Digital Ubiquity: Enough Facts, Now Is the Time for Action
Comment
Issues relating to digitalisation featured heavily in the coalition agreement signed by the new German government, which, among other things, called for the creation of a European centre for Artificial Intelligence (AI) à la Airbus or CERN. This may be a step in the right direction. However, it is time for policymakers to do their homework after years of neglect. Specific areas in need of particular attention are broadband expansion, e-government and the promotion of small and medium-sized enterprises (SMEs). This is according to Professor Irene Bertschek, head of the Research Department “Digital Economy” at the Centre for European Economic Research (ZEW), Mannheim.
Far-reaching and ubiquitous – or simply “pervasive” – are adjectives frequently used to characterise digital technologies. This has contributed in no small part to digitalisation becoming one of the most widely discussed topics in the global debate on social and economic policy. It is therefore hardly surprising that the German government has committed itself to this topic and that the coalition agreement is almost overflowing with issues related to digitalisation. The pervasiveness and ubiquity of digitalisation are also the reason why an increasing number of disciplines and sub-disciplines at the university level are starting to look more closely at this issue.
Numerous empirical studies have shown that the use of information and communication technologies (ICT) in business creates potential for innovation and contributes to productivity growth. For example, highly digitalised firms were better able to weather the financial crisis of 2008/2009 than less digitalised firms. During this period, productivity levels and growth barely dipped in highly digitalised firms, whereas they experienced a sharp drop in firms with a low level of digitalisation. At the same time, businesses with a high degree of digitalisation were more successful than less digitalised companies in terms of implementing process innovations, which in turn allowed them to reduce costs through more efficient process design. Companies that use big data and systematically analyse large amounts of data are more innovative and in a better position to develop new products and services or significantly improve existing ones and are able to achieve higher revenue shares thanks to their innovations.
