ICT Sector Continues to Grow

The ICT sector is the secret star performer of the German economy. When it comes to added value, the ICT sector captures the top of the list and even ranks ahead of the traditional mechanical engineering and automobile manufacturing industries. According to calculations based on the latest available figures of the Federal Statistical Office, the ICT sector contributed 4.7 per cent to the total value added of the German economy, and generated almost EUR 85 billion in 2011 (see figure 1). Compared to the previous year, the performance of the ICT sector has again improved. These are the findings of the study “Monitoring the German Information and Communication Economy” carried out by the Centre for European Economic Research (ZEW) in collaboration with TNS Infratest on behalf of the Federal Ministry for Economic Affairs and Energy (BMWi).

The ICT sector is also in the lead across branches regarding investments, which amounted to EUR 18.2 billion in 2011, i.e. 4.5 per cent of total gross fixed capital investment (see figure 2). Despite additional sales of approximately six billion euros, the ICT sector’s share in total sales of the German economy declined to 4.2 per cent. However, it still ranks ahead of the chemical/pharmaceutical and the mechanical engineering sectors (see figure 3).

Employment in the ICT Sector

In 2011, about 842,000 employees worked in the ICT sector. Mechanical engineering is the only sector with a higher number of employees. Employment numbers increased in particular in the ICT services sector between 2010 and 2011. On an average, each employee in the ICT sector contributes EUR 100,864 to the gross value added in Germany.

The ICT sector is also one of the most innovative sectors in Germany: 7.4 per cent of turnover is spent on innovation projects. The share of innovative businesses, what is known as the innovation rate, is almost 80 per cent (see figure 4).

ICT Responsible for More than One Fifth of Productivity Growth

Due to their diversity and the wide field of possible applications, information and communication technologies (ICT) provide impulses for innovation in the ICT-using sectors and businesses, thereby contributing to the performance of the entire economy. In the period between 1995 and 2010, ICT investments were responsible for 23 per cent of the annual growth in overall labour productivity.

In the period between 1995 and 2010, labour productivity (real value added per hour worked) in the German economy increased by an average of 1.54 per cent per year (see figure 5). Germany thus outperforms France, which recorded a moderate average annual increase in labour productivity of merely 1.30 per cent in the same period of time. These two countries are well ahead of Italy and Spain, which have rather low average annual growth rates of 0.36 per cent and 0.72 per cent, not least because of the economic crisis that emerged in 2009. Investments in ICT account for 0.36 percentage points, i.e. 23 per cent of the overall growth in German labour productivity of 1.54 per cent per year.

German Internet Economy Generates Sales of Almost EUR 79 billion

In 2012, the German Internet economy generated sales of about EUR 79 billion via e-commerce, data services, online gaming, etc. (see figure 6), which adds up to three per cent of the gross domestic product (GDP). In the period from 2010 to 2012, the Internet economy constantly grew in value as well as concerning the share of GDP. Data services and cloud computing were the main drivers of growth in 2012. At an average annual growth rate of 15 per cent in recent years, expenses on mobile data services amounted to about nine billion euros in 2012. In the same year, Internet-based applications and IT services such as cloud computing generated sales worth approximately EUR 24 billion, which is the lion’s share of the Internet economy.

Contact

Prof. Dr. Irene Bertschek, Phone +49 (0) 621/1235-178, E-mail bertschek@zew.de

Dr. Jörg Ohnemus, Phone +49 (0) 621/1235-354, E-mail ohnemus@zew.de