SMEs in Germany Lagging Behind in Terms of Their Use of Digital Technologies and Services

Small and medium-sized enterprises (SMEs) have certainly recognised the importance of digitalisation to the same extent as businesses in other economic sectors. There are, however, significant discrepancies in terms of SMEs' use of digital devices, infrastructures and services. This is the finding of a special assessment conducted by the Mannheim Centre for European Economic Research (ZEW) in collaboration with TNS Infratest as part of the DIGITAL Economy 2015 Monitoring Report on behalf of the Federal Ministry for Economic Affairs and Energy (BMWi).

Whilst 73 per cent of businesses in the economy as a whole provide between 91 and 100 per cent of their permanent employees with digital devices such as computers, tablets or smartphones for business purposes, only half of all SMEs reach such a high percentage in this regard. The figures are similar when it comes to digital infrastructures such as mobile or stationary internet or intranet networks. In only 11 per cent of SMEs do 91 to 100 per cent of employees have access to digital services such as cloud computing. In the economy as a whole, this is the case in 20 per cent of businesses.

Large companies are traditionally seen as "early adopters" as they are quick to acknowledge new technological trends. SMEs, however, are much more hesitant when it comes to adopting new technologies, not least because of their limited human and financial resources. Such businesses also often fail to recognise the necessity of making use of new Information and Communication Technologies (ICT). Figures relating to Industry 4.0, which implicates comprehensive digitalisation and networked production processes, indicate the huge discrepancies between large businesses and SMEs. 23 per cent of businesses with at least 500 employees are already involved in, or are planning, Industry 4.0 projects. The same can be said for between only three and eleven per cent of SMEs employing between 5 and 499 staff members.

SMEs demand higher levels of IT security and expansion of broadband

When it comes to political policies, however, SMEs demand much the same as businesses in the rest of the economy. According to SMEs, guaranteeing IT security and expanding broadband must be given top priority. Around 90 per cent of SMEs, and over 90 per cent of companies in the economy as a whole, consider that there is an urgent need for these issues to be addressed in government policy. In comparison to other businesses, however, SMEs do not consider improvements in data protection to be quite as crucial.

"The results show that SMEs are significantly lagging behind the rest of the economy in terms of digitalisation. Having said this, the same measures will help accelerate the rate of digitalisation – the expansion of broadband infrastructure and improvements in IT security. Indeed, it has been repeatedly seen that direct consultation and exchange between SMEs is extremely useful in terms of initiating and implementing digitalisation projects. We are therefore heading in the right direction with initiatives to support SMEs in their efforts to implement concrete digitalisation and networking projects," explaines Professor Irene Bertschek, head of the ZEW Research Department "Information and Communication Technologies".

DIGITAL Economy 2015 Monitoring Report

The DIGITAL Economy 2015 Monitoring Report, carried out on behalf of the Federal Ministry for Economic Affairs and Energy (BMWi), analyses the value added to the Germany economy as a whole by the digital economy and determines where Germany ranks amongst the ten globally leading world economies. The most recent Monitoring Report provides a breakdown of the extent of digitalisation thus achieved in the individual sectors of the German economy.

For more information please contact

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