Digitalization of German SMEs slowed by data protection, security requirements

Although the COVID-19 crisis triggered a digitization surge in German small and medium-sized enterprises (SMEs), a quarter of the country's 3.8 million SMEs were not pursuing any digitization activities, the German state-owned development bank KfW said on Friday.

Around 950,000 companies in Germany were not even taking "basic steps" such as digitizing customer contact, according to the SME Digitalisation Report 2021 released by KfW Research.

The report analyzed the reasons that prevent companies from implementing digitization projects, finding that the most common reason was data protection and data security requirements, closely followed by insufficient digital infrastructure, according to the study. A lack of internal IT skills combined with a lack of availability of external IT specialists ranked third.

"Besides the transition to sustainable economic activity and living, the digital transformation is the second major task facing Germany," said Fritzi Koehler-Geib, chief economist at KfW. "But right now our businesses are only in mid-range compared with other European countries when it comes to the use of digital technology."

To move up to the top ranks in European comparison, it is important to improve digital skills in the workforce through education and training, expanding the digital infrastructure through nationwide internet coverage, and expanding financing options for digitization projects, according to Koehler-Geib. (ANI/Xinhua)

( With inputs from ANI )

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor