Digitisation secures Germany 130 billion euros during Corona

Digitisation secures Germany 130 billion euros during Corona

The Innovation Index once again confirms the positive impact of network expansion on the German economy and its innovative capacity.

Particularly in the corona period, network expansion surprises as a booster of economic value, demonstrating its importance for a resilient economy.

About the Innovation Index

For the second time, the Vodafone Institute, in collaboration with Prognos AG, publishes the Innovation Index, which annually measures the economic and innovation-driving impact of network expansion in Germany. The Index allows to track regional differences in the network expansion on an ongoing basis and to compare the effects in the German districts and cities. The overall Index is designed to measure the impacts of network infrastructure on economic strength, innovative ideas and products, and a skilled workforce.

Digitalisation creates resilience in times of crisis

The special importance of network expansion has probably never been as evident as during the Corona pandemic. The economic damage, i.e. lost GDP compared to a scenario without Corona, amounts to 420 billion euros in 2020-2022. The internet and its technical enabler, network infrastructure, played a lifeline role during the pandemic. Digitised businesses continued to operate remotely despite contact restrictions, travel bans and lockdowns. And we have seen rapid growth in e-commerce. In the period from 2020 to 2022, digitalisation driven by the network expansion prevented a loss of 130 billion euros to the German economy. Without the network infrastructure, Germany’s GDP would have been correspondingly lower. This means that digitisation has contributed just as much to mitigating the effects of Corona as the economic state aid. State aid to companies in the form of subsidies, loans, capital injections and guarantees amounted to 130 billion euros.

Network expansion as a driver of the economy – not just in times of crisis

5.3 billion of annual GDP growth between 2013 and 2020 can be attributed to expanding networks. This corresponds to an average of around seven percent of annual economic growth during the observation period. Employees also benefit, having received an additional €1.5 billion in wages paid to them. Network expansion also brings more competition and fresh ideas. In Germany, 6,000 business registrations, 2,000 publications and 700 patents are directly attributable to network expansion. In regions with above-average connectivity, 2,000 additional R&D jobs are created annually and around 10,000 more students start studying there each year.

A detailed examination of the leaders and laggards in comparison with IID.22, as well as the results of the sub-indices, can be found in the interactive web magazine IID.2023 | Cover (webmag.io)

Download the full study as PDF here. Only available in german.