standards. This ambitious challenge absorbed the political and economic attention in Germany. 

But everyday challenges like improving e commerce readiness factors have gained more and 

more importance in the last few years. German firms have been able to catch up with leading 

countries like the US and Denmark over the last two years.  

As the largest economy in Europe and being highly export oriented, Germany plays an important 

role in the area of e commerce usage, due to its competitive and international business activities. 

In other words, German enterprises had already reached a most competitive level in terms of 

efficient and innovative production in the world even without e commerce.  

The most important e commerce enabler in the B2C sector is the generally highly educated and 

skilled population as a broad base of well informed Internet users and potential online customers. 

This will also help reduce workforce shortages in the ICT industry, as well as in industries 

deploying e commerce applications in the near future. Together with the relatively high income 

level of German wage earners, education and wealth are the most important e commerce 

enablers, both of which are realized in Germany. 

A natural advantage is the geographic location of Germany in the center of Europe, which allows 

it an excellent network infrastructure as well as short physical distances to all other European 

countries and markets. The assertion that in view of modern telecommunications physical 

distance is losing its importance appears to be true concerning digital goods. But physical 

distance is still of considerable importance for distributing physical products. The central 

position of Germany as a hub within Europe, together with the excellent public and private 

infrastructure, attracts foreign investment. For example, every important European business 

region is reachable in less than two flight hours and package deliveries inside Germany are 

delivered within one day or even faster. This means efficient connectivity to e commerce 

markets in Europe based on the German infrastructure. Another reason for MNCs to enter 

Germany is the prevailing and generally stable social peace and continuity in the cooperation 

between management and unions. 

The social interest and willingness to take an active part in developing  the e society  is 

increasing. Germany has not only entered the catch up phase compared to the first adopter 

innovation schema, but in many areas has already caught up and is now gaining a competitive 

advantage in Europe and in the world. The utility of the Internet in all aspects of life, in the 

office or at home, for work or fun, has, together with the maturity of services and products 

available online in Germany, convinced users and customers of the need to use the Internet.

The main drivers of e commerce use and diffusion in the B2B sector are the strong international 

competition and globalization of the export oriented German industry. The manifold 

international trade connections increase the speed of diffusion of standardized electronic 

transactions. This trend is not only observed within large firms but especially in the strong and 

innovation friendly German SMEs (Mittelstand), which are of high importance for ICT diffusion 

in Germany. Our survey data shows that the German economy is not only an important export 

oriented industry, but it is also highly interconnected with foreign branches or headquarters (see 

Table 1).

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