Internet Economy Keeps Growing – Industrial Companies Increasingly Focus on ICT-Based Innovations

Information and communication technologies (ICT) are drivers of innovation in traditional German sectors like mechanical engineering, vehicle construction and the electrical industry. Since the beginning of 2013, 36 per cent of industrial companies have introduced ICT-based innovations in Germany. Across all sectors, software and the Internet are key components in ICT-driven innovations. Prospects are bright for the Internet economy. The sector continued to grow over the past year and now accounts for business activities worth about EUR 85 billion. 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 German ICT sector was able to maintain its excellent business position in 2013 and significantly increased its gross value added to about EUR 89 billion. Keeping the level of the two preceding years, the ICT sector contributes 4.7 per cent to the gross value added in Germany. The ICT sector is thus on a par with automobile manufacturing (4.7 per cent) and ahead of the mechanical engineering sector (4.5 per cent). The 2013 overall sales in the ICT sector were approximately EUR 226 billion. This figure constitutes a year-on-year increase of EUR four billion, yet the total is still about EUR two billion below the level of 2011. The fluctuations in sales can largely be attributed to ICT hardware producers, while ICT service providers have recorded a constant growth in sales since 2010.

At the end of 2013, the ICT sector employed more than one million people, i.e. about one per cent more than in the previous year. Since 2009 the number of people employed in the ICT sector has increased by 12.9 per cent. In absolute terms this corresponds to 118,000 newly created jobs. "The ICT sector contributes more to overall employment in Germany than, for example, the automobile industry or the chemical and pharmaceutical industry," says Professor Irene Bertschek, head of the ZEW Research Department “Information and Communication Technologies“.

The value of the Internet economy reached approximately EUR 85 billion in 2013. ZEW uses the concept of the Internet economy to measure the extent and significance of Internet-based business activities in Germany. The value makes up a share of 3.1 per cent of the gross domestic product. In the period from 2011 to 2013, the Internet economy constantly grew in value as well as concerning the share in GDP.

This year's monitoring report is the first to include the sector index DIGITAL. This newly created index reflects the progress of digitalisation in different sectors. The DIGITAL index covers 21 sectors. With a total of 83 points, telecommunication companies rank first, closely followed by other service industries. Vehicle construction, one of the traditional sectors within the manufacturing industry, takes the sixth place with 72.2 index points. The highest increase between 2003 and 2011, measured in index points, was recorded in the textile, clothing and leather industries (about 40 index points). Despite substantial gains since 2003, the construction industry remains at the bottom of the ranking with a current reading of 36.6 points. Further analysis shows that a one-per-cent increase in the DIGITAL index corresponds to an average growth in productivity by 0.28 per cent.

For more information please contact

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

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