Companies in Regions with Low Broadband Coverage Are Less Likely to Operate Their Own Websites

Broadband expansion in Germany is currently making only slow progress, with some regions having still no access to high-speed internet. This goes hand in hand with a lower Internet presence of German companies, since companies in regions with only limited broadband availability are considerably less likely to operate their own company website. These are the findings of a study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

The ZEW study is the first of its kind to analyse the online presence and website usage of 2.1 million companies in Germany by means of a web-scraping query method developed at ZEW. ZEW researchers found that whether or not firms have their own website depends primarily on company characteristics like size or business sector. Large companies in industries such as mechanical engineering are, for instance, more likely to have their own website. In addition, large companies with long-standing market experience tend to have their own websites, whereas small and new companies are less likely to maintain an online presence.

The ZEW study also indicates that there is a connection between the regional differences in the availability of broadband internet and the online presence of companies.As the study shows, companies located in regions with low broadband coverage, i.e. in municipalities where less than 75 per cent of households have access to an internet connection with a speed of at least 50 Mbit/s, are considerably less likely to operate their own websites. According to calculations by ZEW economists, this is estimated to affect approximately 30,000 companies in Germany, which corresponds to around 3.6 per cent of businesses in these municipalities.

This reluctance to set up an online presence could have a long-term negative impact on these companies, since having their own website is crucial for being able to participate in the digital market.“Corporate websites have long been an essential part of a company’s public image. Companies use websites, for instance, to share information about their products and services, to sell their products over the internet or to get in touch with customers,” explains Jan Kinne, a researcher in ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” and co-author of the study. “The currently slow progress made in broadband expansion seems to prevent companies from exploiting their full potential.”

For more information please contact

Jan Kinne, Phone +49/621/1235-297, E-mail: jan.kinne@zew.de