For firms in the information economy – consisting of the information and communication technologies sector, media service providers and knowledge-intensive service providers – the internet is becoming an increasingly important tool for the purchase of goods and services from foreign countries or the sale of goods and services to international customers. This is the result of a survey among firms in the German information economy, conducted on a regular basis by the Centre for European Economic Research (ZEW), Mannheim.

Firms in the German information economy increasingly engage in cross-border electronic commerce to sell and purchase goods and services.
Firms in the German information economy increasingly engage in cross-border electronic commerce to sell and purchase goods and services.

In the past year, as many as 36 per cent of firms in the information economy used e-commerce to buy products from international suppliers via the internet, which corresponds to an increase of 15 percentage points compared to the levels recorded in 2011. Also in terms of sales activities, the share of businesses in the information economy selling goods and services online has been steadily increasing, amounting to approximately 12 per cent in 2016. This corresponds to an increase of 2.4 percentage points compared to 2014 and almost twice as high as in 2011.

The rising number of companies using e-commerce to sell or purchase goods and services internationally illustrates that the plan of the European Union to create a Digital Single Market (DSM) is increasingly becoming a reality. In the German information economy, good progress has been observed both on the supply and the demand side.

With a share of just over 40 per cent, media service providers were particularly active in selling goods and services to international customers online. This represents a considerable increase compared to 2011, when this share was still around 23 per cent. Knowledge-intensive service providers, such as law, tax and business consultancies, architectural and engineering offices, the advertising industry and market research companies, have experienced a particularly significant increase over time. Their share of businesses selling goods and services to international customers online is, however, still far lower than that of media service providers and the ICT sector.

The European Digital Single Market is taking shape

“The plan to introduce a European Digital Single Market seems to be increasingly successful. It would, however, be desirable if more German firms were to engage in electronic commerce to sell their goods and services to international customers,” says Dr. Jörg Ohnemus, deputy head of the ZEW Research Department “Digital Economy”.

Despite this overall positive development, around 72 per cent of companies in the information economy consider their products to be unsuitable to be sold online. Although this share has slightly decreased compared to 2015, it illustrates that the potential for future growth of the online supply of goods and services remains limited. Furthermore, more than half of the surveyed companies are still concerned about legal uncertainties associated with international electronic sales.

The survey also shows that firms in the information economy are much more active in e-commerce when it comes to purchasing products from foreign companies than in terms of selling goods or services internationally online. Far in the lead is the ICT sector, where around 60 per cent of the companies made online purchases from international vendors in 2016, an increase of around 9 percentage points compared to 2014. In this past year, media service providers recorded the highest percentage growth in terms of online purchases from international sellers, experiencing an increase of more than 26 per cent compared to 2014.

For further information please contact:

Dr. Jörg Ohnemus, Phone +49 (0)621/1235-354, E-Mail joerg.ohnemus@zew.de

 

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