Internet Economy

High angle view of technicians working in server room. | © Erik Isakson/Getty Images

Internet Economy

Vibrant Heart of Europe’s Digital Landscape

With 84% of the German population (around 68 million) using the internet on a regular basis, Germany boasts the most internet users in Europe. This significant digital economy customer base is also coupled with the highest total purchasing power in Europe (EUR 1,776 billion), making Germany a crucial player in the market for the global digital economy. In line with the rest of Germany’s stable economy, the internet economy has faced no downturn from the European economic crisis.

The Industry in Numbers

From 2013 to 2014, the internet economy in Germany reached turnover of more than EUR 100 billion, representing an almost 12% increase. This growth also placed Germany fifth in the world in terms of turnover per capita (EUR 1,266) in the internet economy. This steady growth is leading to the rise of the German internet economy as a major force in Europe’s strongest overall economy.

A significant feature of the German economy is the importance of small and medium-sized enterprises (SMEs). These companies represent 99.95% of all German companies (around 3.67 million) and employ another 68% of the working population (29.1 million). These companies are best characterized by heavy investment and sustained technological and market innovation; features that have allowed them to become world leaders in a number of important industries and niche markets. For example, SMEs invested EUR 158 billion in new buildings and facilities in 2015, representing 27% of total gross fixed capital formulation and 45% of total corporate investment. These small and medium-sized companies also trained more than 1.2 million young adults (89% of all trainees) within the same period and developed 75% of all patents and innovations. A strong commitment to investment and innovation has also allowed these businesses to perform well in the internet economy, leading to a high level of diversification and a vibrant digital ecosystem where dominant industry giants are few and far between. This leads to an environment with few barriers to entry, allowing new and innovative start-ups – or “smart-ups” – the opportunity to enter this ever-growing industry.

Current market conditions are favorable, with many experts expecting growth in the German e-commerce sector. The B2C area in particular is growing phenomenally. During the period 2012-2015, B2C e-commerce grew by nearly 70% (from EUR 27.6 billion to EUR 46.9 billion) with further growth of 16% forecast in 2016. Ongoing digitalization, as well as a growing acceptance of the internet as a marketplace (driven by the growing popularity of smartphones and other mobile devices), will help create new innovative and sustainable online business models. The e-commerce economy is also growing as more businesses realize the advantages of buying and selling online.

In fact, according to a 2015 ibi study, 83% of companies reported buying online, at least in part. This growing B2B online demand is sure to create a plethora of opportunities for innovative products and business models in the German e-commerce market.

Development of the internet economy by subsector

Turnover of the Internet economy in Germany 2009 - 2011 | © ZEW 2012

Actions

Oliver Wilken Oliver Wilken | © GTAI

Contact Us

Oliver Wilken

‎+49 30 200 099 306

Webinar: Business Opportunities for Canadian Tech Companies in Germany | © GTAI

Webinar Review

Christof Wittig | CEO, Madvertise | © Madvertise + GTAI

Smart-up your business

ipad | © bloomua - fotolia.de

Newsletter

Sign up for our free Digital Economy Information Service to receive occasional industry news and event updates.

Customer Service

Step by step to success - have a look at our comprehensive line of services and see how we will help your business grow in Germany.

More

Industries