37percent, tenth place) and e-health / telemedicine (35percent, eleventh place).

Top players: global players – applications – research anddevelopment

According to the German experts four areas will en-courage the future developments: the “global players”(67 percent), the “applications” (66 percent) and “re-search and development” (62 percent). “ICT start-ups”are also regarded as a driver, albeit to a lesser extent (55percent). Politics and private households (41 percenteach) have less of an influence.

Summary

The digitalisation of the German economy

generate 60 % or more ofoverall turnover digitally 27%

will invest more than 10 %

of total turnover in digitalisation in 2020

37%

of services in the servicesector already highly digitalised

56%

have not yet digitalisedany internal companyprocesses

7%

see digitalisation as keypart of business strategyuntil 2020

32%

do not use digital services49%

Digitalisation not yet advanced

In 2015, the DIGITAL Economy Index achieved 49points out of 100. According to estimates from com-panies surveyed, the DIGITAL Economy Index scoreshould rise to 56 points in the next five years. Thepredicted growth rate is moderate.

Pace of digitalisation in the service sector only half whatit is in the processing industry

In 2015, the level of digitalisation in the service sector(51 points) was significantly higher than in the process-ing industry. With just 37 index points, the processingindustry is digitally underdeveloped. However, the levelof digitalisation will improve significantly in the proc-essing industry until 2020. In the service sector, it is ex-pected to improve more slowly.

Different levels of digitalisation in commercial sectors in2015 / 2020

With 66 points, the level of digitalisation in the ICTindustry is far above the commercial sector (49 points).Knowledge-intensive service providers as well as thefinance and insurance industry are digitalised to anabove-average level. Retail and the energy industry aredigitalised to an average level, while the level of digitali-sation in transport and logistics, mechanical engineer-ing, other manufacturing, the automotive industry,health care and the chemical / pharmaceutical industryis below average.

Usage of digital technologies best, although it could befurther improved – digital business and digitalisation-friendly conditions need to be improved

The levels of digitalisation can be influenced by threekey components: the use of the latest digital technolo-gies, the digitalisation of business activity and digitali-sation-friendly processes, working procedures or re-sources. In the commercial sector, the usage of digitaltechnologies within companies scored 65 points. In thedigital business activity index, it scored 46 points. In thedigitalisation-friendly conditions index, it scored just 37points. Companies need to improve in digitalisation-friendly frameworks.

Critical success factors

Companies in the commercial sector can significantlyboost growth in the digital markets, provided that theyconcentrate their digitalisation efforts on increasingefficiency, improving innovation and implementingnew business models. The digital know-how of em-ployees has a significant leverage effect on digitalisa-tion. At the same time, a fully digitalised value chain hasa considerable influence over ongoing digitalisation.However, there is a lack of its implementation becausedigital services are not yet widely used. Furthermore,widespread digital information and sales channels alsohave significant influence over digitalisation progress.

What politicians can do

Which are the areas politicians should encourage tosupport digitalisation? 92 percent of companies believethat politicians should take care of “IT security”, 90 per-cent of “encouraging broadband development” and 78percent each of “training specialist personnel” andstriving for “better data protection regulations”. Statesubsidies for digitalisation as well as developing thedigital EU domestic market are less important.

The digitalisation of the German economy 31

The digitalisation of the German economySummary


Digitalisation of the economynot advanced in 2015

Moderate pace of growth in thedigitalisation of the economyuntil 2020

56points

Above-average level of digitalisation amongservice providers in 2015

51points

Processing industry digitallyunderdeveloped in 2015

Highest level ofdigitalisation among ICTcompanies in 2015

66points

Lowest level of digitalisation in thehealth care sector in 2015

36points

49points

37points


Influence of digitalisation on

business success

The survey

Between 17 August and 11 September 2015, TNS Infra-test carried out a representative survey among Germancompanies regarding the current level and future devel-opment of digitalisation in Germany. The questionnairewas developed in close partnership with the Centre forEuropean Economic Research (ZEW), Mannheim.

The survey is representative for the commercial econo-my, i. e. for the following eleven sectors: mechanicalengineering, automotive engineering, the chemical /pharmaceutical industry, other manufacturing, theinformation and telecommunications sector, the en-ergy and water supply industry, retail, transport andlogistics, the finance and insurance sector, the knowl-edge-intensive service providers (e. g. consultants,market researchers, etc.) and the health care industry.

The success of the Digital Economy is based on threekey pillars: the importance on the world markets, infra-structure framework conditions and the use of digitaltechnologies and services. The following questions haveto be answered:

▶ To what extent does digitalisation influencebusiness success?

▶ To what extent are companies already gearedtowards digitalisation?

▶ What is the usage intensity of digital devices,services and technologies in the companies?

The results of the survey are summarised in the DIGI-TAL Economy Index. The index measures the extent towhich German companies are currently digitalised andhow this will develop up until 2020. The DIGITAL Eco-nomy Index measures the level of digitalisation in theGerman commercial economy and its sectors for 2015and 2020 using a figure between 0 and 100 points. Zeropoints means that no business procedures, internalcompany processes are digitalised and that no digitaltechnologies are used. The maximum value of 100points would indicate that the economy is fully digi-talised.

With the DIGITAL Economy Index, the eleven sectors inthe commercial economy can be compared with oneanother. Furthermore they can be classified accordingto their level of digitalisation. Critical success factorsencouraging the digitalisation process within the com-mercial economy can be identified.

In a separate report, eleven DIGITAL sector profilesprovide information as to how far digitalisation hasprogressed in each sector, what the pace of digitalisa-tion will be in the future and which barriers exist. Thesector-specific, critical success factors help to focusindustrial policy and gear it towards digitalisation prog-ress. A separate analysis of German medium-sized com-panies will also be carried out. The separate reports willbe available for downloading on the websites of theFederal Ministry for Economic Affairs and Energy, TNS Infratest and the Centre for European EconomicResearch (ZEW).


Measuring the level of digitalisationBasics

° Importance of digitalisation

° Satisfaction with digitalisation

° Turnover with digital products and services

° Scope of digital products and services

° Influence of digitalisation on company

success

Level of use of digital

technologies and services

° Use of digital devices

(e. g. computers, tablets)

° Use of digital infrastructures

(e. g. mobile /stationary Internet)

° Use of digital services

(e. g. cloud computing, big data)

Orientation of businesses towards

digitalisation

° Digitalisation as part of business strategies

° Digitalisation of internal company processes

° Willingness to invest in digitalisation

DIGITAL Economy Index 2015: Sectors – clustering relative to the commercial economy (index=49 points)

Half way to digitalisation with 49 points out of 100

In 2015, the DIGITAL Economy Index which measuresthe level of digitalisation of the commercial economyachieved 49 points out of 100. This value below the fifty-point mark shows that we have not made much prog-ress with digitalisation. According to estimates from thecompanies surveyed, the DIGITAL Economy Indexscore should rise to 56 points in the next five years. Thepredicted pace of growth is moderate only.

Service sector with much higher level of digitalisationthan processing industry in 2015 – Moderate pace ofdigitalisation until 2020

In 2015, the level of digitalisation in the service sector(51 points) was significantly higher than in the process-ing industry. With just 37 index points, the processingindustry is digitally underdeveloped. Up until 2020, thelevel of digitalisation in the processing industry willimprove significantly – by 13 index points. This meansthat half of the maximum of index points will havebeen achieved by 2020. Digitalisation is expected toprogress much more slowly in the service sector. TheDIGITAL Economy Index for the service sector willincrease by six index points to 57 points. The pace ofdigitalisation will therefore be only half what it is in theprocessing industry; however, the departing level ofdigitalisation is already much higher.

Most economic sectors will digitalize slowly

The DIGITAL Economy Index shows that the elevensectors observed can be subdivided into five digitalisa-tion dimensions.

34 DIGITAL Economy Index

DIGITAL Economy IndexThe digitalisation of the commercial economy and its sectors

Level of digitalisation well above average

ICT

Level of digitalisation above average

Knowledge-intensive service providers

Finance and insurance service providers

Level of digitalisation average

Retail

Energy and water supply industry

Level of digitalisation below average

Transport and logistics

Chemicals /pharmaceuticals

Mechanical engineering

Level of digitalisation well below average

Automotive engineering

Other manufacturing

Health care

Source: TNS Infratest, representative survey: “Digitalisation in the German economy 2015”, own calculation, n = 770

Index = max. 100

66

59

55

50

47

40

40

39

37

36

36

DIGITAL Economy Index 2015 / 2020: Sub-areas

Service sector

Processingindustry

Source: TNS Infratest, representative survey: “Digitalisation in the German economy2015”, own calculation, n = 770

5137

57

Commercialeconomy

49

5650

Index = max. 100

2015

2020


Level of digitalisation well above average: With 66points, the ICT sector is well above the DIGITAL Eco-nomy Index with a score of 49 points. In 2020, the ICTsector will have achieved a score of 71 points and willremain the sector where the level of digitalisation ishighest. The ICT sector is the single sector of the eco-nomy where the level of digitalisation is well aboveaverage and is thus a pioneer in the digital transforma-tion.

Level of digitalisation above average: With 59 indexpoints, the knowledge-intensive service providers are insecond place in 2015. By 2020, their score will improveby three index points. The finance and insurance serviceproviders achieve 55 index points in 2015 and will havea score of 62 index points in 2020. As a result, they willdraw level with the knowledge-intensive service pro-viders.

Level of digitalisation average: With 50 index points,retail was in fourth place in 2015. This means that halfof the maximum index points has been achieved. Al-though retail will achieve 56 index points in 2020, it willdrop a position to fifth place because digitalisation willbe progressing more quickly in other sectors. The ener-gy and water supply industry (2015: 47 points) will im-prove by 12 points and will achieve a score of 59 indexpoints in 2020. As a result, it will rise from fifth to fourthplace in the ranking.

No significant changes in these digitalisation dimen-sions are expected in 2020. In contrast, digitalisation isgathering pace in the areas currently with low levels ofdigitalisation. Sectors are moving up to the next digi-talisation dimension or moving down to the next classif their pace of digitalisation is comparatively slow.

Level of digitalisation below average: Transport andlogistics (2015: 40 points, 2020: 49 points) will remain asector with a low level of digitalisation. Mechanicalengineering (2015: 39 points, 2020: 51 points) will riseup to the next digitalisation dimension. The chemicaland pharmaceutical sector (2015: 40 points, 2020: 46points) will likewise remain a sector with a low level ofdigitalisation.

Level of digitalisation well below average: Health care(2015: 36 points, 2020: 44 points) will remain a sectorwith a very low level of digitalisation. Automotiveengineering (2015: 37 points) has a very low level ofdigitalisation, but with 48 points will rise to the nextdigitalisation dimension up in 2020. The pace of digita-lisation is very high in other manufacturing (2015: 36points, 2020: 50 points). This sector will improve by twodigitalisation dimensions to reach an average level ofdigitalisation.

Progress in digitalisation 2015/2020

DIGITAL Economy Index 2020: Sectors – clustering relative to the commercial economy (index = 56 Points )

Level of digitalisation well above average

ICT

Level of digitalisation above average

Knowledge-intensive service providers

Finance and insurance service providers

Level of digitalisation average

Energy and water supply industry

Retail

Mechanical engineering

Other manufacturing

Level of digitalisation below average

Transport and logistics

Automotive engineering

Chemicals /pharmaceuticals

Level of digitalisation well below average

Health care

Source: TNS Infratest, representative survey: “Digitalisation in the German economy 2015”, own calculation, n = 770

Index = max. 100

71

62

62

59

56

51

50

49

48

46

44

Business success in digital markets

digitalisation is important80%

are satisfied with thedegree of digitalisaitonreached

88%

of turnover in the ICT sector generated predominantly digitally

63%

do not generate any turnover digitally34%

of service companies provide digital services56%

digitalisation hassignificant influence over companies

58 %

In this chapter, we analyse the extent to which digi-talisation influences business success.

Influence of digitalisation over business success still lowin 2015 – greater in service companies than in theprocessing industry

80 percent of all companies surveyed regard digitalisa-tion as important. In the service sector, this figure is 81percent – ten percentage points higher than in theprocessing industry.

88 percent of the companies are satisfiedwith thecurrent level of digitalisation reached in their compa-nies. At 89 percent, the level of satisfaction in the servicesector is even higher than in the processing industrywhere it is 84 percent.

The commercial economy generates just 27 percent ofturnover predominantly digitally (> 60 percent ofturnover). This figure is 29 percent for service providersand 15 percent for the processing industry. 14 percent ofcompanies in the commercial sector generate between31 and 60 percent of overall turnover digitally, whilejust 27 percent of companies generate between one and30 percent of overall turnover in this way. 21 percent ofcompanies do not generate any turnover digitally.

While service companies sell 56 percent of their pro-ducts and services predominantly digitally, the pro-cessing industry clearly has some catching up to do. Itsdigitalisation quota is just 37 percent. 38 percent of thecommercial sector, 36 percent of the service providerssurveyed and half of those in the processing industry

think that the level of digitalisation of products andservices is low. Products and services are not digitalisedin 12 percent of companies in the processing industry.Among service providers, this figure is six percent.

60 percent of service companies regard the influence ofdigitalisation over their company success as high. Incontrast, 57 percent of companies in the processingindustry are of the opinion that its influence is “fairlysmall or very small”. Only in the ICT sector is the major-ity of companies – 52 percent – convinced that the in-fluence of digitalisation over company success is “ex-tremely high” or “very high”.

What can be done to increase the proportion of businessactivities carried out digitally by 2020?

The DIGITAL Roadmap 2015 / 2020 confirms that “in-creased efficiency” through digitalizing internal pro-cesses, working procedures and resources has a signi-ficant influence on the progress of digitalisation. The“innovation” of companies which is encouraged by thedigitalisation of processes and applications will alsobecome a permanent driver by 2020. The “competitiveadvantages” that can be achieved through digitalisationand the “improvement in the quality of products andservices” are also regarded as key drivers.

Increased efficiency and innovation are the permanentgrowth drivers on the digital markets and the areaswhere companies should mainly invest if they are to besuccessful digitally. Investments in developing therange of digital products and services will also help toensure greater digital business success.

Business success in digital marketsSummary

Business success in digital markets 37

Orientation of businesses towards digitalisation

have highly digitalisedinternal company processes

34%

of the processing industry withhighly digitalisedcompany processes

22%

with digitalisation askey part of business strategy until 2020

35%

ICT sector: digitalisation key part ofbusiness strategy

90%

will invest more than 10 %

of total turnover in digitalisation in 2015

25%

of health care sector with no spendings on digitalisation until 2020

13%

Orientation of businesses towards digitalisation 39

In this chapter, we look at the extent to which compa-nies are internally geared towards digitalisation.

Digitalisation of internal company processes much moreadvanced in the service sector than in the processingindustry

34 percent of companies in the commercial sector havealready digitalised 60 percent or more of their internalcompany processes (service companies 36 percent, pro-cessing industry 22 percent). Such highly digitalisedprocesses are currently only encountered on a majoritybasis in ICT companies (51 percent). In 27 percent ofcompanies in the commercial sector, internal processesare between 31 and 60 percent digitalised. 24 percent ofcompanies in the commercial sector have digitalised upto 30 percent of internal company processes. Seven per-cent of companies have not digitalised any processesyet.

Strategic role of digitalisation to increase until 2020 –service providers are forerunners

Digitalisation plays a significant role in service compa-nies’ business strategies and will continue to do so inthe future (2015: 65 percent, 2020: 70 percent). In con-trast, it tends to play a minor role in the business stra-tegies of companies from the processing industry (2015:49 percent, 2020: 51 percent). Up until 2020, institutionsin the health care sector (54 percent) will be the onlyones where digitalisation plays only a “minor role” inbusiness strategies.

Investments in digitalisation to increase significantly by 2020

In 2015, 25 percent of companies in the commercialsector invested more than ten percent of their overallturnover in digitalisation. In 2020, this figure will be 37percent. The proportion of companies with a very highwillingness to invest is increasing in all sectors. Up until2020, 20 percent of companies in the commercial sectorwill invest between six and ten percent of their overallturnover in digitalisation, while this figure was just 18percent in 2015. Ten percent of companies in the com-mercial sector did not invest in 2015. By 2020, this figurewill have fallen to six percent.

What can be done to ensure that internal company pro-cesses, resources and framework conditions are gearedtowards digitalisation more quickly?

The “digital know-how of employees” is proving to be apermanent driver. A “fully digitalised value chain” hasconsiderable influence over the digitalisation progress,even if there will be a lack of its implementation up to2020. Greater efforts in this area are worthwhile andfoster internal company digitalisation processes.

Orientation of businesses towards digitalisationSummary

Use of digital devices, infrastructures, services

of the processing industryworks without any digital devices

6%

use digital devices very intensively77%

use no digital services49%

of ICT companies use no digital services

31%

use digital infrastructuresvery intensively

69%

use no digital infrastructures7%

Use of digital devices, infrastructures, services 41

In this chapter, we look at the extent to which digitaltechnologies and services are used.

Very intensive use of digital devices in virtually allsectors

Digital devices are used very intensively in virtually allsectors. In 77 percent of companies in the commercialsector, more than 75 percent of permanent employeesuse digital devices. This applies to 82 percent of servicecompanies and 51 percent of the processing industry.An exception here is automotive engineering whereonly 46 percent of employees use digital devices. In theICT sector as well as the energy and water supply indus-try, virtually every company uses digital devices. In con-trast, other manufacturing has the highest level of non-use (seven percent).

Intensive use of digital infrastructures, especially inservice companies

In 69 percent of companies in the commercial sector, 75 percent or more of permanent employees use digitalinfrastructures for business purposes. The same appliesto 73 percent of service companies and 45 percent ofcompanies in the processing industry. In most sectors,more than 75 percent of permanent employees use di-gital infrastructures for business purposes. Exceptions here are chemicals / pharmaceuticals and automotive

engineering, each with 48 percent, transport and logis-tics with 46 percent and other manufacturing with 44percent. In seven percent of companies in other manu-facturing and service companies, no digital infrastruc-tures are used.

Use of digital services not widespread

49 percent of companies in the commercial sector donot use any digital services. The same applies to 49 per-cent of service companies and 47 percent of the pro-cessing industry. In 39 percent of ICT companies, morethan 75 percent of permanent employees use digitalservices. Even in the ICT sector, however, 31 percent ofcompanies do not use these services at all.

What can be done to ensure that the use of digital de-vices, services and infrastructures is geared towards thechanging needs of customers and external partners?

The “comprehensive availability of digital channels forindividualizing products and services” has a very highinfluence on digitalisation. Companies in the commer-cial sector should invest primarily in developing theirdigital channels. They are of great importance to thenew range of products and services and changing cus-tomer needs. The use of “Digital services” should beencouraged as they will further drive digitalisation inthe companies.

Use of digital devices, infrastructures, servicesSummary

Critical success factors for digitalisation

have employees withvery high level ofdigital know-how

61%

have completely digitalised theirvalue creation chain

33%

are convinced that digitalisation significantlyincreases efficiency

58%

see no significant increasein turnover as a result ofdigitalisation

62%

have a comprehensive range of digital channels

61%

make full use ofdigital advertising opportunities

34%

What are the critical success factors which most en-courage progress in digitalisation? On one hand, theinterviewees were asked to assess the importance of 18different critical success factors (“totally applies”, “ap-plies to some extent”, “does not really apply”, “does notapply at all”).

On the other hand, we measured the extent to whichthese factors influence the digitalisation process in thecompanies. Depending on the level of influence, wedifferentiate between the following factors:

• “Drivers”: Factors which mainly drive forward thedigitalisation processes in companies• “Hidden opportunities”: Factors which have greatinfluence over digitalisation and encourage the digi-talisation process in companies• “Hygienics”: Factors which accompany the digi-talisation process but have hardly any influence overthe digitalisation process in companies• “Potential savers”: Factors which have no influenceover internal company digitalisation processes

All results are summarised in three different “DIGITALRoadmaps” showing the influence of the diverse factorson business success (“market”), on internal processes(“infrastructure”) and external communication andcollaboration (“use”).

DIGITAL Roadmap “business success on digitalmarkets”. “Increased efficiency” is the most importantmotivator which drives digitalisation. The “innovation”of companies which can be encouraged through thedigitalisation of processes and services will become astrong motivator by 2020. The “competitive advantages”that can be achieved through digitalisation and the“improvement in the quality of products and services”are also regarded as “hidden opportunities”. Companiesare not being deterred from carrying out further digi-talisation projects because of the “very high costs”. The“very large amount of time needed” when carrying outsuch projects is regarded as unavoidable. Companiestend to expect “significant increases in turnover”through digitalisation in the long term only.

DIGITAL Roadmap “internal processes”. The “digitalknow-how of employees” is proving to be a strongdriver. A “fully digitalised value creation chain” hasconsiderable influence over the digitalisation process,even if there will be a lack of implementation up to2020. The majority of players in the economy believethat “excellent levels of data security and data protec-tion” as well as “easy access to high-speed networks” arefundamental hygienics. In contrast, the “political con-ditions” are fairly unimportant for the digitalisationprogress.

DIGITAL Roadmap “changing needs of customers andpartners”. The “comprehensive availability of digitalchannels for individualizing products and services” is astrong motivator driving digitalisation. The “improve-ment in communication with customers via digital in-formation channels” is regarded as self-evident. Al-though “tailor-made services from external partners fordigitalisation projects” and “links to external partners”will gain in importance until 2020, they will continue tohave only a minor influence over digitalisation. Thesame applies to “digital sales channels” and the “use ofdigital advertising opportunities”.

Critical success factors for digitalisation 43

Critical success factors for digitalisation

Make or buy – competitiveness or technical dependency?

service providers commissioned

Predominantly domestic

of companies source digital components fromexternal providers

66%

of companies regard paid content as important34%

agree to technical dependency when outsourcing IT

78%

of companies order IT services fromexternal providers

46%

may accept lower levels of data securitywhen outsourcing IT

65%

While digitalisation played a fairly minor role in com-panies up until a few years ago, it is currently becominga major issue. For 80 percent of companies in Germany,being up to date digitally is important. In sectors with a high level of digitalisation such as the ICT sector,knowledge-intensive service providers or finance andinsurance service providers, this figure is over 90 per-cent.

Digital components give to numerous products andservices their characteristic functions. Nowadays, hard-ly any work process is still entirely analogue. Rapidtechnological developments, the interaction betweendigital applications and the merging of the digital andanalogue world generate a high complexity and con-tribute to a growing importance of digitalisation as partof company’s strategies.

Numerous companies in all sectors already have a highlevel of digitalisation. Companies often take advantageof the services and expertise of external providers notonly when it comes to implementing and further de-veloping their IT-supported work and business pro-cesses but also when sourcing digital components for

their own products and services. Companies are awarethat this may result in greater technical dependencyand that they may have to accept lower levels of datasecurity. However, they see potential for innovationswhen using cutting-edge technologies and processes.Furthermore, the quality of their own products andservices can be improved. Digital transformation resultsin advantages and disadvantages. On the one hand, it isimportant to take full advantage of the potential forinnovations. In many cases, this is only possible throughparticipating in partnerships with or commissioning(external) IT experts. On the other hand, companiesmust manage technical dependency or data securityrisks.

Own digitalisation strategies required

Politicians should set out a regulatory framework hereas they did recently with the law on IT security. Ulti-mately, however, each individual company must de-velop and implement a suitable digitalisation strategy –with the help of external IT experts if necessary. Trustwill play an important role here. This is why many com-panies rely primarily on domestic external providerswhen it comes to digitalisation.

Make or buy – competitiveness or technical dependency? 45

Make or buy Competitiveness or technical dependency?

Expert workshop

“High speed essential, createscompetitive advantages”

“Trusted partnerships between all players needed”

“Digitalisation must be a matter for the CEO!”

“Perception of privacy is changing”

“We have to rethink what we mean by IT security!”

“Convenience as a success factor of IT security”

Expert workshop 47

As part of the long-term monitoring project, an expertworkshop took place at the Federal Ministry for Eco-nomic Affairs and Energy on 24 September 2015.

Decision-makers from central key sectors took part in alively discussion of the preliminary results of the study.The experts came from the following sectors: informa-tion and communications technology, mechanical en-gineering, automotive engineering, chemicals / phar-maceuticals, energy and water supply, retail, transportand logistics, finance and insurance services andknowledge-intensive service providers.

Representatives from nine ICT companies, 19 industrial,energy and retail companies as well as representativesfrom four industry associations, business consultancycompanies and public bodies took part. Among themwere chief executive officers, managing directors andchief information officers. The workshop was chairedby Bernd-Wolfgang Weismann, Head of the Division VIB1, Digital Agenda, Digital Eocnomy, National IT Sum-mit of the Federal Ministry for Economic Affairs andEnergy.

The workshop focused on how the strengths and weak-nesses of digitalisation in the German industry compareto those in other countries and what opportunities andchallenges lie ahead for Germany as a business location.The workshop participants came up with key state-ments regarding digitalisation in Germany and devel-oped strategies for encouraging digitalisation.

Improve digitalisation of markets and business activities

▶ Pace: Speed in digitalisation creates competitiveadvantages. ▶ Business models: New business models are driversfor digitalisation.▶ Production: Industrial ICT production will only bepossible with intelligent factories.▶ Level playing field: The market conditions must bethe same for all players (global, national, international).

Digitalisation-friendly framework conditions

▶ Cooperation: Trusting partnerships betweenplayers is of central importance.▶ Digital competencies: Digital know-how must be anintegrated part of the education system.▶ Prioritization: Digitalisation in a company must bea matter for the CEO.▶ Working conditions: The working conditions mustbe adapted to the digital world.

More intensive use of digital products and services

▶ Data clearance: The perception of privacy ischanging.▶ IT security: We have to rethink what we mean by ITsecurity. Politicians should bundle initiatives together.▶ User friendliness: Convenience is a key successfactor of IT security.▶ Added value: Digitalisation should be seen as abusiness opportunity.

Expert workshop

Study fact file

Study fact file 49

The Monitoring Report DIGITAL Economy 2015 ana-lyses the digital economy in Germany and the country’sposition in an international comparison of the leadingten digital economies. This year’s Monitoring Reportfor the first time analyses the digitalisation level ofGermany’s trade and industry broken down by sectors.In this report, TNS Infratest Business Intelligence – thespecialist for global market analyses within the TNSGroup – along with the Centre for European EconomicResearch (ZEW) answers the following questions:

▶ How does the German digital industry performcompared to that of other countries?

▶ What are the key German strengths and weak-nesses compared to those of the other countries?

▶ What contribution does the Digital Economy maketo the German economy?

▶ How far has digitalisation progressed in theGerman industry, its sectors and in medium-sizedcompanies?

▶ What can be done to accelerate the digitalisationprogress?

▶ What are the key challenges of the digital policy?What are the key areas of action?

Digital Economy: Key figures and internationalcomparison

In the first part of the report, we examine the DigitalEconomy in Germany and analyse its performance aswell as its strengths and weaknesses compared to theleading digital world countries. We look at the ICTsector as well as the Internet economy.

Added value analysis: In this section of the report, wepresent key performance indicators relating to the Di-gital Economy. The degree of innovation in the GermanICT sector is also assessed in detail. In addition, we ana-lyse ICT start-up activities and visualize their regionaldistribution.

Global DIGITAL Performance Index: The Global DIGI-TAL Performance Index examines the German DigitalEconomy compared to that of other leading digitaleconomies. Their performance is assessed with the helpof 48 key performance indicators identified throughsecondary research and expert surveys. We measure theinternational competitiveness in one index, as well as inseparate indices for digital markets, infrastructural con-ditions and the use of digital technologies in privatehouseholds, in companies, and in public bodies. We alsodetermine the top growth areas up until 2020.

The digitalisation of the German economy

In the second part of the report, we analyse the currentsituation and the future outlook of the digital industryin Germany and its sectors.

DIGITAL Economy Index: The DIGITAL Economy Indexshows the extent to which German companies are di-gitalised and how the situation will change betweennow and 2020. The DIGITAL Economy Index measuresthe level of digitalisation in the German industry and itssectors using a score between 0 and 100 index points.

DIGITAL Roadmap: We show which factors are drivingthe digitalisation of the German economy. We haveanalysed the extent to which 18 different factors arefulfilled and influence the DIGITAL Economy Index. Asa result, we are able to identify key drivers, hiddenopportunities, hygienics and potential savers.

Make or buy – competitiveness or technical depen-dency?: Finally, we looked at the extent to which theoutsourcing of ICT-based products is used and how thisis assessed.

Study fact file

Contact

Dr Sabine Graumann

Senior Director Overall responsibility “Monitoring Report DIGITAL Economy 2015”

TNS Infratest Business IntelligenceE-mail: [email protected]: +49 89 5600 1221

Prof Dr Irene Bertschek

Head of Research Department Information and Communication Technologies

Centre for European Economic Research (ZEW)E-mail: [email protected]: +49 621 1235 178

Tobias Weber

Project Manager “Monitoring Report DIGITAL Economy 2015”

TNS Infratest Business IntelligenceE-mail: [email protected]: +49 89 5600 1760

Downloads and further information: www.tns-infratest.com/bmwi

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www.bmwi.dewww.bmwi.de

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