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Digitization

Digitization is penetrating all areas of life and networking people, machines and processes. This is creating immense opportunities for the German economy.

About the topic

In Germany, it has triggered a profound structural change in all areas of the economy and society. This digital transformation holds enormous opportunities, and they must be exploited - including, but not limited to, the automation and networking of value creation processes under the buzzword Industry 4.0. Autonomization in particular, i.e. enabling machines to organize, repair and optimize themselves, opens up extensive opportunities.

The prerequisites for digital transformation are nationwide high-speed networks and an unbureaucratic and capital-rich innovation environment. Employees also face challenges: Companies must identify the new requirements for employee qualifications and train employees accordingly. In addition, companies, especially from the SME sector, must drive digitization more strongly in their own operations, for example by refining their business models and developing new ones, for example in cooperation with startups. On this page you will find various topics and current studies from the field of digitization.

German Economic Institute (IW) German Economic Institute (IW)

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AI skills demand in the EU
Expertise 8. September 2026 Jan Büchel / Jan Engler / Armin Mertens

AI skills demand in the EU

More and more companies in Europe are using artificial intelligence (AI) technologies. In 2025, one in five companies in the EU with 10 employees or more used at least one major AI technology, up from 8% in 2023 (Eurostat, 2026a).

Jan Büchel / Jan Engler / Armin Mertens IW

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AI Specialists in Public Administration – Needs and Options for Action
IW-Trends No. 2 15. July 2026 Jan Büchel / Jan Felix Engler / Nicolai Krüger*

AI Specialists in Public Administration – Needs and Options for Action

The use of AI in Germany’s public sector not only offers potential for efficiency gains but, in view of the sector’s shortage of skilled staff, is also urgently needed.

Jan Büchel / Jan Felix Engler / Nicolai Krüger* IW

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In Brief #4: AI Competitiveness – Structural challenges of the EU
Expertise 21. April 2026 Jan Büchel

In Brief #4: AI Competitiveness – Structural challenges of the EU

The EU aims to be competitive in the field of AI in comparison to the US and China as its main global competitors.

Jan Büchel IW

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A Behavioral Ethics Perspective
IW-Policy Paper No. 12 6. November 2025 Barbara Engels / Jennifer Potthoff

Social Media, Markets and Minors: A Behavioral Ethics Perspective

Social media has become a central infrastructure of adolescence, offering benefits such as social connection, informal learning, creative expression, and low-cost entrepreneurial opportunities, while simultaneously posing risks including depression, body image concerns, and opaque commercial persuasion.

Barbara Engels / Jennifer Potthoff IW

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Barbara Engels

Senior Economist for Sustainable Digitalisation and AI

Tel: +49 221 4981-703 Barbara Engels @BarEngels
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Senior Economist for Artificial Intelligence and Data Regulation

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Critical Choices: How Malaysia and Germany can Navigate Shifting Energy Geostrategy
External Publication 26. October 2026

Critical Choices: How Malaysia and Germany can Navigate Shifting Energy Geostrategy

Stewart Nixon* / Malte Küper in Policy Ideas

Malaysia and Germany, as constructive and reliable participants in globally interdependent energy (as well as trade and financial) markets, face an increasingly hostile, volatile, and uncertain environment surrounding energy choices.

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Fiscal Effects of Having Children
IW-Report No. 43 15. October 2026

Fiscal Effects of Having Children

Wido Geis-Thöne

The fiscal effects of children are relevant to various areas of policymaking.

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Event 14. October 2026 Alexander Radunz

Expert Workshop on the Industrial Accelerator Act

The German Economic Institute (IW) and Frontier Economics are pleased to invite you to a rapporteur & stakeholder workshop on the Industrial Accelerator Act (IAA) in Brussels.

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Universal entitlement, unequal provision: childcare in segregated German cities
External Publication 13. October 2026

Universal entitlement, unequal provision: childcare in segregated German cities

Matthias Diermeier / Jan Engler* / Melinda Fremerey / Leon Wansleben* in Journal of Social Policy

One mechanism driving persistent inequalities in childcare provision, despite rising investments and a substantial expansion of childcare facilities, may consist in the locational choices of providers, who eschew poorer neighbourhoods.

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A Comparison of Public Revenues Across the Federal States
IW-Report No. 41 12. October 2026

A Comparison of Public Revenues Across the Federal States

Björn Kauder

To ensure equivalent living conditions, the federal government influences the revenues of the states and municipalities. Under the fiscal equalization system, financially weak states receive surpluses in the distribution of sales tax revenues, while financially strong states must accept shortfalls.

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German Foreign Investment and the debate over Germany as a business location
IW-Report No. 39 6. October 2026

German Foreign Investment and the debate over Germany as a business location

Samina Sultan / Jürgen Matthes

Geopolitical pressure and the debate over Germany’s competitiveness make it necessary to develop a more precise understanding of German foreign direct investment. This report provides a comprehensive empirical analysis and also examines the implications for Germany as a business location.

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The Honesty-Attitude-Behavior Gap: A Cross-Country Comparison
IW-Trends No. 3 29. September 2026

The Honesty-Attitude-Behavior Gap: A Cross-Country Comparison

Dominik Enste / Jennifer Potthoff / Augustin Renz

Honesty reduces transaction costs and is therefore a prerequisite for effective economic cooperation.

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Event 28. September 2026 Sandra Parthie / Alexander Radunz

Online-Veranstaltungsreihe „Von Brüssel nach Berlin”: Regionalentwicklung und Industriepolitik

Wir laden Sie herzlich zu einer weiteren Online-Veranstaltung unserer Veranstaltungsreihe „Von Brüssel nach Berlin“ ein. Mit ihr wollen wir in loser Folge Themen aus der europäischen in die deutsche Hauptstadt tragen.

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Complementary Capabilities for Circular Practices: Firm-Level Evidence in Germany on the Role of Digitalization and Innovation
External Publication 16. September 2026

Complementary Capabilities for Circular Practices: Firm-Level Evidence in Germany on the Role of Digitalization and Innovation

Sarah Lichtenthäler / Adriana Neligan in Journal of Circular Economy

The transition to a circular economy (CE) requires firms to reconfigure business models, processes and capabilities.

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Making Apprenticeships a Success: From Marketing to Hiring
IW-Report No. 38 11. September 2026

Making Apprenticeships a Success: From Marketing to Hiring

Paula Risius / Dirk Werner / Philip Herzer / Fritz Orange / Regina Flake / Franziska Arndt / Yasin Küçükyavuz / Edgar Schmitz

In-company vocational training is a key factor in securing skilled labour. The first step in investing in future employees is to approach and recruit new apprentices. For many companies, filling the apprenticeship positions they offer is a challenge.

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