Forecast for the German digital economy: The "ray of hope in difficult times"

According to the industry association Bitkom, 2025 offers rosy prospects for the digital economy in Germany. Turnover in the IT and telecommunications market is expected to grow by 4.6% to 232.8 billion euros. According to Bitkom, the number of employees in the ICT sector is set to rise by around 20,000 to 1.371 million in the course of 2025, compared to 9,000 new jobs in the previous year.

Bitkom President Ralf Wintergerst spoke of a “ray of hope in difficult times” and emphasized that the ICT sector has now become Germany's largest industrial employer. 87 percent of jobs are said to be in the software sector.

Broken down into individual sectors, Bitkom sees significant growth in the software market, among others, which is expected to grow strongly once again with an increase of 9.8% to 51.1 billion euros. The still small market for AI platforms in particular is expected to boom, with rapid growth of 43% to EUR 2.3 billion. Collaboration tools (+12% to EUR 1.4 billion) and security software (+11% to EUR 5.1 billion) are also expected to see double-digit growth.

For cloud services, Bitkom is forecasting an increase in turnover from EUR 17 billion to EUR 20 billion. The IT services segment as a whole is not expected to grow quite as strongly at 5%, reaching a turnover of 53.8 billion euros.

Infrastructure as a service booming, consumer electronics suffering

In the market for IT hardware, the industry association sees at least single-digit growth in almost all segments. In 2025, hardware sales are expected to increase by 3.3% to 53.7 billion euros. The biggest growth driver will once again be the Infrastructure-as-Service segment, i.e., rented servers, network, and storage capacities. A strong increase of 24.4 percent to 6.2 billion euros is expected. Only in the consumer electronics segment is there expected to be a drop of 7.5% to EUR 7.2 billion, due to private households' reluctance to buy in times of economic uncertainty.

The telecommunications market is expected to be quieter, with Bitkom forecasting a 1.8% increase in turnover to EUR 74.3 billion in 2025. The largest share of this is expected to come from the telecommunications services business, which will account for 53.5 billion euros (+1.4%). Investments in telecommunications infrastructure are expected to increase by 3.5% to EUR 8.0 billion.

As far as investments in the ICT sector are concerned, Bitkom estimates that the clear majority (59%) will maintain their level of expenditure. 17% wanted to increase spending, while almost a fifth (23%) wanted to put the brakes on. Investments will be made primarily in software and research and development. The forecast is not without its drawbacks, however: Bitkom points out that not all companies will benefit from the expected market growth. Small and medium-sized companies in particular could get less of the cake.

Germany at the bottom of the growth league?

From a global perspective, the rosy prospects seem a little weak – Germany's ICT market is bringing up the rear in the statistics with growth of 4.6%. India leads the way with 8 percent, followed by the USA with 7.3 percent and the EU excluding Germany with 7.1 percent. The USA is by far the largest ICT market, with 38.8% of the market volume. Germany is on a par with the UK with 4.1%. Global turnover in the ICT sector is expected to increase by 6.6% to 5.2 trillion euros in 2025.

According to Bitkom, however, the success of the German ICT sector also depends on the right political framework conditions. “Politicians should do everything possible to increase the pace of growth,” said Bitkom President Wintergerst. Germany needs a “re-start” after the Bundestag elections. Among other things, he called for less bureaucracy, for example in the form of the abolition of the Supply Chain Obligations Act, more investment and a digital ministry with real powers.

(axk)