German trades

Digitization in the German trades sector picks up speed

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From virtual collaboration to technologies for greater climate protection: Trades companies greatly improved their digitization in 2021. And as a result, the industry’s digitization index rose by two points: to 59 out of a possible 100 making the trades sector one of the digitization winners and putting it exactly in line with the average for German SMEs. This is the result of the industry report for the trades sector in the representative study  „Digitalisierungsindex Mittelstand 2021/2022“ (Digitalization Index for SMEs 2021/2022 – in German). Telekom and the analyst firm techconsult have conducted the survey for the sixth time. 

The industry drove its digitization more strongly than in the previous year and despite Corona: Actually, 30 percent of the companies surveyed generated more revenue than in the year before – an average of 26 percent. According to the ZDH (information in German), these included, for example, painting and varnishing businesses, companies in the field of building construction and civil engineering, as well as bakeries or butchers. Above all, companies offering body-related services suffered from the Corona requirements, but also motor vehicle businesses. 

“Even though the second pandemic year has had a mixed impact on German trades companies, the overall trend is towards more digital products and business models,” says Thomas Spreitzer, responsible for business customer sales at Telekom Deutschland. “In order to become more attractive to customers, 92 percent of craft firms want to invest further in their digitization, be it through digital checkout systems or digital tools to improve internal collaboration. In doing so, they also increase productivity and contribute to the ecological sustainability of the business.”

Investing in remote and multi-site collaboration

Digital solutions have changed the trades. Office activities such as project planning or accounting are being shifted to virtual media: Web and video conferencing solutions (46 percent) and messenger services (44 percent) are in use or about to be. Also, document and file sharing solutions (33 percent) and project management tools (31 percent). By investing in software for better collaboration, device management tools and cloud solutions, companies want to strengthen this trend in 2022. The majority also see a greater need for IT security in their remote workplaces. However, digital technologies should not only improve collaboration, but also make the company more attractive to customers: 68 percent want to continuously expand their existing offering with digital products and business models.

Digitization supports sustainability 

Whether by video conference in the home office or by cell phone chat on the construction site: virtual communication is more climate-friendly. It reduces in-person meetings and thus the amount of travel required by the industry. But the trades have also established other digital solutions for more climate protection, like for resource-saving production of goods (40 percent). In addition, 34 percent are working on digitally optimized and thus low-emission route planning and logistics. 73 percent of the companies consider sustainable measures to be very important: This means that awareness of ecological responsibility is deeply anchored in the industry.

Intransparency slows down funding programs

Only a minority of trades businesses (27 percent) use public funding – although more than the average of the SMEs’ industries (18 percent). There are various reasons for this: More than a third are not aware of this possibility. Others know about subsidies but do not use them. For example, 27 percent are unfamiliar with the appropriate programs and requirements. Likewise, more than a quarter would need additional consulting services to take advantage of the funding. Even the companies that have made use of funds confirm this: 61 percent were only able to find and apply for the right funding program with external support.

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