Digitalization as an Economic Factor

Digitialization as an Ecomomic Factor: What does the digital transformation mean for Germany and Baden-Württemberg? LBBW provides answers.

Many people are saying that digitalization is a topic of the future. Indeed the digital transformation with its dramatic impact on our living and working worlds has long since become one of the greatest challenges being faced today. With huge risks and a wide range of opportunities. Previously a connection to the highway was an important locational factor. Today the equivalent is the quickest connection to the data highway. The speed of the internet connection has become a benchmark for competitiveness. In terms of broadband coverage, Germany has a lot of catching up to do. But not only here. Extensive investments in education are essential if our country is not to miss the connection.

Digitalization - Consistently Leveraging Germany's Potential

Experts from the Landesbank Baden-Württemberg Research department have examined carefully the potential and risks of infrastructure, education, work and social policy. We present the most important results in the following abstract. For a more extensive presentation, refer to our Dossier – Potential and Risks of Digitalization .

Digital Transformation: Opportunities and Risks for Germany

  • Success factor broadband internet: Economic potential by sectors

    Broadband has annual business potential of EUR 55.7bn.

    The positive economic impact as a result of intelligent networks in Germany could amount to EUR 55.7bn a year. This requires optical fibre and 5G networks across the country. However, in Germany the digital infrastructure is still inadequate – a competitive disadvantage.

  • Digitalization: Growth potential for gross product

    Up to 30% growth of gross value added

    If the right decisions for digitalization are made now, the upturn for gross value added across the German industrial landscape could amount to 30% by 2025. A total of 3.1% of costs could be saved, with an investment total of approximately EUR 31bn.

  • Structural change caused by automation: Share of employees who are subject to social security.

    13.3% of jobs in Germany are threatened.

    To 2025, 13.3% of jobs in Germany are under threat from digitalization and automation. Regions with many jobs in manufacturing are particularly impacted. A sustainable solution: Huge investments in digital education and training.

  • Digitalization: Structural change in the labour market by sector.

    Manufacturing professions most threatened by digitalization

    Automation changes the need for labor in the medium term. Jobs in production as well as in the IT and services segments could be reduced. On the other hand, it is difficult to substitute social and cultural services, as well as most health care professions.

  • Influence of  “E-Mobility” on jobs in the automotive industry

    Subsidized e-mobility threatens jobs

    Only in Baden-Württemberg a 100% e-mobility ratio would result in the loss of 110,000 jobs which could not be offset by new developments in the area of alternative drives and further opportunities resulting from digitalization. Companies must realign themselves with purchases and research.

  • Six elements for a successful digital transformation

    Six factors drive successful digital transformation

    Politicians must act now to create a firm foundation for digitalization. Key elements here are a new social policy, improvement of the digital infrastructure, modernization of labor law, financial relief for corporations and an Educational Policy 4.0.

Are you interested in more detailed presentations and analyses in respect to digitalization in Germany? Then take a look at our Dossier – Potential and Risks of Digitalization .

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