Innovation Index
Germany 2023

The expansion of the internet supply network provided additional economic growth of over 5 billion euros between 2013 and 2020. The network expansion project lays the foundation for a long-term increase in value added and prosperity in Germany. In addition, an efficient network enables more flexible reaction to crises.

On behalf of the Vodafone Institute for Society and Communications, Prognos analysed whether and to what extent network expansion has strengthened Germany’s innovative power and economic performance and the regions where this has been particularly notable. The result: the Innovation Index Germany IID.2023.

Innovation Index 2023 affirms the positive effects of network expansion

The Innovation Index 2023 confirms the positive effects of the network expansion on the German economy and its innovation strength. The calculations are based on network expansion data from the years 2010 to 2021. The impacts of network expansion have a delayed effect on the respective indicators.

Here are the most significant findings:

Regions across the whole of Germany have benefitted from network expansion

• All regions in Germany have benefitted from network expansion.
• Due to their better initial conditions, large cities are best able to make use of the digital impetus with an average 10% higher effect there than elsewhere.
• Rural regions benefit in comparison with medium-sized towns or cities, above all, in terms of wages and business registrations.
• Bavaria leads the Innovation Index occupying 42 out of the top 100 districts.
• The winners of the network expansion endeavour, alongside Dresden, Munich, Hamburg, Berlin, and Frankfurt are city districts such as Erlangen, Wolfsburg, Regensburg, and Ingolstadt.

Network expansion as reliable economic support

• More than 5.3 billion euros additional GDP per year can be traced back to the network expansion.
• Since 2013 the expansion of the network has contributed to around 42 billion euros additional value added.
• That represents almost 7% of the value-added growth in the German economy as a whole between 2013 and 2020.
• Particularly in times where growth is weak network expansion offers a reliable economic boost.

Network expansion driven digitalisation secures Germany 130 billion euros during the pandemic

• At the beginning of the covid pandemic, companies that were already digitalised were able to make the switch to working from home and online trade more rapidly and could thus avoid interruptions to trading.
• Digitalisation allowed potential national economic losses of around 130 billion euros to be avoided.
• In this sense, digitalisation has played as important a role in reducing the consequences of covid as the economic aid provided by the Federal Government.
• The ICT sector and business-related services were able to avoid around 15 billion euros of value-added shortfall between 2020 and 2022.
• Thus, demonstrating network expansion and digitalisation to be cornerstones of a robust and resilient economy.

Importance of digital infrastructure for the economy

The Innovation Index Germany is based on a time and region comparison of the 400 districts and independent cities between 2010 and 2021. Using precise data, the innovation effects of network expansion in Germany are not only presented overall, but also at district level.

Through panel data analysis we estimate the average connection between network expansion and economic, qualification, as well as employment and innovation indicators. Finally, we compared the actual development of an indicator with the development that could have been expected in the absence of network expansion. The result is the respective growth contribution directly attributable to the network expansion.

Already in 2022, on behalf of Vodafone Institute for Society and Communications, Prognos calculated how strong an effect the advancing network expansion really has on the development and stability of the German economy.

The Innovation Index 2023 brings the results up to date with real data and elucidates, in particular, the significance of digital infrastructure for the economic performance capacity of the districts and district-free cities during the covid pandemic.

Links and downloads

To the interactive Innovation Index (in German)

To the study (PDF in German)

Further information, in German (Vodafone Institute website)

Project team: Dr Oliver Ehrentraut, Josh Klier, Dr Georg Klose, Philipp Kreuzer, Dr Andreas Sachs, Jonathan-Aton Talamo

Latest update: 25.1.2024