The corona pandemic has not only frayed people’s nerves, but has also caused great economic damage. However, digitalization is providing noticeable relief – at least in some industries.
The economic damage in Germany caused by the consequences of the corona pandemic in the years 2020 to 2022 was significantly reduced by increasing digitalization. According to a study by the Vodafone Institute and the economic research company Prognos, online trading, home office and other digitalization measures together have contributed to a similar extent to state aid in preventing a complete collapse of the German economy.
When it comes to the amount of economic damage caused by the pandemic, the study relies on calculations by the Institute for Economic Affairs (IW) in Cologne, according to which value creation in Germany in the years 2020 to 2022 would have been a total of 420 billion euros higher without Corona. The consequences of the war in Ukraine are also taken into account in the IW’s calculation. However, they only play a minor role compared to the pandemic.
The Vodafone Institute and Prognos have, in turn, calculated that the gross domestic product would have been around 130 billion euros lower during this period without the effects of digitalization. “Digitalization therefore contributed just as much to mitigating the consequences of Corona as the federal government’s economic aid,” explained the Vodafone Institute. State aid for companies in the form of grants, loans, recapitalizations and guarantees also totaled 130 billion euros.
Digitalization does not help in all industries
In their calculations, the researchers compared, among other things, developments in different industries that are digitized to varying degrees. In the information and communications technology sector alone, digitalization prevented sales losses of 15 billion euros in the two years.
Companies in the transport or construction sectors, on the other hand, were dependent on carrying out their activities on site. They would therefore have benefited less from digitalization.
Strong economic effects of digitalization were particularly evident in the quarters with particularly restrictive Corona measures. The positive effect was greatest in winter and spring 2021 thanks to home office and e-commerce. With the lifting of most of the measures from summer 2022, the avoided economic damage caused by digitalization has decreased again.
Looking at network expansion
In the “Innovation Index Germany”, the Vodafone Institute and Prognos also measure the regional economic effects of network expansion. The network in Bavaria has been expanded continuously since 2010 and to a greater extent than the German average. It was said that network expansion was being pushed forward across the board, especially in the rural regions of Bavaria.
In addition to the state capitals of Munich and Dresden, the city states of Hamburg and Berlin as well as Frankfurt am Main, urban districts such as Erlangen, Wolfsburg, Regensburg and Ingolstadt have benefited above average from the network expansion. At the bottom of the ranking, in addition to Pforzheim, Münster and Kiel, there are also less densely populated districts in various regions of Germany.
Source: Stern
