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