A damper on digitization

World situation slows down digital transformation of the economy

Supply chain disruption, rising energy costs and accelerating inflation threaten to put a damper on digitization in the German economy. In 94 percent of companies, for example, digitization has become more important as a result of the pandemic, but 95 percent expect disruptions in supply chains to now put the brakes on digitization. 92 percent have this concern due to the high inflation rate, 78 percent due to rising energy costs and 57 percent due to the Russian attack on Ukraine.

At the same time, two-thirds expect digital business models to be of very great importance or even decisive for their own economic success in five years' time. These are the findings of a representative survey of 604 companies with 20 or more employees in Germany. "Digitization is the best means of resilience and resistance to crises of all kinds. We must make every effort to ensure that the digitization progress made in the pandemic does not fizzle out now, but is followed up and strengthened."says Bitkom President Achim Berg.

In the past, many companies have encountered unexpected difficulties with digitization. Nine out of ten respondents state this. At the same time, 61 percent are convinced: digitization has made our company more competitive. And 51 percent state that digitization has made them more attractive as an employer. "Digitization is not a foregone conclusion and cannot be just thrown up from the sleeve. Digitization requires strategy, expertise and resources. In addition to investments in hardware and software, digitization also requires relevant expertise at all levels and a willingness to restructure processes and, not infrequently, also to evolve the corporate culture., says Berg. "If implemented wisely, digitization makes companies more efficient, faster and more competitive - and gives them an advantage in attracting new customers.n talents."

Almost all companies have digitized their offerings in the past five years. Ten percent say they have launched new digital products, seven percent have replaced existing products with digital ones and 14 percent have supplemented them with digital ones. One-third have added new digital services to their offerings, 56 percent have supplemented existing services with digital and ten percent have replaced existing services with digital. The vast majority of companies believe that digital business models will become more important for their own economic success.

One in four say it will be rather important in five years' time, 38 percent assume it will be very important, and 31 percent even expect digitization to be crucial to their business success. Only three percent assign it a low level of importance. "It's not enough to do anything with digital. It's about aligning your own company's business model very specifically with the digital world.", says Berg.

A large majority of companies would like to see politicians speed up approval procedures and remove legal hurdles to the expansion of gigabit networks. With a view to greater digital sovereignty, subsidies should be more strongly concentrated and flow to where they have the greatest effect, instead of being distributed with a watering can. Mountain: "Politicians have many digital construction sites and these must be dealt with as quickly as possible with the announced digital strategy."