The Digitalisation of the Economy – Research at ZEW

Are we going to lose our jobs because of digitalisation and artificial intelligence? Is Germany lagging behind in digitalisation? High-speed internet, algorithms, big data and digital services are changing economic and social processes at great speeds. New business models, working methods and forms of communication are emerging. This offers new opportunities to generate turnover, secure market shares and conquer new markets. But digitalisation also requires companies and employees to adjust to these new circumstances. In order to exploit the potential of digitisation for the economy and society to the full, it is important to know the possible applications of digital technologies and to understand how they work to make them measurable and create suitable framework conditions. With its research on digitalisation, ZEW helps actors from business and politics to make decisions based on scientific evidence.

Irene Bertschek
ZEW expert

Prof. Dr. Irene Bertschek

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The COVID-19 crisis has been a boost to digitalisation and made us aware of already existing digitalisation deficits. At the same time, it has proven its stabilising effect in crises. Now we need to exploit its potential for change, for innovation and for a sustainable transformation. Because that will ultimately be the stabiliser in the next crisis.

ZEW Expert Irene Bertschek on Digitalisation Research at ZEW

The Digitalisation of the Economy – Research at ZEW

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It is difficult to imagine the world without digitalisation: ZEW expert Irene Bertschek talks about our research on digitalisation at ZEW

Digital Technologies and Their Use in the Economy

Information and communication technologies (ICT) are important drivers of digitalisation in Germany. The ICT sector not only provides digital solutions for companies, the public sector and private households, but it is often a forerunner in the use of new hardware products and IT services. This makes the ICT sector an object of continuous research.


Using the Short-Term Push Towards Digitalisation for Long-Term Investments

The coronavirus has hit the world economy hard, with the lockdown having paralysed public life for weeks in many countries. But even with the lockdown easing up, hygiene and distance regulations still make it difficult to work together, shop, and use business services. Irene Bertschek explains what role the digitalisation of companies plays in their resilience to the crisis, and how different industries can react to the markedly changed conditions.

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New Index Reveals Major Differences in the Degree of Digitalisation in the German Economy

There are significant differences in the degree of digitalisation in the German economy. This becomes clearly apparent when looking at the different economic sectors, company sizes, groups of federal states as well as types of region. Compared to the rest of the economy, the ICT sector leads the way when it comes to digitalisation – and by a wide margin: With a total of 273.0 index points, the ICT sector is far above the standardised industry average of 100 points. The sector ‘other production industries’ (55.6 index points) shows the worst performance in terms of digitalisation, followed by the tourism industry (64.4 index points) and other manufacturing industries (66.7 index points).

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Economic Sentiment Falls to Historic Low

The economic sentiment in the information and communication technology sector (ICT) in Germany further deteriorated in the second quarter of 2020: The ZEW sentiment indicator for the German ICT sector decreased by 3.5 points compared to the first quarter of 2020, falling to a historic low of 47.6 points. This marks the first time that the ZEW sentiment indicator has dropped below the critical 50-point mark since the survey began in 2011, indicating a negative development of the business situation. In addition to reporting negative expectations regarding turnover and demand for business products, firms in the ICT sector are also pessimistic about imminent personnel changes.

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Digital World of Work

The digital transformation is changing jobs and tasks at an unprecedented speed. Digitalisation permeates almost all areas of the world of work today. The extent to which human work will be replaced by technology is rated differently. It is clear that a great demand for advanced training and retraining emerges which workers and companies will have to face. The pressure to adapt is thereby particularly high for low-skilled workers.

Questions & Answers

How Will We Work in the Digitised World of the Future?

The digitisation of work has become one of the watchwords of the 21st century. As companies and markets keep up with rapid advances in the digital economy to stay competitive, sceptics fear that the automatization of labour will lead to massive job cuts. The ZEW labour market economist Melanie Arntz discusses what this means for workers and businesses in German and in Europe in general.


Technological Transformation Causes Divide in German Labour Market

Although digitalisation and automation will lead to moderate employment growth in Germany until 2021, they are also likely to increase income inequality among employees. Contrary to widespread public perception, technological change creates more jobs than it destroys. What is of central importance, however, is not so much the number of jobs affected as the structural change in the labour market, which is taking place as digitalisation and automation progresses.

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Digitalisation and the Future of Work: Jobs at Risk?

Our Lunch Debate focused on the way digitalisation affects labour markets as well.

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Data and Platform Economy

The big US internet giants Apple, Google, Amazon, Facebook and Microsoft have become a symbol of the platform economy, which is characterised by network effects and monopolistic structures. In many areas, digital platforms take over the role of intermediaries. Hotel booking platforms arrange hotel rooms, while digital labour markets match the demand for labour with corresponding offers. A key factor for the platform economy is data. Data is the basis for developing new services and smartphone apps, while often being traded as a currency in the online world. But data is not only important for platform operators and app developers. Also for many companies in traditional industries the analysis of large, unstructured databases from different sources has become an important strategic tool for the efficient design of processes and the development of innovations.


High Time for a Sustainable Data Strategy

The German government has presented a first draft of its data strategy, which is being discussed today in the Cabinet Committee on Digitalisation. One of the goals of the strategy is to secure access to data and improve their availability. Professor Irene Bertschek, head of ZEW’s Research Department “Digital Economy”, comments on this matter.

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Questions & Answers

Pretty Much Every Other Mainstream App Collects More Sensitive User Data

According to information provided by the Robert Koch Institute (RKI), the coronavirus contact-tracing app has been downloaded more than 18 million times. In light of the rise in infection rates, there is hope that the app will facilitate the tracking of chains of infection in the cold winter months ahead and that it will help to control outbreaks of the virus. In the following interview, Dr. Dominik Rehse, head of the Junior Research Group “Digital Market Design”, speaks about how the app has performed up until now and what is needed in order for it to be effective in protecting individuals from infection.

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Financial Market Experts: Digital Currencies Without Strict Supervision Dangerous

Introducing and issuing digital currencies such as Libra, as planned by Facebook, or Bitcoin without strict legal requirements is viewed critically by most financial market experts: around 88 per cent believe that the use of digital currencies without close regulatory supervision poses a threat to financial stability. This is the result of a special question featured in the most recent ZEW Financial Market Survey conducted with 193 financial market experts.

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ZEW President

Achim Wambach

The creation of a framework for digitisation that promotes competition and is oriented towards people’s welfare must be given the highest priority.