Highly Digitalised Companies Are More Resilient in Times of Crisis

Companies with a high degree of digitalisation were less affected by the economic crisis of 2008 and 2009 than companies with a low digitalisation level. This holds particularly for companies in the service sector. These are the findings of a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim.

In general, ICT-intensive firms are more productive than companies that are less digitalised. In order to implement digitalisation measures successfully, businesses need to adapt production and work processes, which in turn boosts both their efficiency and productivity. But do these digitalisation measures produce the same effects during economic crises? And are highly digitalised companies more resilient during such times? By assessing a new data set which includes information about twelve EU countries and seven industries for the period between 2001 and 2010, ZEW researchers were able to provide empirical answers to these questions.

According to the results of the study, ICT-intensive firms, particularly those in the service sector, were less exposed to the economic crisis than companies with a low degree of digitalisation. While these firms have hardly experienced any decreases in productivity levels and growth, less digitalised companies have suffered substantial losses over the course of the crisis. 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 save costs through a more efficient process design.

“Companies that invest in digital technologies and use them in a clever way are better equipped to respond flexibly to changes in economic framework conditions and to meet the challenges associated with economic crises,” says Professor Irene Bertschek, head of the ZEW Research Department “Digital Economy” and co-author of the study.

For further information please contact

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