Towards a Digital Economy by enhancing digital competitiveness [5 Reading Tips]

New data, connectivity, automation and innovative and user-friendly customer interfaces are challenging existing value chains. The perception of time is more important than never. The public demands for a constant immediacy requires a powerful communication infrastructure at B2B and B2C level. Companies must improve their digital maturity in order to recognize new opportunities, develop suitable offerings and get them to market quickly. Digital transformation is indispensable to be competitive and face the challenges of the digital age.

The transformation occurs at implementing gradually more efficient production methods, updating existing business models and applying digital tools and software at the expense of manual processes.

Integration of digital technology

The European Commission is taking seriously this matter and developed a composite index that is called the Digital Economy and Society Index (DESI) with the aim of assessing the development of EU countries towards a digital economy and society. The results of the DESI 2016 indicate that
Germany performs best in the dimension concerning the Integration of Digital Technology by businesses.

Germany scores 0.44, above the EU average and 7th among the European Member States. German enterprises made significant progress in the field of Electronic Information Sharing and are now ranking 1st in Europe (compared to 14th last year) what means that 56% of all companies have already integrated kind of electronic information sharing system.

If companies follow the digital trail, daily activities like sending faxes, printing documents, downloading or copying data onto hard drives or making invoices manually which not only increase costs and the risk of errors, but also makes collaboration processes less efficient, will become a thing of the past. To do so, Germany adopted the “Industry 4.0” programme, which aims at further enhancing the use of digital technologies for business.

Online shopping

There are other indicators showing the strong inclusion of digital habits into our lives as well. Online shopping is a tendency that is gradually becoming a rooted activity, especially between millennials and some innovative businesses.

Over the last year Germans are well above the European average for activities related to online shopping. Actually, 82% of Internet user shopped online in the last year, compared to 65% for the EU28, making Germany the second in the ranking behind United Kingdom (87%).

Moreover, German enterprises increasingly take advantage of the opportunities offered by online commerce: nearly a quarter of Small and Medium-Size Enterprises (SMEs) sell online (24% – above the 16% of the EU average), and those who sell online make less than 9.6% of the share of their turnover from those sales. 9.2% of SME are selling online cross-border, above the European average of 7.5%.

Connectivity

A core point is the digitalization of society at all levels. People and companies cannot buy online or use the cloud if they don’t have access to the internet. An intrinsic thing of their lives for many, it is still a chimera in some local areas and isolated villages.

In this sense, the uptake of fast broadband services in Germany is still below EU average. To turn this around, the German government is planning to provide fast broadband (50 Megabits per second) Internet to all rural and urban areas alike by 2018.

In a nutshell, Germany is on the way to accelerate digital transformation at all levels. However, it still remains much to be done to have a true digital economy. Businesses should be aware of taking full advantage of the possibilities and benefits offered by digital technologies and act towards efficiency and productivity.