The German ICT industry is investing more than 17 billion euros in innovations. In a comparative report on the digital economy by the Federal Ministry for Economic Affairs and Energy, Germany ranks first in terms of innovation capacity. However, in an overall index of the digital economy's performance, Germany ranks only mid-range.
Finland, the previous leader in innovation capacity, was pushed into second place by Germany. It is followed by the United Kingdom, the United States, and South Korea. Germany also improved its position in the availability of venture capital by four places internationally, now ranking third behind Finland and the United States. Federal Minister for Economic Affairs and Energy Brigitte Zypries says:
"In 2016, €934 million in venture capital was invested in Germany—almost €100 million more than the previous year. I'm pleased about that, and it shows that we have technologically and economically promising digital companies, and we've succeeded in making the framework for startup financing more attractive."
In e-government, however, Germany ranks a distant eighth out of ten, despite an increase from 67 to 80 points, ahead only of China and India. In the overall digital location index, Germany remains in sixth place out of ten, as in the previous year. The USA leads the ranking, ahead of South Korea and Great Britain. Zypries addresses Germany's weak points:
"However, we still have some catching up to do, especially in growth financing. Our goal is to double the volume of venture capital in the coming years—through the private sector, the public sector, KfW, and with the involvement of European financial partners. And the future federal government must also vigorously push forward other areas. This includes infrastructure expansion as well as e-government."
ICT sector continues to grow
A study of the degree of digitalization in the individual sectors in Germany reveals highly varied results: While the ICT sector is highly digitalized and knowledge-intensive service providers, the financial and insurance sectors, and retail are also rated as “above average,” there is a lot of catching up to do in the healthcare sector in particular.
At the same time, the importance of the ICT economy within Germany is also growing: its gross value added increased by 3.8 percent to 105 billion euros in 2016. Over 1.1 million people are employed in the ICT sector, more than in the automotive or mechanical engineering industries.
The "DIGITAL Economy Monitoring Report" is produced annually by Kantar TNS and ZEW Mannheim on behalf of the Federal Ministry for Economic Affairs and Energy. The report is available online here.
