Digitalization and resilience of industry sectors: A descriptive analysis of the Covid-19 crisis in Germany

Digitalisation is widely believed to aid societies and economies in managing crises, for instance by facilitating remote work. However, there is limited evidence of the extent to which digitalisation has improved social and economic performance of industry in the COVID-19 crisis. This paper examines correlations between three socio-economic indicators of resilience, and digital intensity of industry sectors in Germany between 2020 and previous years. We find that sectors with higher digital intensity experienced greater stock market volatility, but also a faster recovery, in 2020. However, less digitalised sectors seem to have performed better in terms of sectoral value added and employment. Thus our descriptive analysis challenges the prevailing positive framing of the impact of digitalization and raises the hypothesis that less digitalised sectors may carry benefits for resilience in the economy. Our analysis also emphasises the crucial role of the public sector and public funding in promoting resilience. We conclude with recommendations on how to design industrial and digital policies for green and socio-economically resilient economies.