ICT-sector in Germany

Abstract

The term industry 4.0 describes an industrial-political vision and is conceptually based on past industrial revolutionary processes. With the application of new technologies, far-reaching structural changes have taken place in industry, production and economic processes, and work culture. Today, without automation and digitization, it is impossible to gain a competitive advantage in the current market situation, and especially not in the telecommunications sector. Technological progress enables the use of methods and processes in the field of information technology and telecommunications (ICT) that reduce production costs and negative effects on the environment. Nowadays technology companies are looking to invest in the communities in which they operate—from the supply of ICT products and services to the broader goals of enabling mobile and fiber broadband for all and enabling digital inclusion. The locations of these technology companies are largely located in Germany and they have contributed to growth of the country and were the engines of the economy during the last decade. However, Europe's leading national economies has come under multiple pressures: the rapid rise in energy prices is fueling inflation, bottlenecks in supply chains are a serious challenge for industry, and the effects of the war in Ukraine further aggravate all of this. Many factors has recently contributed to the significant slowdown in productivity in Germany due to the achievements of digitalization. It was concluded that the fixed and mobile markets play a key role in the ICT sector of Germany, accounting for 67%. Nevertheless, the turnover of multinational telecom companies is on a declining trend, and the number of people employed in the sector has been steadily declining since 2007. The labor shortage in the IT sector reached unprecedented levels. According to forecasts, up to 26,000 IT professionals will be in a shortage at the market by 2023, which is a huge gap between supply and demand. The author aims to point out the reason why, despite huge digitization efforts and industry 4.0 gains, productivity growth in the German economy has slowed significantly.