Digital pioneers in Germany: University cities beat metropolises

University cities and metropolises like Munich and Frankfurt are Germany's largest hubs for digitally advanced companies. This is according to the Digital Pioneers Index, created by the consulting arm of the Institute of the German Economy (IW), which is close to the business community. Heidelberg leads with an 8.1 percent share of digital pioneers among its local companies. This is followed by the district of Munich with 8 percent, Frankfurt in third place with 7.8 percent, and the city of Munich with 7.6 percent.

Metropolitan areas and their neighboring districts primarily offer the advantage of being an attractive location for startups in the digital sector. In cities like Munich or Berlin, these young companies appear more than four times as often as the national average, according to IW researchers. Recently, however, Berlin has lost its position as Germany's top startup location.

Universities as drivers of innovation

University cities such as Karlsruhe (7.1 percent), Darmstadt (7 percent), and Bonn (6.4 percent) perform particularly well in the ranking and are significantly ahead of major cities like Berlin (5.8 percent), Hamburg (5.7 percent), and Cologne (5.5 percent). According to IW, the density of digital pioneers is not solely attributable to individual companies but is also significantly shaped by institutions that provide knowledge, infrastructure, and networks. Universities and research institutions are important drivers of innovation here.

The IW determined a DVI value of 3.8 percent for the national average. Low-density, rural areas, in particular, are significantly below this with 2.4 percent. The low values are particularly pronounced in the rural regions of East Germany, with an average of 2 percent. Districts like Vorpommern-Rügen or Spree-Neiße mark the lower end with a value of 1.3 percent.

For their index, the researchers methodically used the web presences of around 2.5 million companies – according to the data, this covered all German companies with a website. Using a semantic model, the websites were searched for word clouds with over 200 unique terms indicating the use of advanced digital technologies. If terms from at least two word clouds are found, this is sufficient for classification as a digital pioneer company, where technologies are an integral part of the products or business model. The index is statistically highly significantly correlated with survey results on corporate digitalization and with regional digitalization indicators, such as digital startup or patent density, AI automation potential, or broadband availability.

(axk)