Digital sovereignty: economy remains dependent on IT from abroad
There is a lot of talk about digital sovereignty. In practice, however, companies rely on IT providers outside Europe, mostly from the USA.
(Image: Diego Barbieri/ Shutterstock.com)
German companies remain highly dependent on non-European IT suppliers, according to a study by the Leibniz Centre for European Economic Research (ZEW) in Mannheim. According to the study, around 80 percent of the companies surveyed from the information economy and manufacturing industries stated that they felt dependent on non-European suppliers and partners for key digital technologies. This was particularly pronounced in the area of software and applications, with providers from the USA dominating.
According to the survey, 1200 companies from the information industry (ICT sector, media service providers, knowledge-intensive service providers) and the manufacturing industry (chemicals and pharmaceuticals, vehicle construction, mechanical engineering and others) were asked. The survey also revealed differences in how the companies assessed digital sovereignty: A good three quarters of companies in the information economy (78%) and two thirds of manufacturing companies (68%) rated the importance of digital sovereignty as high or very high for the success of the German economy. Only 55% (information economy) and 41% (manufacturing industry) considered it important for the success of their own company. When it comes to the various aspects of digital sovereignty, all companies consider sovereignty over their own data to be the most important.
Superior and without alternative?
The largest area of foreign dependency is found in software and applications, with over a third (36%) in the information economy and 28% in the manufacturing industry. In the case of generative AI, 30 percent in the information economy and 20 percent in manufacturing saw themselves as dependent, and 27 percent and 23 percent respectively for hardware and infrastructure. In the information economy, security technologies (25%) and cloud infrastructures (23%) are also heavily dependent on foreign countries, whereas in the manufacturing sector, this figure is significantly lower.
Most companies cited the lack of European alternatives as the reason why they cannot get away from technology from foreign suppliers. In the information economy, 82 percent cited this, in manufacturing 70 percent. For around three quarters of both sectors, the technical superiority of the non-European supplier was also a decisive factor.
Compared to a similar survey in 2021, lock-in effects, i.e. high technical barriers to switching providers, had also become more important. At 58%, twice as many companies in the information economy as three years ago would have indicated a lock-in with a provider. In the manufacturing industry, 51% would have mentioned this, an increase of 19 percentage points.
(axk)