- The Internet industry is gaining in importance in the overall economy: Share of GDP will rise from 4.2 per cent in 2019 to around seven per cent in 2025
- Total revenue of the Internet industry will rise by almost 75 percent to around 253 billion euros by 2025
- In 2025, more than half a million people will be employed in the Internet industry
- At 10.3 per cent per year, the e-commerce segment has the greatest growth potential
- Scenarios for Germany in 2030: Digital infrastructures must be expanded rapidly
The Internet industry will be one of the most dynamic industries in Germany in the coming years, as a new joint study by the eco Association and the management consultancy Arthur D. Little shows. In its fourth edition, the study presents concrete figures for the Internet industry from 2020 to 2025. The result: Despite the Covid-19 pandemic, during which individual large segments of the Internet industry suffered slumps, an increase in revenue of almost 75 percent to approximately 253 billion Euro is expected by 2025. At the same time, almost half a million people will be employed in the Internet industry by then. Today, the Internet industry has a 4.2 percent share of the gross domestic product (GDP), and in 2025 it will have a much larger share of 7 percent. Meanwhile, the industry provides more and more jobs: In 2025, more than half a million people will be employed in the Internet industry. The Internet industry is therefore becoming increasingly important for the economy as a whole.
“The next few years are the start of a digital decade of superlatives,” says eco Chair Oliver Süme. “Digitalisation – as not only the pandemic shows – will continue to play an increasingly important role within the German and European economy in the future, and, in the long term, the share of the Internet industry will increase in all sectors This is why a rethinking in companies must take place now at the latest, Süme continued, “From big players to medium-sized companies – from digital infrastructure providers to the smart industry – the Internet industry will play an increasingly important role for the well-being of our society.”
“The current study shows that the Internet industry will continue to establish itself as a growth engine for the overall economy in Germany until 2025. This is partly due to the increased confidence of investors in the market, who proactively identify investments. The ready capital and Covid-19 are more supportive than restrictive for growth,” adds Lars Riegel, partner at Arthur D. Little.
Despite a 1.2 percent decline in sales for the entire industry, the Internet industry is expected to generate sales of around 145 billion Euro in 2020. The strongest beneficiaries here are the e-commerce segment (B2B and B2C) as well as operators of premium portals, classified marketplaces, advertising media, online marketing companies and providers of transaction services: Around 40 percent of the sales volume – 57 billion Euro – will be generated in this area in 2020. In the period 2020 to 2025, an average annual growth potential of 10.3 percent is expected. A further third of the total revenue volume will be generated in 2020 by digital business models in user industries (smart industries) and by the marketing of digital content (paid content).
The study also presents possible scenarios for the digital infrastructure for the following decade from 2030. With the increasing market penetration of video conferencing, augmented reality, cloud gaming, 4K streaming, video-based online advertising and other data-intensive applications, latency and bandwidth requirements will grow exponentially. In order to be able to cope with this amount of data, the Association of the Internet Industry advocates massively accelerating the expansion of digital infrastructures now in advance.
A demand that is also supported by Prof. Andreas Pinkwart, Minister for Economic Affairs, Innovation, Digitization and Energy of the German state of North Rhine-Westphalia: “The Corona crisis shows: Digital pioneers are benefiting from their early transformation. This is why we want to push ahead with the expansion of infrastructures and digital education in North Rhine-Westphalia and why we want to consistently pursue the path of digitalisation in the economy, society and public administration.”
As the new study shows, by 2030 it is expected that around 33 million German households will already have a broadband connection. The eco Association and Arthur D. Little have been analysing the developments of the Internet industry in Germany since 2008. The previous study from 2015 predicted the size of the growth of the Internet industry in 2019 with an accuracy of 95.5 percent. This fourth edition of the joint study is supported by Huawei, Leaseweb Deutschland GmbH and toplink GmbH.