The Internet economy is growing despite the war in Ukraine –

The German digital industry has continued to grow despite Russia’s war in Ukraine, although uncertainty in the industry and among customers remains high, according to a recent report by the eco-digital association.

The report, released on Tuesday (May 10th) by environmental and international consultant Arthur D, looked at the potential impact of the war in Ukraine on Germany’s Internet economy.

Compared to other sectors, the impact on the digital industry has proven to be limited, despite continued inflation and sectoral self-restraint, the report says. The negative effects of the sanctions are outweighed by the price increase, the report adds.

“The Internet industry is a reliable partner in the crisis”echo director Oliver Süme told a news conference on Tuesday, adding that the policy should help reduce uncertainty in the market.

According to eco, it would be desirable to design a fast and reliable transatlantic agreement on data protection or take steps to strengthen digital sovereignty and energy independence.

Greens’ digital policy spokesman for the German Bundestag, Maik Außendorf, told EURACTIV that “In politics we face the challenge of creating the framework conditions to ensure the expected growth, while guaranteeing German SMEs a high level of computer security”.

Growth forecasts

According to the report, analysts predict steady growth in the Internet economy until 2025, with a healthy average annual growth of 12.2%. This would mean an increase in turnover of 258 billion euros.

However, as demand could stagnate in some areas or the crisis could cause consumers to cut back on non-essential spending, a mid-term correction phase is expected from 2023, according to the report.

The report also states that the shift to working from home during the pandemic has already led to an increase in sales to the Internet economy, as a significant increase in demand for services has been noticed in many areas.

Ongoing inflation and the war in Ukraine are now driving up price increases and are therefore prolonging the trend of revenue growth, at least in the short term. But eco noted that interest rates, energy and production costs are also rising in some cases, which means that increased sales should not translate into higher profitability.

An earlier report by the digital association Bitkom drew a bleak picture of the future of the digital industry in Germany, where assessments of the situation and business expectations had deteriorated since the Russian invasion.

Is “A small consolation that the business environment in the digital industry is still much better than in the economy in general”said Achim Berg, president of Bitkom, in a press release.

A digital fashion industry

This context of crisis “Don’t leave our industry unscathed”said Mr. Sum of echo. “However, we continue to see growth trends in all areas, which shows that digitalisation is not a short-term trend, but we must continue to invest in the sustainable digital transition of the economy and society.” .said Mr. Süme.

Mr. Außendorf, a member of the Green Party, also stressed that the Internet economy is a powerful engine for the German economy, even in times of crisis.

However, according to Mr. Außendorf, in addition to the conversion of the power supply, was also necessary “Radically challenge the previous computer security policy and implement various (immediate) measures to increase computer security as quickly as possible. »

According to the report, the industry with the highest growth rate is “services and applications”especially because cybersecurity services are expected to be in high demand in the near future.

The increase in war-related attacks entails “a greater desire to spend more on cybersecurity products”. It is also a great opportunity for local solution providers.

While a massive cyber war against German companies, uncertainty and risk is unlikely “Stay high and you should anticipate the future with more secure and robust IT systems and infrastructures”says the report.

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