Study on the Use of AI in Companies in Germany
Almost six per cent of all companies in Germany used artificial intelligence (AI) in 2019. These companies spent around 4.8 billion euros in the field of AI and employed 139,000 people who either fully or partially carried out AI activities. However, there is a lack of qualified personnel: almost one in two vacant AI positions could only be filled inadequately or not at all last year. These are the results of a study by ZEW Mannheim on behalf of the Federal Ministry for Economic Affairs and Energy.
The study provides an up-to-date overview of the use of AI in firms in Germany and draws on ZEW’s long-standing expertise in monitoring and analysing the diffusion of AI in the German economy. The data have been collected through a representative follow-up survey of AI-using companies as part of the regular German Innovation Survey. The follow-up survey was conducted between November 2019 and January 2020.
In 2019, around 17,500 companies in the German economy used artificial intelligence for their products, services, or internal processes. This corresponds to 5.8 per cent of all companies. AI was mainly used in the manufacturing industry and in business-related services. Out of all companies in Germany, 4.4 per cent already used AI for their products and services, generating a turnover of almost 60 billion euros in 2019. This corresponds to 7.7 per cent of the turnover of all companies deploying AI.
Use of AI in German companies is increasing
The fact that the market for AI technologies has a promising future is also reflected in investments made in AI: In 2019, companies’ expenditures for the development, implementation and maintenance of AI amounted to approximately 4.8 billion euros, with around 75 per cent of AI expenditure being internal running costs, in particular for staff working with AI.
The considerable share of personnel costs in companies’ AI expenditure is due to the fact that the number of AI specialists working in the German economy has increased. “Last year, around 139,000 people in companies using AI worked mainly or at least part of their time in the development, implementation or maintenance of AI procedures. Of these, some 50,000 people worked mainly on AI projects, while another 89,000 people devoted at least part of their working hours to AI activities,” explains Dr. Christian Rammer, deputy head of ZEW’ Research Department “Economics of Innovation and Industrial Dynamics” and co-author of the study. The share of employees involved in AI activities is highest in the ICT sector with four per cent of total employees in the sector, followed by business-related services with 2.7 per cent. In the other sectors, the proportion of employees working on AI is significantly lower.
Rising demand for staff reveals lack of AI specialists
However, the need for qualified staff in the AI sector is far from being met, with about one third of the companies having been seeking to fill additional vacancies in 2019. Of the 22,500 AI job openings, only just under 50 per cent could be filled as planned by the companies. Eleven per cent of the positions could either not be filled with a desired candidate or only after a longer time period, while 43 per cent remained vacant. “The high ratio of vacancies to the number of employees mainly working with AI is evidence of the rapid expansion of AI in Germany,” says Professor Irene Bertschek, head of ZEW’s Research Department “Digital Economy”. “Companies can only make use of AI as long as there is enough qualified staff for it. If the necessary expertise and skills are not available, AI projects may already come to a standstill in the early stages.”
The survey among companies using AI shows that the skill that is in particularly high demand among companies in the field of AI is knowledge of software programming. 70 per cent of the companies with AI job openings described this skill as very important, another 26 per cent as important and only one per cent as not important. An additional 75 per cent of the companies with vacant AI positions considered knowledge of database management and mathematics to be crucial skills.
Increasing importance of AI for business activities
Of the companies included in the study that used AI in 2019, one in three had already been working with artificial intelligence for at least five years. However, 27 per cent of companies active in AI are newcomers to the field, i.e. they did not start using the technology until 2018 or 2019. Both the increasing interest and the dynamic development of AI is also reflected in the business models of German companies. The role of AI in business activities is already considered important by most companies using AI. Artificial intelligence makes their business processes faster, more accurate, more flexible, more reliable, and more cost-effective, and/or it increases their capacity. Twelve per cent of companies even stated that the use of AI is essential for their business activities.