Digital companies are pulling away from the competition

ChatGPT causes discussion in three quarters of companies
72 percent attribute great importance to AI for competitiveness, but only 15 percent use it
Slight majority of companies want to increase digital investments
Bitkom President Wintergerst: "Make the 2020s a digital decade!"

Berlin, 22 June 2023 - Germany's companies are increasingly concerned about losing out to their digital competitors. A clear majority (60 percent) of companies currently foresee competitors that have relied on digitalisation at an early stage. This is a peak value. A year ago, only 52 percent of companies saw their digital competitors pulling away, five years ago it was only 37 percent. Two-thirds (64 percent) currently consider their own company to be a latecomer to digitalisation, while one-third (35 percent) see themselves as pioneers. These are the results of a representative survey of 602 companies with 20 or more employees in Germany commissioned by Bitkom.

87 percent are convinced that the use of digital technologies plays a decisive role in the competitiveness of the German economy, while at the same time 76 percent complain that German companies use digital technologies too little. This is also evident in the current top topic of artificial intelligence. Around three quarters (72 percent) assume that AI is of great importance for the future competitiveness of the German economy, but only 15 percent use AI in their own companies. At the same time, ChatGPT and generative AI have influenced the internal company discussion on the use of artificial intelligence in 7 out of 10 companies (71 percent). "Companies have recognised the importance of digitalisation for their own future. However, they apparently do not know how to approach digitalisation. For each individual company, as well as for the German economy as a whole, the motto must be: make the 2020s the digital decade!", demands the new Bitkom President Dr Ralf Wintergerst on the occasion of the presentation of the study. "In the past, Germany was the land of poets and thinkers. In the future, Germany must be the land of poets, thinkers and digitalisers."

As great as the unanimity is in the assessment of digitalisation as a whole, opinions differ widely when it comes to artificial intelligence. 54 percent are certain that AI will fundamentally change the economy and society, but 44 percent do not see such a development. 49 percent assume that companies that use AI early on will gain a competitive advantage as a result - but 44 percent do not believe this. "Arguably, there has never been a period where so many new technologies have been deployed so rapidly. AI creates text, images and music. It creates programme code, develops medicines or constructs machines. Anyone and everyone can try out the fields of application of AI for themselves; almost every day we read and hear about new, spectacular developments," says Wintergerst. "Getting started with AI is becoming easier and easier. From craft businesses to billion-dollar corporations: sensible application scenarios for AI exist everywhere, without exception."

Nevertheless, many companies are currently rather cautious about the opportunities for AI applications in their own companies. Almost a third (32 per cent) even see AI as more of a risk than an opportunity for their own company. 45 per cent say that costs can be saved with AI. 41 percent believe that AI can at least partially close the existing skills gap. A good one in four companies (26 per cent) sees AI as an opportunity to develop entirely new business models.

Too many companies want to put AI deployment on the back burner

Companies that have not used AI so far do not want to change this any time soon. 16 percent think that AI will never be relevant for them, 25 percent expect to use AI only in more than 20 years, 29 percent expect it to be used in a rather distant future in 10 to 20 years. In contrast, only 1 percent plan to introduce AI in the coming year, 3 percent in 1 to 2 years, 11 percent in 2 to 3 years and 3 percent in 3 to 5 years. 8 percent expect it in 5 to 10 years. Wintergerst: "The image of AI should change in the coming months. AI can trigger an enormous boost in innovation and efficiency. The more AI applications come on the market, the more companies should and - this is my hope - will take advantage of it."

Yet AI is not the only technology where there is a discrepancy between its perceived importance for overall competitiveness and its use in one's own company. For example, 92 per cent of companies consider data analysis and big data to be very important, but only 39 per cent use them. Robotics is considered important by 86 percent, but only 40 percent use the technology. The picture is similar for the Internet of Things (84 per cent major importance, 36 per cent use), 5G (82 per cent to 23 per cent), autonomous vehicles (76 per cent to 17 per cent), 3D printing (74 per cent to 23 per cent) and virtual and augmented reality (67 per cent to 24 per cent). And the use of newer technologies is even rarer: for example, just 4 percent use blockchain technology, although 67 percent attribute great importance to it. And practically no companies use metaverse technologies themselves (1 percent), although 36 percent attribute great importance to them. "We need to position Germany outstandingly well in the digital economy. We need more courage to go digital, also in companies," says Wintergerst.

The companies play the ball back and see obstacles to the use of new technologies not only in themselves, but also in politics and society. For example, 54 percent of the companies have the impression that politics is trying to prevent the use of digital technologies rather than promote them. 52 percent think that the German population is always sceptical about new technologies at first. And 46 percent experience that the risks of digital technologies are discussed in their own companies rather than the opportunities.

Large majority of companies have a digital strategy

At least in some parts of the company, attempts are being made to set the course for digital. Only 11 percent of companies still have no digital strategy at all. A year ago, this was still the case for 13 percent, and in 2019 for as many as 26 percent. At the same time, 55 percent currently have a digital strategy in at least one or more business areas, and 32 percent have a company-wide strategy. "Many companies obviously initially introduce a partial strategy for digitalisation, but stop there, so that there is no digital strategy positioning for the company as a whole. It would make sense for virtually all companies to develop a digital vision and overall strategy," says Wintergerst.

A slight majority of companies in Germany (53 percent) also want to invest more in their own digitalisation in the current year than they did in 2022. 30 percent want to keep investments constant - and 16 percent are planning cuts. For 2024, 28 percent are planning higher spending and 23 percent lower. Around half (46 percent) want to keep investments stable at the current level. Wintergerst: "Digitisation is worthwhile, but it does not come for free. Most companies have recognised that.

The biggest obstacle to digitalisation from a company's point of view is data protection, which 77 percent feel is hindering their digital transformation. A year ago, it was 71 percent. The shortage of skilled workers (64 percent; 2022: 55 percent) is also becoming more acute. These are followed by the requirements for technical IT security, a lack of time and a lack of financial resources, each with 54 percent - although scarce resources are cited significantly more often as a reason than in 2022 with 43 percent. One third (32 percent) complain about lengthy internal decision-making processes (2022: 24 percent). In contrast, a lack of willingness on the part of the workforce (12 percent) and uncertainties about the economic benefits of digitisation (5 percent) are not widespread obstacles. "I would like to see more German speed not only in the digitisation of administrations, but also in the digitisation of companies. The past years have shown how quickly we can act in Germany when a crisis requires it. We can speed, now we want to show that this also applies to digitalisation," says Wintergerst.