Every day on average, over eight million Germans will use Google Search to search for a job. Three and a half million German children will use it to help with their homework, while over a small businesses use it to research their skills. On average every hour 750,000 Germans use Google Maps to stop themselves getting lost, while every minute 29,000 Germans use their Android phones to keep in contact with their friends.
The internet is a key part of life for millions of Germans and for the businesses they work for. Because it is often provided free of charge, it is easy to underestimate the value created by better access to information. Sometimes we speak of the Internet as if it just a way that we distract ourselves when are bored - but in reality, the internet is today how we get the information that helps us learn a new subject, improve the skills in our job, research how to vote on a critical issue or just figure out how to do that bit of housework we’ve been putting off for too long.
Google’s mission is to “organise the world’s information and make it universally accessible and useful.” As the gateway to the internet for many people, Google’s products like Search, YouTube, or Android are how they gain access to the largest collection of knowledge ever created.
In this report, Google commissioned us to seek to both better understand and where possible to quantify the different types of value their products are creating and how they help people, businesses and society:
- for people, we looked at the amount of time saved by Google products, how they help us learn, keep us entertained and stay in touch with each other.
- for businesses, we looked at how Google’s products boost productivity, enable a range of industries and help better connect businesses with their customers and workers with jobs
- for society, we look at how Google’s products support democratic debate, making it easier for people to learn about issues such as the environment and providing vital access to information from all backgrounds
In order to better understand this value, we combined a range of quantitative and quantitative research techniques. We ran a new nationally representative poll of 1,000 Germans across the country, exploring how they used Google products in their ordinary life and how much value it was creating for them. At the same time we spoke to 500 senior business leaders across different types of industry and size of business, trying to assess the difference these products were making to their workforce. Finally, we constructed multiple economic models which could help us quantify the total size of the benefits created by Google for the German economy or standard of living.
We discovered many ways in which Google products are making life easier.
At home, for example, the average German is more likely to use Google Search in a given week than to ride in a car or watch traditional TV. 40% of Android users use their smartphone or computer to keep in touch with extended family at least once a week. 51% of Germans say they have been more likely to try a new place because they know they have online directions and would never get lost.
At work, half of businesses (53%) say that their company could operate at most for a few days without access to a search engine, and overall businesses in Germany estimated that search advertising was second only in importance to word of mouth as a means for customers to find them. 48% of small businesses say that the costs of starting a business have reduced substantially or dramatically because of internet tools such as Search. Online tools are already significantly boosting productivity, and in the future we estimate that AI has the potential to boost the economy in Germany by 17% by 2030.
For society as a whole, 63% of people have used Search to find out about a local political candidate in a recent election, and 34% used it to find where they need to vote. Unlike other forms of knowledge and education, Search is used by everyone: there is only a one percent difference in Search usage between the wealthiest and least wealthy in our poll.
In total, we estimated that Google products are supporting at least €30 billion in economic activity, the equivalent of €14.2 billion in GVA, or supporting 100,000 jobs. That is equivalent to 0.5% of German GVA, or around the same size as the agriculture industry (€17 bn) or half the size of the pharmaceutical industry (€26 billion) in Germany.
As important as this traditional economic value, however, is the value created and time saved in everyday life. Other economists have calculated that if you included the value provided by free internet services in GDP, it would boost the growth rate by 0.7 percentage points a year. Our own work found that the additional consumer value created by Google’s products was equal to We found that the total consumer surplus of Google’s products in Germany is €176 billion a year or €45 per month for the median person.
How we quantified Google’s impact in Germany
Traditional traditional economic statistics often do not take full account of the full benefits of the digital economy, such as saved time or the increased opportunities that seamless, rapid access to information can bring. This would also have been true of the printing press or TV. But just because something is hard to measure, does not mean that is unimportant.
In this paper, we sought to use a range of different methods to quantify the economic impact and help provided by Google Search, YouTube, Android and other Google products:
- To start, building on the precedent of previous Google impact reports 1, we used traditional economic modelling built upon third-party estimates of Google’s German market size, potential returns on investment (ROI) and productivity enhancements to measure the economic activity driven by Google Search, Google Ads, AdSense, YouTube, Android and Google Cloud.
- In order to build a broader picture of the benefits, we conducted extensive public polling to ask individuals and businesses how they made use of Google products, and what difference they made to their leisure, work and society. Working with the panel provider Dynata, we polled a nationally-representative sample of 1,000 adults and 200 senior business managers in small, medium and large businesses across Germany, asking them 50 and 23 questions respectively about their experience using Google and other online products. Public First is a member of the British Polling Council, and full tables for all the data used in this report is available to download from our website. [LINK TO BE INSERTED]
- Finally, we explored X in-depth case studies of how businesses and individuals across the different regions and industries of Germany are using Google to power their business.
We go into greater depth on our methodology in the last chapter, which explores how it compares and contributes to the wider debate on measuring the value created by the Internet. The full technical details are given in an appendix at the end of the report.
While Google commissioned this report from Public First, it did not supply any additional information and all estimates are derived from official, third party and proprietary information.
10 ways in which German people and businesses are being helped by Google
1. In total, Google products are supporting at least €30 billion in economic activity, or €14.2 billion in GVA. That is equivalent to 0.5% of German GVA, or around the same size as the agriculture industry (€17 bn) or half the size of the pharmaceutical industry (€26 billion) in Germany.
2. You would have to compensate the average German €45 per month for losing access to Google products. Germans save at least 23 hours a year from Google Search compared with other methods of finding information because it is faster and easier to access and 7 hours a year from Google Maps.
3. Increasingly, Germans use Android, Google Search, and Google Maps to manage their work more efficiently while on the go. The majority of Germans (65%) have used Google Search to answer a question or deal with work while travelling or out of home or the office. Over half (54%) have used Maps or a calendar to make sure they get where they need to be on time.
4. Search is helping workers find jobs and build skills. Every year 70% of Germans use Search to learn a new skill, and three-quarters (73%) of 18-24 year olds use Search to look for a new job.
5. The internet is increasingly becoming a way that people forge and maintain relationships. 40% of Android users use their smartphone or computer to keep in touch with extended family at least once a week, with Android helping support 5 million relationships and 4.8 million friendships that started online.
6. Workers were more likely to use Google Search in the average week for work than a laptop, desktop computer, Microsoft Office or car. A quarter of workers said that they used Google Search for over an hour a day on average.
7. Businesses in Germany estimated that search advertising was second only in importance to word of mouth as a means for customers to find them. 69% of the businesses we spoke to agreed that thanks to search engines, it was far easier for global customers and clients to find them. 83% of businesses think it is harder to get away with poor goods, food or service because of the internet.
8. Small businesses rely on free products from Google and competitors. 48% say that the costs of starting a business have reduced substantially or dramatically because of internet tools such as Search. 47% of businesses under 50 people say free search and free office tools are important to them being able to compete with bigger players.
10. Google products help people and businesses reduce their CO2 emissions. 33% of people - and 62% of 18-24 year olds - have researched their own environmental impact in the last year, and in the last year Google Maps has saved 160,000 tonnes of CO2 emissions - the equivalent of a passenger flying around the world more than 58,000 times.
Helping people spend time on what matters
Introduction - the use of Google products in Germany
In a given week, the average German is more likely to use Google Search than to ride in a car or watch traditional TV. Across the population, people are 70% more likely to use Google Search on a particular day than a dishwasher.
Weekly usage of different products
Like the television, refrigerator or telephone before, many of Google’s products have become essential household technologies:
- The average German user of Google Search is likely to have used it in the last year to research a topic, get help with a technical issue, find a local business, research a political issue, get help with housework and DIY and research a medical issue.
- YouTube has created an important complement to traditional TV. While many use it to watch traditional TV shows, even more important has been the completely new forms of video it enables, from vloggers to streamers to quick instructional videos
- Thanks to Google Maps, it is far easier to travel to or around a new location - or just avoid congestion on our daily commute. Over half of Germans say they regularly use Google Maps to avoid getting lost, try a new route to travel or look for something new to try.
- The average German would rather lose access to their car than their smartphone - with Android the leading smartphone OS in the country.
How often Germans use Google products
In order to calculate the value created by Google’s products, we looked at three key ways in which Google’s products help Germans in their everyday life:
- Making it easier to get things done. By making it easier to access the world’s information, Google products have freed up significant amounts of leisure time and made it much easier to remain productive while on the go;
- Supporting family life and relationships. It has never been easier to stay in contact with distant friends or family, or to find the information to support your family’s health, education and safety;
- Pursuing interests or finding entertainment. The rise of search engines and platforms such as YouTube have enabled an unprecedented increase in choice and a long tail of new hobbies, interests and communities. Whether you are in your lounge or waiting for a train, it takes seconds to find something new to inform or entertain you.
Getting things done
Over the course of the twentieth-century, average working hours in the workplace in Germany fell by nearly a half, from 64 to 39 2.
As important as the decline in working hours in the office, however, was the decrease in time spent in doing work inside the house. In 1900, data from America shows that average household would spend 58 a week preparing meals, cleaning and doing laundry. The arrival of new domestic technologies such as the clothes washer, vacuum cleaner and refrigerator helped significantly reduce the time needed for housework. By 2015, the average time spent on those same chores was less than eight hours.
Unlike the increase in productivity in the workplace, this increase in leisure time does not directly show up in official GDP statistics. Nevertheless, by significantly freeing up time, these new technologies increased leisure time, allowing households to spend more time catching up, relaxing or pursuing their other projects. On average, those we polled suggest that an additional hour of leisure is worth around €19 to them, suggesting that the extra time freed up by new technology can be highly valuable.
Today, it is increasingly digital technologies that are freeing up time in the household. In this section, we look at the value of the time saved by Google products such as Search, Maps, and Assistant. In total, we estimate that Google products are saving at least 30 hours a year - the equivalent of over an extra day in free time.
Saving precious time
Finding information easier
We asked Germans why they used Google Search:
it saves them time
it provides information not available in other ways
it is easier or as easy as alternatives
How much time do you save with Search?
Making information easier to access is making a significant difference to people’s lives. The average user saves at least 23 hours a year from Search compared with other methods of finding information because it is faster and easier to access.
In 23 hours or less you can:
- Watch the entire Ring cycle 3 and then also see Fidelio and Salome 4
- Drive across Germany - and back again.5 (Konstanz to Sassnitz)
- Watch the whole of Babylon Berlin and Bad Banks
This number is likely to be a lower bound on the time saved by Google Search. If you included the time saved by applying the new information from Google – trying out a new recipe, or learning a new skill – the time saved would be even greater.
While not every use of Search will be serious - around half of Germans (48%) say they use Google Search at least daily to find a piece of trivia - the majority of Germans say that regularly use Search to help with their everyday activities, from researching a big purchase to finding travel times.
For the most part, they find Search is useful: 63% agree that the Search helps solve their problem the majority of the time, compared to 12% who thought that it was usually a waste of time or 27% as a way to procrastinate.
Increasingly, however, Search is not the only way we obtain information. For those who find a video easier to learn from, we found significant numbers of Germans were also turning to YouTube for help around the home. Nearly two thirds of people use YouTube to help with cooking (63%) or with home maintenance (71%).
At the same time, 38% of Germans had tried using an AI personal assistant (such as Siri, Google Assistant, or Cortana) and 16% now used them on a daily basis.
kNOW! is a classic family focused board game for 3-6 players with 1500+ questions, produced, owned and distributed by one of the most trusted German brands – Ravensburger. It is the first board game that “works with the Google Assistant” highlighting the Assistant’s product magic - thus the answer to the questions vary depending on where and when you play it, like "How long does it take from here to Berlin by bike?". Complemented with a dedicated Action on Google integration that enhances gameplay with curated content that changes depending on the season or certain events, it is the first board game that never gets out of date.
Getting where you need to go
Until recently, we relied on atlases and paper maps to find new places. We may also have got into arguments about directions while driving, or been worried about going to unknown locations on our own.
Today, we find that Google Maps and other location apps have made it easier for people to find restaurants and businesses, get around in new cities, and get to places more quickly and easily. 69% of German internet users turn to Google Maps at least once a month and 15% use it daily.
When we asked a series of questions about why people used Google Maps, we saw that saving time - through avoiding traffic, avoiding getting lostor to get better directions - was very common.
In total, we estimate that the use of Google Maps save the average German seven hours a year.
While our regional sample sizes were smaller, we also find some evidence that usage of Google Maps was more common in densely populated urban areas, with Berlin and Hamburg residents showing the highest levels of daily usage (29% and 33% respectively). This is likely driven by the need to manage complex commutes and travel, with 18% of those in Berlin use Google Maps to avoid traffic congestion or public transport delays, and 20% of those in Hamburg. 19% of those in Berlin use Google Search daily to find travel times, and 28% in Hamburg. These areas show high public transport use, and Google Search and Maps appear an important way for city dwellers to manage their journeys.
Percentage using Google Maps to...
The average person in Germany spends 1.3 hours a day travelling, or around 500 hours a year. Until recently, much of that time would have been wasted. There is significant evidence that a longer commute is linked with reduced happiness - with one recent study suggesting an additional 20 minutes of commuting per day is as bad for your job satisfaction as a 19% pay cut. 6
From podcasts to apps, streaming video to game, the rise of the smartphone has helped make travelling far more entertaining for many people - and often more productive too. Rather than wait to get back to your desk to look up a crucial piece of information or respond to an urgent message, we are now able to act much more in the moment.
We identified three ways in which Germans regularly use Google’ products while on the go.
Germans now get things done while they travel
First, smartphones and Android have changed our experience as we travel. Increasingly, we spend that time:
- Looking up information. 65% of Germans have answered a question they had using Search while on the go.
- Enjoying themselves. 51% have entertained themselves with a game on their smartphone while travelling
- Managing work The majority of Germans use Google Search to answer a question or deal with work while travelling or out of home or the office. Over half also use Maps or a calendar to make sure they get where they need to be on time.
In total, a third of Germans (33%) say that they use their phones to reduce their boredom while waiting for something else at least once a day, and just under half at least once a week (46%).
|While travelling or running errands during day to day life, how likely are you to… at least once a month|
|Answered your work email or done other work||41%|
|Checked your calendar||55%|
|Use Maps or a calendar reminder to avoid being late to a meeting||54%|
Real-time information helps increase consumer transparency as Germans shop
Second, we found that people are using their ability to ask questions online to support better decisions offline. 60% of people say they use their phone to research a potential purchase in a shop in the last year. This allows them to avoid products which get poor reviews, and make sure they are paying a good price.
Germans now decide what to do while on the go - and get there as fast as possible
Third, it is changing how Germans find new experiences at home. Restaurants and businesses once relied on word of mouth. Tourists would often stick to places that were near major sights, rather than go to higher quality places elsewhere. Now Google Maps gives accurate, real time information and can make us aware of restaurants and other businesses in the area.
|How often do you use Google Maps to...|
|Find a local business||56%|
|Find a nearby restaurant or cafe||48%|
|Get directions while travelling||58%|
|Avoid traffic congestion or public transport delays||48%|
Search is also used for this purpose. 70% use Google Search to help them find a restaurant and 56% have used Search to find a local class or activity.
Supporting family life and relationships
Across the world, there is a clear relationship between the amount of time you spend with your friends and your self-reported happiness. One of the clearest findings of the 80 year Harvard Study of Adult Development - one of the longest running studies in social science - is that “those who kept warm relationships got do live longer and happier.”7
One of the most important benefits of the digital revolution has been its impact on relationships. It has never been easy to find a group of friends who share your interests, no matter how obscure, or to keep in contact with distant family. Nearly two-thirds (64%) of Germans agree that the Internet has made it easier to more regularly keep in contact with their relatives.
As well as helping keep them in touch, many families also regularly use Google products to help with their children’s education, or to learn how best to keep their children safe and healthy.
Keeping in touch with friends and family
One hundred years ago, the cost of making a six minute phone long distance phone call could easily equal the average worker’s salary.8 While some form of postal service has existed since the ancient world, in practice trying to keep in contact with distant relatives has historically been expensive, slow and unreliable.
Today, the internet has made seamless, instant, free communication possible. People can email, message each other, or talk to each other on video for as long as they like, often for free.
We found that the internet is increasingly becoming a way that people forge and maintain relationships - and much of this is taking place through Android phone or Gmail. From our polling:
have met a current or former friend online
current or former romantic partner online.
In total, that conservatively implies an additional 5 million relationships and 4.8 million friendships that started online.
The Internet is particularly important to people who find it hard to find others who share their interests in the physical world. Three-quarters of Android users (76%) who say they find it hard to find people who share their interests in the real world say that being online has made it easier to find people who share their interests, and over half of them (59%) say that talking to people online has helped them feel less lonely.
At the same time, we use digital communications to say in touch both with our extended family and close family through the day
to keep in touch with extended family at least once a week
Improving health and wellbeing
We all worry about our own health and those of the people we love. One of the advantages of the internet is that it gives people information about medical issues that - previously - they would have had to make demands on medical services for. Every year in Germany, 76% of people use Search to research medical and health issues.
They also use it to look after themselves. 31% have used Search to look up fitness or local activities.
Promoting safety and security online
Internet safety programmes in Germany
For 10 years, engineers in Munich have developed safety tools like Google Account or the Privacy Checkup, that are widely used by users all over the world [insert approved #].
Now, in May 2019, we’ve launched the Google Safety Engineering Center, responding to the global call for a safer, more trusted Internet. Led by an experienced team of engineers in Munich, it is a hub of all of Google’s Internet safety work around the world. By understanding the problem, developing solutions, partnering with others and empowering users everywhere, we can build a better, safer Internet for all.
Controlling who sees your data
Google allows individuals to control what data is saved when they use Google Search and how that data is used to generate personal ads. Data can also be deleted - both from the last hour but also permanently.
How parents keep their children safe online
Google has a number of features designed to give parents control over their childrens’ screen time. Activity reports show how much time they’re spending on particular apps. Notifications also allow responsible adults to block apps and manage any purchases.
Google’s feature Family Link also allows parents and carers to set limits on screen time; bed times; and to lock devices.
If parents are ever worried about their child’s whereabouts you can use Family Link to locate their device.
Supporting learning and development
Google Search and YouTube are used by millions of students to support their study. They have the ability to find any piece of information within seconds, from a wide range of reputable sources: worldwide, there are over 500 million views of learning-related content on YouTube every day.
In Germany, Google Search is also used to support learning: 73% of parents online say that their children used Google Search to help with their homework. 55% of parents have used Google Search to get advice on their children (for example good activities, or their development).
It is not just children who use Search to learn. We found that the majority of Germans, whatever age, are using Search to find new information, helping create a culture of lifelong learning. 82% say they are more likely to look something up when they are unsure about it than when before search engines existed. 90% of people use Search to research a topic at least once a month.
Google Scholar: access to the world’s best research
From science and history to economics, Google Scholar helps people access research and knowledge. It is a simple way to search for academic literature across sectors and disciplines: articles, theses, books, abstracts and court opinions, from academic publishers, professional societies, online repositories, universities and other web sites. Some studies have found Google Scholar to have both better sources and to be more usable than other methods of finding academic papers.9
Pursuing interests and entertainment
Finding and developing new passions
Television was one of the most important inventions of the twentieth century. Across advanced economies, it reshaped entertainment, marketing and culture. Even today, the average person we spoke to estimates that they spend 2.5 hours a day watching TV.
While it is only 14 years old, YouTube is increasingly looking like an important complement to traditional TV.
The way people watch YouTube, however, is very different to traditional TV and movies or even streaming platforms such as Netflix. Very few people watch YouTube for extended periods of time. Instead, it is a platform people dip in and out of:the most common usage is less than fifteen minutes.
How often do you spend watching YouTube on an typical day?
What they watch is also very different. Unlike Netflix and other streaming services, YouTube is not only providing a new platform for traditional TV shows but enabling wholly new types of content. Three quarters of people (75%) use it to watch music videos, and 54% now use it for fitness or health. 43% of people overall - but 89% of 18-24 year olds - watch vloggers on YouTube. It has become a core part of how people seek ways to improve their lives, get advice, and learn new things.
YouTube seems particularly important as a way for people to explore their own interests. Those who spend significant amounts of time on particular areas like DIY, cooking, and make up in their daily life are much more likely to watch content and advice on YouTube.
People pursue their interests on YouTube
YouTube initiatives in Germany
Wir sind mehr/Wir bleiben mehr Concerts with Arte
Last year the music industry came together for a benefit festival in Chemnitz to deliver a positive message ("wirsindmehr" - we are more) in response to rising far-right violence in Chemnitz.
YouTube supported the live stream of the event with production costs and technical assistance. The festivities hashtag #wirsindmehr was the top debate hashtag in 2018, becoming a symbol for protesting against far-right extremism and xenophobia that had formed on social networks in late summer.
In 2018, the event attracted 65,000 visitors while another 1.1 million followed the livestream on YouTube.
In 2019, in conjunction with ARTE Concerts, YouTube supported the second edition of the live stream.
The event brought together music culture, social dialogue and sport - rejecting all forms of discrimination, far-right radicalism and racism. 40 bands, including best-selling artists Herbert Grönemeyer and Dr. Motte, 35 civil society groups including #unteilbar and see Sea Watch, 30 cultural organisations - and 50,000 people - supported the the cause.
There was even a basketball game featuring the local professional team Niners and the band members from Kraftklub and Milky Chance.
Loot für die Welt
2018 was the fifth year of the 48 hour Charity Livestream by Lefloid, DrFroid and Space Frogs in the YouTube Space in Berlin. More than €239,000 was donated.
More than 2 million watched the livestream for a total of more than 327,000 hours
At "Germania" selected personalities show their views on topics such as identity or homeland, tell stories from their childhood and their arrival in Germany.It is not about triggering a political debate, but about presenting the fact that Germany welcomes immigrants and that society it is a multicultural and multinational.
Germans use Google products to experience better holidays
The internet has transformed the way in which we travel to new places. Online rating sites, real time information on flights and costs, and the ability to navigate around strange places have helped us have holidays that live up to our expectations.
In our polling we wanted to understand whether Germans who are online use Google’s services while on holiday or on a business trip. We found that many of them did:
There are also signs that people are increasingly adventurous. 51% of Germans say they have been more likely to try a new place because they know they have online directions and would never get lost.
The value of Google products in daily life
In this chapter, we have explored some of the ways in which Google products help people in their daily lives: saving time, making it easier to find information, hosting new kinds of entertainment and helping people better keep in touch.
Traditional economic impact studies have tended to focus on the impact of a company or product on GDP. GDP itself, however, has never included everything we value or every type of work we do.
Taken literally, GDP takes no account of changes in our leisure time or the amount of work we do in non-market roles, such as housework or looking after family. The majority of the kinds of help we have explored in this study do not increase GDP in the way we normally measure it.
How can we better understand the value created by Google in daily life?
One way to do this is to look at changes in the consumer surplus. The consumer surplus is defined by economists as the difference between the amount a consumer would be to willing to pay and the amount they actually do pay.
This is particularly relevant for products such as Google’s, which are largely provided to the end user free at the point of use. Just because their price is zero however, does not mean that they are worthless.
In order to better understand the value of Google, we used two types of methodology to create new estimates for the consumer surplus of its core products:
- Where possible, we produced estimates of the value of the time saved from using Google products such as Search, Maps and YouTube
- We used our consumer polling data to explore what the minimum amount you would have to compensate them for losing access to each product, building on the methodology previously established by other leading economists10
We found that the total consumer surplus of Google’s products in Germany is €176 billion a year or €45 per month for the median person. :
For Google Search,, the total consumer surplus is equivalent to €77 bn, or €29 a month for the median person
For YouTube,, the total consumer surplus is €21 bn a year, or €11 per month for the median person.
For google Maps,, the total consumer surplus is €16 billion a year or €7 per month for the median person.
For Gmail,, the total consumer surplus is over €45 billion a year or €4 per month for the median person.
For Google Docs,, the total consumer surplus is over €17 billion a year.
The total consumer surplus is equivalent to over 5% of GDP, the equivalent size of the German financial and insurance industry.
In addition, we estimate that the total consumer surplus from Android smartphones in Germany is worth over €74 billion a year or €137 per month for the median household.11
Crucially, our estimates found that this consumer surplus is significantly higher than for other consumer products. Indeed, when we asked people to choose from a range of things they would least like to give up, we found that Germans were more reluctant to give up Search than public transport and would rather lose access to a car than give up their smartphone.
Together, this evidence suggests that traditional statistics like GDP are doing a poor job of measuring the value created by the Internet. Other studies have found that if the value of free internet services are included within GDP, it would increase the recent rate of GDP by the equivalent of 0.7 percentage points a year.12 We explore more how our findings fit into the literature in the last chapter.
Consumer surplus (bn)
Helping people and businesses succeed
As important as Google products are now for German home life, they also increasingly are becoming a crucial tool for business too. 59% of Germans regularly use Google Search at their workplace or for study, and half of businesses (53%) say that their company could operate at most for a few days without access to a search engine.
Technology has always been one of the most important drivers of growth and productivity. In recent decades, ICT has been responsible for around half of productivity growth in Germany.13
Germany is often cited as a model in other countries in Europe and around the world for its productivity and highly-skilled workforce. While German companies have a long history of efficiency and productivity, they maintain their competitive edge by adapting.
In the last five years, German companies report significant increased adoption of the use of email, smartphones, search engines, online maps, and online office suites - and they expect this adoption to only increase in the next five years. Germany currently scores around average on the EU’s Digital Economy and Society Index, suggesting there is still significant room to catch up with leaders such as Finland, the Netherlands and the UK.14
Google products are already significant contributor to worker and business productivity in Germany:
Google Cloud Provider
business uses G Suite;
As industry adapts to the next wave of technologies - big data, AI, and advanced robotics - there is likely to be significantly more opportunity to further enhance economic productivity.
Two-thirds of German businesses expect data science and machine learning to be used by a majority of their workers within the next five years.
In order to calculate the value created by Google’s products, we looked at three key ways in which Google’s products support German businesses, workers and economic growth:
- Helping connect businesses with customers and workers with jobs. Google helps connect bring together businesses, workers and customers in the economy.
- Improving productivity and skills. Search, G Suite and Android are already essential tools for a significant number of workers, letting them learn new skills, work more flexibly and better coordinate. Looking forward, AI and machine learning are likely to significantly increase business productivity and free up worker time to focus on where they can best add value.
- Enabling eco systems and new types of company. Google products act as a platform and enabler for many types of business that did not exist before, from YouTube Creators to Android developers to micro businesses now able to sell to new customers across the globe.
Finding jobs and boosting skills
Helping people find jobs and grow in their career
For over a hundred years, an important goal of public policy has been to help match workers with the right jobs, and once in work, train and improve their skills.
By making it easier to research different options, search engines such as Google Search help improve consumer choice, transparency and competition.
One of the most important markets in which this is true is the labour market. Google Search is increasingly the leading gateway through which workers look for a new position and, once there, seek to improve their skills.
This is particularly true of younger workers. 73% of 18-24 year olds and 65% of 25-34 year olds say they use Google Search at least once a year to look for a new job, and 79% and 69% respectively to get advice on their CV.
Find the right job for you with Google Search
In May 2019 Google launched a new job search experience in Germany. When you search for “jobs near me”, “teaching jobs”, or similar job-related queries you will now see a new user experience, showing the search results in a helpful and easy-to-filter way. The new experience not only showcases all vacancies in one place, it also contains reviews and ratings of the employer and different options to apply for a job, or use a location filter to see jobs in the areas that are convenient for you, and how long it would take to commute to a job from your home.
Google closely collaborated with publishing houses, such as Frankfurter Allgemeine Zeitung and Südwestdeutsche Medienholding and job board providers and platforms such as Xing.com and Kununu.com, jobs.zeit.de and academics.de, Monster.de, Azubi.de, Absolventa.de, Azubiyo.de and Joblocal.de, Careerbuilder Germany, Netzmarkt and LinkedIn.
Helping managers learn more at work
As much as their workforce, business owners and managers are also increasingly turning to Google products to stay on top of trends and opportunities, be aware of what their competitors are doing, and constantly improve their own practices and management.
In our business poll, we found that at least once a month:
learn a new skill;
up to date with industry trends;
New business opportunity
new marketing opportunities;
Preparing people for the jobs of the future
Improving daily productivity at work
Like the PC and the spreadsheet a generation before, arguably the most important personal productivity tools of the last generation have been the smartphone and the search engine.
In our polling, we found that Search was widely being used for work or study across ages, incomes and regions, and in the businesses of nearly all sizes or industries:
- Workers were more likely use to Google Search in the average week for work than a laptop, desktop computer, Microsoft Office or car;
- A quarter of workers said that they used Google Search for over an hour a day on average;
- A quarter of workers said that without a search engine their work would be more difficult and take longer to do.
It is not just Search. 22% of individuals say that their jobs would be harder without access to a smartphone, while 16% of business leaders say that online maps are essential to the running of their business and 24% an online office suite. A previous Forrester Consulting study estimated that the deployment of G Suite had the potential to save employees 15 minutes to 2 hours per week in more efficient collaboration.15
Increasing company productivity
Across the German economy, businesses are already using an increasing number of internet tools - and the business leaders we spoke to expect this rise to continue. The chart below shows the percentage of business leaders who report most or all their employees using different technologies five years ago, today, and what they predict in five years time.
Usage of internet technologies over time
Why do employers predict such a rise? Because increasingly these tools are important to their businesses.
The employers we spoke to agreed that the internet has increased productivity and enabled new styles of working:
- 65% of the business leaders we polled agreed with the statement “Having access to the Internet makes the employees of my company significantly more productive”;
- 69% agreed “It is easier for employees to work remotely”; and
- 69% agreed “It is now easier for workers and different teams to collaborate than before online apps and cloud services”
Many of these tools have now become essential. Over half of businesses said that they could only operate a day or two without a search engine, and less than a quarter could operate more than a couple of days without email.
How long could your business operate without
The uptake of cloud computing is still relatively low in Germany. According to Eurostat data, just 22% of German enterprises use cloud computing services, compared to an EU average of 26% or 65% of enterprises in Finland or 48% of enterprises in Netherlands.
Nevertheless, we found that a third of internet connected business leaders said that their company had used Google Cloud Platform, while other third party estimates have found that Google Cloud has increased productivity in Germany by €530 mn.
With an ecommerce platform and data lake project, German wholesale giant and food specialist METRO is using Google Cloud Platform to help its customers take more advantage of digital possibilities. With the help of Google Cloud METRO has reduced instability of its ecommerce platform by up to 80%. The infrastructure costs have been reduced by 30% to 50%.
METRO CIO Timo Salzsieder said:
"Moving to Google Cloud allowed us to get rid of hardware issues. GCP handles the scalability. We do not have to deal with the additional costs of adding hardware on short notice. We migrated our people from on-prem fans to Google Cloud fans.”
"The industries we supply tend to have fixed ways of working," says Dr. Werner Rath, METRONOM's Unit Owner IT Operations. "Until recently, orders were still often made by telephone, or even fax. But when that started to change, we decided to fully embrace digitalization, with a close focus on our customers and their needs."
Helping SMBs compete and grow
Internet tools have been particularly important for the productivity of small businesses. Anyone who wanted to start a large export business twenty years ago, would probably have to invest in an international advertising campaign, in-house IT servers and expensive software licences.
Today, free online tools, cloud computing, and the ability to communicate to customers across the globe have dramatically reduced the barriers to entry for start-ups. From our poll, small companies are even more likely than large ones to depend on free internet tools.
- 48% say that the costs of starting a business have reduced substantially or dramatically because of internet tools such as Search;
- 47% of businesses under 50 people say free search and free office tools are important to them being able to compete with bigger players.
Do most or all of your employees use the following products
Google products aren’t just helping big businesses, they are helping smaller companies as well:
- 56% of businesses with under 50 employees believe that they could not run their business without search engines;
- 57% of businesses with under 50 employees believe that they could not run their business without smartphones.
Of course SMBs are very different in characteristics. Some are growing fast, some are likely not to succeed. But when we look at growth, we also find that higher growth companies use Google products more.
Google product use and growth
Google for Startups
Google for Startups supports startups around the world by providing products, contacts, and Google's expertise to help founders move through key stages of their development. It also helps to promote and network startup communities. Google for Startups has 50 partners in more than 140 countries, reaching more than 250,000 founders worldwide in 2018 alone.
One of the main goals is to promote an open and inclusive startup community through programs and initiatives. In Germany, female founders are particularly underrepresented. Google for Startups wants to change this by raising awareness of the issue through research such as the Female Founders Monitor, a publication co-authored with the German Startups Association which is looking at the state of female founders in Germany overall, their challenges, but also identifying opportunities to support them. Brigitte Zypries, Former Federal Minister for Economic Affairs and Energy has been acting as the sponsor and ambassador for the survey over the last 2 years.
For most students, the summer holidays are about fun and sun. For Nik Kiene, Malte Schülein and Lennart Hartrumpf, three students from Flensburg, Northern Germany, it was a chance to follow their dream of creating their own start-up. While the friends had an innovative idea – a unique ‘shareconomy’ platform for under-used luxury goods and sporting equipment called ShareSpace – they lacked the practical digital skills to turn their vision into a reality. After finding out about Grow With Google’s Google Zukunftswerkstatt, Lennart attended one of the free, face-to-face digital skills trainings at the local training centre in Hamburg. He realised instantly that it was just what he and his friends needed to take their idea to the next level.
Over the next weeks, the three attended trainings literally every day – even with a six-hour commute. “Getting up early was definitely worth it. We are way more confident now. The trainings have helped us on many occasions, especially during talks with more experienced business owners,” says Malte. “The insights from the trainings on Google Analytics helped us tremendously to properly evaluate data and improve our platform,” explains Lennart. “While the online marketing courses are now helping us get the word out about our start-up.” Since attending Google Zukunftswerkstatt, the three friends have launched a beta version of ShareSpace, and have officially registered their company. They are now hard at work during the weekends and after school to find seed funding to take the start-up to the next level.
The future of productivity
In its first twenty years, the majority of value created by Google services came from improved access to information and communication. In the next twenty years, as important is likely to be the value created by the application of AI and machine learning to automate routine tasks. Google CEO has argued that the company is set to move from “a company that helps you find answers to a company that helps you get things done.”16
While it is hard to predict the future reach of a specific company, we can more confidently predict the potential of AI and the digital industry for the economy as a whole.
In total, our estimates suggest that AI has the potential to boost the economy in Germany by 17% by 2030, boosting average growth rates by an average 1.5 percentage points a year. That is the equivalent of an additional €50 bn in GDP, or an additional €600 per German, each and every year.
As well as boosting living standards, AI is also likely to make work itself more pleasant - freeing up time for employees to spend on more creative or meaningful tasks.
As one example of this, the average employee in Germany today spends almost an hour a day in administrative tasks, such as filling out paperwork, submitting expenses or booking a meeting room.
Through products such as Assistant and Duplex, Google has already demonstrated technology that can suggest standard email replies, find a suitable slot for a meeting or book an appointment.
If we could use AI to take over just 10% of the average worker’s administrative tasks, it would save them the equivalent of 16 hours in work time a year – and by itself boost productivity by 1.2%.
Businesses reaching customers across the world
Google products have transformed how many customers businesses can reach
In the history of advertising, the first ads were signposts in the road: this way to food, or this way to firewood.) Advertising itself is information. Over time, people worked out that it is a better use of time and resources to place signs closer to the destination. Advertising was always about reaching people at the best possible moment: when they were most interested in buying the thing.
With the 20th century came mass media. Mass media meant an expansion and infusion of new voices in media. Genre entertainment (such as Westerns, situation comedies, and news shows) was largely premised on the ability to define audience segments as well as generate scale, and sell advertising on that basis. Then radio joined newspapers, TV joined radio and mass-market magazines, and along came the internet. Today, websites, blogs, video content — nearly all of that is funded by ads.
Google’s key innovation was using data to:
- Help advertisers reach people at the best possible moment;
- Help them ensure that their pounds were well spent;
- Enabling niche businesses to target those with very specific interests.
That means fewer, better ads – and an improved user experience for the consumer.
For businesses however, it has been even more transformative: enabling a new long tail of ultra-specialised small businesses, serving customers worldwide.
In our polling, businesses in Germany estimated that search advertising was second only in importance to word of mouth as a means for customers to find them. 69% of the businesses we spoke to agreed that thanks to search engines, it was far easier for global customers and clients to find them. Around half of the businesses (46%) thought that Search was so important their business would not exist without Search or online advertising.
How important would you say each of the following are as ways customers/clients find your business?
The majority of the value created by Google advertising is captured by businesses and their customers. In total, we estimate that Google earns around €3.6 billion in revenues from Google Ads in Germany. However, our estimates suggest that Google Ads is driving € 28.5 bn in total in economic activity in Germany. Assuming standard economic multipliers, that is the equivalent of supporting 96,000 jobs.
On average, Google calculates that for every euro businesses spend on Google Ads, they receive back €8 back in profit. To start, each business receives on average back €2 for every €1 they spend. This in turn is further boosted by traffic that comes through organic search, with other estimates suggesting that businesses receive around five clicks on their search results for every one click on their ads.17
Over the years Google Ad Grants have allocated $476m worth of free online advertising through in-kind Google Ads to over 2,300 organisations in Germany, Austria and Switzerland.
In 2018, Google provided $40.5m of free advertising to nonprofits from Germany, Austria and Switzerland through the Google Ad Grants programme.
Businesses of any size can find new markets
One of the biggest transformations of the internet is that businesses can reach anywhere across the globe. At the same time, it has made it easier for small businesses to compete with larger enterprises – meaning that organisations no longer have to commission expensive TV or print advertising campaigns, but can target customers much more clearly. Tools like Google Ads, Analytics and Market Finder have made it much it much easier for businesses of any size to reach new customers wherever they are based.
69% of the businesses we spoke to agree that compared to the time before search engines, it was now far easier for global customers or clients to find their business, and 50% agreed that that their business would have significantly fewer international clients without Search and online advertising.
It is not just global customers. Tools like Google Maps and Google My Business have made it easier for people locally, regionally, nationally and internationally to find new businesses like restaurants. This can be particularly important to those in out of the way locations. 30% of those we polled said that online maps are “so important that we could not run our business without [them].”
Businesses have become increasingly customer-centric
In the first section of this report we described how Germany used the internet to find businesses, restaurants, and make better shopping decisions. This, in turn, has an impact on businesses who cannot hide from poor quality or service. The people and companies we polled agree: 64% of shoppers think they make better purchasing decisions because of online information, and 83% of businesses think that maintaining higher levels of customer satisfaction has become more important due to the internet.
By increasing transparency and choice, Search and other online tools have increased effective competition - leading to more productive companies and a better quality service for the end customer.
Protecting businesses online with leading security
While the internet has magnified the reach of traditional businesses, it has also created entirely new markets too. In this section, we focus on three of them: developers, small publishers and YouTube creators.
Android is the world’s most popular app platform, helping ensure that it is never been easier for app or games developers to deploy and market to customers worldwide.
Globally, over 5.9 million developers target Android first,18 with around 6% of global developers estimated to reside in Germany.19 In total, the Google Play store offers around 2.7 million apps to download,20 with over 75 billion apps downloaded globally from the Google Play store in 2018.21 The average consumer in Germany regularly uses over 30 apps, with just under 100 apps installed on their smartphone.22
In Germany, we estimate that Android developers generate €700 million in annual revenue for the German economy.
Mobile App Launchpad and Google Developer Training
United Nations World Food Programme - 5 days startup bootcamp with one impactful mission: zero hunger. We identified the unique opportunity to mentor entrepreneurs focussing on social impact, zero hunger, and sustainability of energy, by applying Launchpad’s methodologies to the WFP’s bootcamp program. We provided 135 mentoring sessions, 180+ mentoring hours, from 40 mentors covering 13 countries (43% female mentors, 8 Experts) and supported 10 amazing teams
Leading landline telephone manufacturer transforms its business with Android
Founded in Düsseldorf in 2008, Gigaset is the leading landline telecommunications company in Europe, producing high-quality landline telephones and smart home solutions. With the help of Android, Gigaset ventured into the smartphone business and launched its very first Android smartphone in September 2015. The telecommunications industry moves at an incredible pace, particularly the smartphone market,” explains Product Manager Dominik Bläker. “We wanted to speed up our product development. Thanks to Android, we’ve reduced our development expenditure by 30%. Moreover, development on Android OS allowed us to shorten our development cycle by 25%, which is a huge amount, given the kind of labour-intensive development required to make high-end smartphones like ours,” explains Bläker. Gigaset customers have responded positively to the new Gigaset Android smartphones. “Our first Android smartphones are being very well received. Android has enabled us to maintain our leading position in the market and hire more staff for our new smartphones business unit. We consider Android to be the best operating system out there,” concludes Bläker. With their new Me range of Android smartphones, Gigaset has also managed to secure lucrative sponsorships with Bayern Munich and Royal Ascot.
AdSense allows publishers - whether multinational news organisations or individual bloggers - to monetise their content through the sale of advertising space on their sites and apps. It allows anyone, no matter their size, to earn revenue for the content they create.
Our modelling finds that in total Adsense generated €285 million in 2018 for German websites and publishers.
Google News Initiative
The Google News Initiative, launched in March 2018 following the success of the Digital News Initiative (started in 2015) in Europe.
It signifies a major milestone in Google’s 15-year commitment to the news industry representing our largest company-wide effort to help journalism thrive in the digital age and bring together everything we’re doing with the news industry along three key pillars:
- Elevate and strengthen quality journalism,
- Evolve business models to drive sustainable growth
- Empower news organizations through technological innovation.
In the midst of an evolving digital landscape, one of the biggest challenges publishers and journalists face is monetising their content.
But there is cause for optimism. Supported by the DNI Fund, a small start-up in Germany is providing journalists with the technology and marketing tools they need to build a membership base and generate revenue. The DNI Fund delivered two-thirds of the money the team needed to write the code and take the first steps to market. It also provided the momentum to keep the project on track. Already, over 200 journalists and other content creators, such as YouTubers and podcasters, are earning a regular income thanks to Steady.
“Our goal is to promote and enable media that is funded by an audience, not by big business, online ads or influential benefactors,” explains Founder and Managing Director, Philipp Schwörbel. “We call it ‘people-powered media’, because it is the readers or viewers who are the ones that make it financially possible.”
Philipp and his business partner have personal experience of how difficult it is for new publishers to make a living. Even though their online magazine Krautreporter was funded by Germany’s most successful crowdfunding campaign, it came close to failure. “It’s one thing for a journalist to be great at reporting, but another entirely for them to master online marketing, recurring payment issues and membership management,” adds Philipp. “That experience was the inspiration behind Steady, because we realised that there are many more ‘Krautreporters’ out there that need some support. Using Steady, publishers can easily earn monthly payments from their supporters while retaining full control over their projects, copyright and content. There’s no such thing as a typical Steady publisher – they cover a wide range of topics and while some of them are one-man-shows earning just a few hundred Euros a month, others are teams of up to 15 people bringing in regular five-figure monthly revenues. What they all have in common is access to a range of tools from Steady that they can integrate directly in their websites and blogs to gain memberships.” The results make impressive reading. As well as the 200+ people now earning an income from their publishing activities, the growth of the project has led to the creation of six new jobs at Steady and the receipt of a further €500,000 in funding from other backers.
While almost every reader survey concludes that local news is the most highly valued of all content, making it pay is another matter entirely.
“Monetisation is one of the biggest challenges and opportunities for local publishers,” says Christian Junker, Project Leader at Tagesspiegel LEUTE. “Here in Berlin, our goal was to provide original digital local journalism for the city’s 12 districts. Each of these is actually the size of a city in its own right and has its own distinct local flavour, but is only served by publications that cover the entire Berlin area. The appetite for hyperlocal news is vast – the problem is how to use that to generate revenue.”
Support from the DNI Fund helped Tagesspiegel LEUTE increase subscribers by 40%, which has in turn enabled it to invest in the business – for example, by employing a dedicated journalist for each of the 12 districts. The DNI Fund’s contribution also enabled the team to develop a self-service ad portal for small and medium-sized local businesses. “This is what makes the project work from a financial perspective,” adds Christian. “Local businesses don’t have the capital to invest in citywide advertising, so instead they use our portal to create and place their messages where they’re most effective – in front of a highly targeted local audience.”
Training and development
In Germany, Austria and Switzerland Google trained more than 10,000 journalists since 2015, and 3,000 alone in 2018. Google has provided GNI Fellowship spots to 12 aspiring journalists at top newsrooms.
For decades publishers, record labels, and TV producers have been besieged by requests from individuals wanting their work to be made more widely available. YouTube has provided many with an alternative - giving them a platform to communicate directly to people all over the world. While children used to dream of becoming a film or sports star when they grew up, an increasing number now say their dream is to become a YouTube vlogger. 23
Worldwide, YouTube has a total audience of over 1 billion users, with over 500 hours of content uploaded every minute and one billion hours of content watched every day. This immense audience supports thousands of independent creators. The number of channels with more than one million subscribers has grown by more than 75% year on year, and the number of channels earning five figures per year more than 50% year on year.24
In total, we estimate that YouTube advertising generated €260 million in 2018 for German content creators, while the top 10 YouTube creators on their own have received more than 16 billion views.
Two friends, Ian Zimmermann (21) and Tim Lehmann (20) run the video blog Gewitter im Kopf - Leben mit Tourette.
Ian suffers from Tourette's syndrome (TS), a neurodevelopmental disorder, causing motor and vocal tics. Over half a million people in Germany are affected by Tourette’s, since there is very little knowledge about this disorder, they often suffer from societal exclusion.
The channel brings to life the symptoms of TS with humour and creativity, examining the unpleasant situations it can create for those who suffer from it and and the impact that is can have on their daily lives.
The channel has grown incredibly quickly: its first video was uploaded in February 2019, and by May the channel had already reached one million subscribers.
The channel has been featured in several news articles (Der Tagesspiegel, heute.at) some of them with in-depth interviews with Ian. Galileo created a short documentary about Ian featured on ProSieben.
The value of Google products in the economy
In this chapter, we have explored some of the ways in which Google products help people at work and in business: connecting businesses and customers, increasing productivity and skills, and enabling entirely new markets and eco-systems.
In total, we estimate that Google products support at least €30 bn of economic activity. As a company, Google’s primary source of revenue is advertising, and the bulk of the value we have identified comes from Search and Google Ads (€28.5 bn).
Using standard economic multipliers, this is the equivalent of €14.2 billion in GVA, or supporting 100,000 jobs. That is equivalent to 0.5% of German GVA, or around the same size as the agriculture industry (€17 bn) or half the size of the pharmaceutical industry (€26 billion) in Germany.
Over the last five years, the economic activity driven by Google Search and Ads has grown by 60% in nominal terms, and building upon PWC forecasts, we expect it has the potential to continue to grow by around 5% a year.
Google Search and Ads Economic Impact in Germany
This is likely to be an underestimate of the true economic impact of Google in Germany. Beyond the value of the ecosystems supported by Google products - worth €1.2 billion in 2018 - we have not tried to fully quantify the value of the productivity driven by Google Search, Google Maps, G Suite and other products.
Given the significant number of workers and business who in our polling said they now used and relied on Google products, this is likely to be substantial. As a rough estimate, using conservative assumptions building upon the data from our polling the productivity benefits from Google Search and G Suite alone could be worth €30 billion or over a year for the German economy.25 Moving forward, as AI and machine learning become increasingly integrated into Google’s products, this value could substantially increase.
Helping strengthen society
The invention of the printing press has been described as one of the most “revolutionary innovations in human history” 26- in Mark Twain’s phrase, “what is today, good or bad, it owes to Gutenberg.” In the hundred years following its invention, the number of books published increased by a factor of ten.27 By democratising access to information, the printing print helped bring about entirely new forms such as the novel, and catalyse much of the changes that were eventually to bring about the modern world, including the scientific revolution, the Enlightenment and the Reformation.
Information is the ultimate public good: no matter how much you use, it still remains available for the rest of us to use. Many of the benefits of greater access to information do not go to any particular individual or business, but to the rest of the society as a whole.
Just as it would be next to impossible to quantify the impact of the printing press on the modern world, many of the impacts on society of the Internet and Google products more specifically are hard to measure. The full impacts of a digitally literate society are likely only to be be obvious decades, if not centuries, from now. Nevertheless, there is substantial evidence that Google products are already having a positive impact on society.
In order to better understand the value created by Google’s products for society, we looked at three key ways in which Google’s products support democracy, inclusion and sustainability:
- Supporting a well-informed, democratic society. Using Google’s tools helps voters read a more diverse range of news sources and learn more about the background behind the issues;
- Giving under-represented groups equal access to the world’s knowledge. Unlike many other forms of knowledge, Google’s products are used by nearly everyone, no matter their age, income or background.
Helping individuals and businesses reduce their carbon footprint. Help improve environmental efficiency, sustainability and lower carbon emissions.
Supporting the democratic process
It’s vital that people choose to vote, and that they are active, informed citizens who understand what is happening locally, nationally, and across the world.
We found from our polling that Search has become one of the most important ways people achieve this. 63% of people have used Search to find out about a local political candidate in a recent election, and 34% used it to find where they need to vote.
People also use Search to become more informed about the world. The majority of Germans in every age group use Google Search to find news articles.
Search is now ranked as among the most trusted source of news, helping point Germans to other sources of news. 48% of those we polled say they can now read or watch from a wider variety of sources than before the internet.
TEMP***** Use Google Search to keep up with the news
One of the other benefits of Search is that it allows consumers to find news from more than a few days ago – something that was next to impossible before the internet. 56% of people agree that the internet makes it easier to find news stories or features that are more than a few days old
Because of access to internet I agree that...
Promoting diversity and inclusion.
Google products are used by people of all incomes, ages, and gender
Many social goods are used more by people from wealthier backgrounds, or show gender gaps. That does not seem to be true of Google products. One of the interesting findings from our polling is that Search is used by everyone: there is only a 1% difference in Search use between the wealthiest and least wealthy. We also see very similar patterns across Google products between men and women.
Google products usage by gender (at least monthly)
We also see people of all ages use Google products. While it is true that young people are particularly likely to use YouTube, for example, even people of retirement age are very heavy users of Google products.
Google product usage by age (at least monthly)
Inspiring the next generation of women to follow a career in computer programming
By the time Sophie Charlotte Keunecke was 12, she had already built her first robot. When she finished school, Sophie Charlotte decided to follow her passion and study mechatronics at university. It’s a choice that, according to her, still surprises many people. “They usually react by saying: ‘wow, as a woman … that's cool’, but most of them think it's not normal. And I think it's a shame that it's not considered normal.”
At university Sophie Charlotte discovered Open Roberta, an online platform developed by German research institution Fraunhofer IAIS and supported by Google in Germany, to grant greater access for people to learn about programming. As part of her course, she used the platform to further enhance her programming skills. “Open Roberta definitely helped me learn more about advanced robot systems. It really opened my eyes because it presents complex situations in a simple way.” Sophie Charlotte now uses it to teach female students in schools about robotics, hoping to inspire them to follow a career path in programming. “It doesn’t matter if you are a boy or a girl, what matters is what you want to achieve and what you are willing to do to get there,” she says. “Once you start learning about robots, you can't stop. And the best thing about it is that it enables you to achieve anything.”
Becoming more sustainable
Google products help people and businesses reduce CO2 emissions
By making us more efficient, Google products help reduce our environmental impact and increase our sustainability: Google Maps reduces the amount of time spent in a car; as it is easier to work from home because of internet services, we reduce commuting time and environmental cost.
From our polling we know people use Google Search to be responsible, environmentally friendly citizens. 33% of people - and 62% of 18-24 year olds - have researched their own environmental impact in the last year.
Google Maps reduces the amount of time people spend in a car because users change travel patterns. It can also make it easier for people to walk - confident that they won’t get lost. In Germany, the time saved by Google Maps saves 160,000 tonnes of CO2 emissions a year - the equivalent of flying around the world more than 58,000 times.
Google tools make it easier - as our business polling showed - for people to work from home. This reduces commuting time and environmental impact. If the average German employee works from home for an extra day a month, this by itself saves X million tonnes in CO2 emissions a year.
Google Search and YouTube help people understand the environment and their impact on it. From our polling we know people use Google Search to be responsible, environmentally friendly citizens. 51% of online Germans have researched their own environmental impact in the last year.
Percent using Google Search to research their environmental impact
Google is a sustainable business
As an employer, Google works to be sustainable. Google data centres use 50% less energy than the average, and use 100% renewable energy across operations. Google data centres also work with the supply chain to reduce environmental impact.
Google Earth/Global warming
Google’s work for good
Google.org has a global, five-year goal to award $1 billion in grants and contribute 1 million employee volunteer hours. It works across education, economic opportunity, and inclusion and finds partners and programmes in different countries that will help people and businesses. Throughout this document some of the relevant programmes supported by Google have been highlighted.
GIC general overview:
The Google.org Impact Challenge asks local nonprofit innovators and social entrepreneurs how they would make their community—and beyond—an even better place. The public and a panel of local judges vote for the ideas with the most potential, and Google.org pairs each winner with a strategic package of support including funding and Google volunteers.
Safety Impact Challenge:
When it comes to keeping people safe, it takes a village. For us, that means doing all we can to make our products safer and giving people the tools—through our products or training—to have great experiences online. It also means thinking beyond just our corner of the internet and supporting the work of others in Europe.That is why we’ve launched the Google.org Impact Challenge on Safety, a €10m fund to support nonprofits and social enterprises across Europe that are working to counter hate and extremism and are helping young people to thrive online and offline.
We ran our second German Impact Challenge last year and awarded a total of €5M to more than 60 German nonprofit organizations with innovative ideas to create social impact in their community. As part of the Google Impact Challenge award, challenge winners receive not only funding but also Google volunteer support .German Googlers have supported the Challenge winners with mentorship and have initiated projects with other employees across the company to support nonprofits with whichever skills they needed to implement their projects. Example Karuna in here: https://docs.google.com/document/d/1JSaZratXulnEBI0T0dm6bqOICrLW9wleFxC30XA8omc/edit?usp=sharing
Google’s philanthropy projects
Calculating the overall impact of Google
How can we estimate the total impact created by digital products and services like Google on the German economy, society and standard of living?
Traditional economic impact studies have tended to focus on the impact of a company or product on GDP. GDP itself, however, has never included everything we value or every type of work we do. Taken literally, GDP takes no account of changes in our leisure time or the amount of work we do in non-market roles, such as housework or family care.
For the most part, this hasn’t mattered too much - there is reasonable evidence that GDP is highly correlated with the other things that we care about, such as a clean environment or overall happiness. GDP might not measure all that mattered, but it made a reasonable stand-in.
If there is one thing that is striking about the digital economy to an economist, however, it is how much of it is free. The world’s seven most popular websites - Google, YouTube, Facebook, Baidu, Wikipedia, Reddit and Yahoo!28 – are all offered without charge. As many estimates have calculated, the modern smartphone replaces what once would could have been dozens of separate devices costing thousands of pounds, including phone, camera, video camera, games console, alarm clock, map, satnav, book, television, DVD player, Walkman, stopwatch, torch, debit card, compact mirror, step tracker, portable speaker and compass.
At the same time, as we have explored throughout this paper, digital services are increasingly both saving us time in our non-market work - making it easier to do housework or DIY - and substituting for jobs that once we might have paid someone to do for us, such as booking a flight or holiday, and enabling completing new types of career.
The combination of a lack of prices and the fact that many digital services are a completely new type of good - there is no real non digital equivalent to a search engine - makes it much more challenging for economists and statisticians to estimate how much they matter to consumers.
Nevertheless, economists have developed multiple methods that allow us to estimate how much value – or consumer surplus – is created by unpriced goods, which in this paper we have applied in turn to Google’s products, including:
- Using time or attention as a proxy for the cost we are prepared to pay for digital goods. Money is not the only cost we have to pay to use a good or service – our time is valuable too. According to our poll, the average online German estimates that they spend just under an hour a day on their smartphone. This time carries a significant opportunity cost of everything else we could be doing either for leisure or our job – suggesting that we must find the digital service at least as valuable as the alternative.
- Asking individuals to estimate the amount they would be hypothetically willing to pay for a free service – or alternatively, what they would be willing to accept to give it up. For decades, economists and social scientists have experimented with the best way to ask individuals about their preferences over unpriced goods, such as a natural park or clean air. When designed right, these surveys can deliver surprisingly results. In the future, the arrival of new mass online polling solutions such as Google Consumer Surveys and big data enabled by the internet could potentially allow us to significantly improve the accuracy, speed and reliability of our economic statistics – allowing us to better measure what as individuals we really care about.
- Comparing preferences for a free good against another good which has a price attached. Finally, rather than try and construct a hypothetical price – something we rarely do in real life – we often find it easier to compare between different items: would people rather give up their washing machine or dishwasher? By comparing items with prices to those that are unpriced, we can produce a ranking, and bracket how valuable the free good must be.
While we have tried to directly estimate the time saved by Google services whenever possible, on other occasions we have had to rely on stated preferences, as has long been common practice in other areas where valuation is challenging, such as environmental economics. These estimates work by asking individuals whether they would be prepared to lose access to a particular product for varying amounts of money - and assuming that if they reject this deal, the service must be worth at least that amount. Other research has found that these kind of estimates give a reasonably reliable estimate of the value created by digital services (see Box) - with survey respondents providing similar responses even when there is a real, non-hypothetical risk of losing access if they did not provide an accurate estimate.
As a sense check, we also asked our polling recipients to rank Search, YouTube and their smartphone against other consumer goods by which they would most want to avoiding giving up - finding that, on average, internet connected Germans would rather lose access to public transport than their smartphone or a search engine.
Another question might be what we are measuring against: if Google didn’t exist, how would the world look different? Presumably another search engine would be the market leader - but how would its quality differ? Given the scale of the consumer surplus we found, an alternative only 10% worse would lead to significant reductions in consumer welfare. For the most part, in our polling we always asked those we surveyed the value of a specific Google product rather than a generic category - leaving them the hypothetical option to switch to a competitor even if they lost access to Google’s product. This makes our study different from many of the other studies that have been done on the value of digital products, and given the high values we found, suggest that many people significantly value Google’s services.
In total, our estimates suggest that a conservative estimate of the total consumer surplus created by Google services in Germany is €114 billion a year or €540 per year for the median person. We believe this work supports the growing evidence in the literature that digital services are creating significant unmeasured value for ordinary findings. While our estimate is already a large number, other studies have found that the value of online search by itself could be as high as €15,600 per person a year.29
Other estimates of the consumer value created by the digital economy
Depending on their methodology and assumptions, the estimates of the value produced by the online economy can vary by many orders of magnitude. In general, however, even the more modest estimates find that online services are creating significant surplus value beyond what their users directly pay.
Goolsbee and Klenow’s paper Valuing Consumer Products by the Time Spent Using Them: An Application to the Internet (2006) uses the opportunity cost of the leisure time spent on the Internet to estimate a total consumer surplus equivalent to $3,000 on average in the US.McKinsey’s report The Web’s €100 billion surplus (2011)30 used stated preference methods to calculate the total consumer surplus created by online services, netting off consumers preference to avoid advertising or sharing their data. Their estimates found that search created a monthly consumer surplus equivalent to €3.1, for email €3.2, maps €1.1 and video €0.9.
Brynjolfsson and Oh’s paper The Attention Economy: Measuring the Value of Free Digital Services on the Internet (2012) 31 updated the methodology of Goolsbee and Klenow (2006) to account for that the Internet might simply be substituting for watching TV, finding that free online sites create the equivalent of around $500 per person in consumer surplus.
Brynjolfsson, Eggers and Gannameni’s paper Using Massive Online Choice Experiments to Measure Changes in Well-Being (2017) used online surveys to test both willingness to accept compensation in place of digital goods and to create a ranking of different goods. They find significantly higher numbers, with a consumer surplus for search the equivalent of $17,500 a year, for email $8,400, maps $3,600 and video $1,170. In order to test the reliability of these hypothetical numbers, they run a smaller scale experiment where they actually make some people go through with giving up the online service – and find this creates little change in valuation. In addition, they run a ranking experiment, and find that giving up search engines, email and smartphones are all ranked somewhere between the equivalent of losing $500 to $1000 a year.
As described in the main report, accurately estimating the value created by digital products is extremely challenging – and this is particularly true for products that are free at the point of use, are used widely across the economy, and contain elements of both consumption and production, as is true for many Google products.
While we believe our estimates are based on conservative assumptions, it is worth being aware of their limitations:
- Many of our estimates are based on the gross impact of Google’s products, as it is hard to accurately quantify what a counterfactual world without Google would look like.
- Conversely, in some cases we have not been able to fully quantify all the impacts created by Google products, suggesting that our estimates should be viewed as a lower bound.
- Many of our estimates make use of new polling carried out for this report – but as in any poll, consumers may underestimate or overestimate their use of products. (Full polling tables for data used in this report are available in an online appendix.)
- Best practice in many of these areas, such as valuing an hour of leisure time or using stated preferences to calculate consumer surplus, remains an area of active academic debate.
- Google did not provide any new or internal data to generate these estimates. All our modelling is based on third-party or public data, alongside our own internal estimates.
Our headline estimate of the total consumer surplus of Google Search is calculated as the geometric average of:
- Time saved. Following the methodology of Varian (2011), we assume that using Google saves 15 minutes per question, with the average person asking 1 answerable question every 2 days. Time saved is valued at the self-reported polling data of average incomes, and we scale the overall estimate by third party estimates of Internet prevalence and polling information on Google Search usage. (More information of this overall approach can be found in the Economic Value of Google, a presentation by Google Chief Economist Hal Varian.)
- Stated preference (Willingness to Accept). As part of our polling, we asked participants a single discrete binary choice question of “Would you prefer to keep access to Google Search or go without access to Google Search for one month and get paid [Price]” with the price offered randomised between €1.25, €2.5, €5, €10, €20, €50, €100, €200 and €500. We linearly regressed the results of this poll to derive a demand curve and used this to calculate total consumer surplus per user. Finally, we scaled this estimate by third party estimates of Internet prevalence and polling information on Google Search usage.
Following Brynjolfsson et al (2017), we chose a Willingness to Accept (WTA) rather than Willingness to Pay format for our Stated Preference question as we believed this best matched the status quo, given that the majority of Google Services are free to the end user and required no up-front investment.
As with many other products, the mean consumer surplus is significantly higher than the median – or, in other words, a few dedicated users use it disproportionately more than the average.
In order to ensure that our household level figures were not misleading, we based them not on the mean household value for WTA compensation, but instead a separate estimate of the median WTA. We derived this by regressing our polling data again, using an exponential method which we judged was more likely to accurately represent the bottom of the distribution.
Our headline estimate of the total consumer surplus of Google Maps is calculated as the geometric average of:
- Time saved. We calculate time saved by Google Maps, using estimates of time saved by advanced traveler information systems from Levinson (2003) and total time spent travelling by mode from our polling, calibrated by German Labour Force Survey data on the total time spent commuting. Time saved is valued at 37.5% of the estimated hourly income of Google Maps users, following standard practice for calculating the value of travel time savings.
- Stated preference. As with Google Search, we asked the participants of our poll a single discrete binary choice question of “Would you prefer to keep access to Google Maps or go without access to Google Maps for one month and get paid [Price]” with the price offered randomised between €1.25, €2.5, €5, €10, €20, €50, €100, €200 and €500. We linearly regressed the results of this poll to derive a demand curve and used this to calculate total consumer surplus per user. Finally, we scaled this estimate by third party estimates of Internet prevalence and polling information on Google Maps usage. In addition, we constructed a separate estimate of the median WTA compensation for losing Google Maps which we used for our per person and household estimates.
Our headline estimate of the total consumer surplus of Google Search is calculated as the geometric average of:
- Time saved. Extrapolating from the methodology Varian (2011), we assume that using YouTube saves 11 minutes per question, using self-reporting polling data to calibrate the number of questions asked. Time saved is valued at the self-reported polling data of average incomes, and we scale the overall estimate by third party estimates of Internet prevalence and polling information on YouTube usage.
- Stated preference (Willingness to Accept). As part of our polling, we asked participants a single discrete binary choice question of “Would you prefer to keep access to YouTube or go without access to Google Search for one month and get paid [Price]” with the price offered randomised between€1.25, €2.5, €5, €10, €20, €50, €100, €200 and €500. We linearly regressed the results of this poll to derive a demand curve and used this to calculate total consumer surplus per user. Finally, we scaled this estimate by third party estimates of Internet prevalence and polling information on Google Search usage.
Gmail and Google Docs
Given that we had no time saving estimates for these products, we instead relied on estimates drawn again from stated preferences, following again the same procedure. We asked the participants of our poll a single discrete binary choice question of “Would you prefer to keep access to [Gmail / Google Docs] or go without access to [Gmail / Google Docs] for one month and get paid [Price]” with the price offered randomised between €1.25, €2.5, €5, €10, €20, €50, €100, €200 and €500. We linearly regressed the results of this poll to derive a demand curve and used this to calculate total consumer surplus per user. Finally, we scaled these estimates by third party estimates of Internet prevalence and polling information on each product’s usage. In addition, we constructed a separate estimate of the median WTA compensation for each product which we used for quoted per person and household estimates.
In addition to measuring the consumer surplus individuals received for individual Google services, we also investigated the overall consumer surplus Germans receive from their smartphone.
We asked the participants of our poll a single discrete binary choice question of “Would you prefer to keep access to your smartphone or go without access to your smartphone for one month and get paid [Price]” with the price offered randomised between €1.25, €2.5, €5, €10, €20, €50, €100, €200 and €500.
We then scaled this number by Android’s market share in Germany and Lee (2016)’s estimate of the proportion of net smartphone consumer surplus, excluding substitution value.
Given the overlap with individual services - one reason we value our phone is because it allows us to access Search, Maps, Gmail or YouTube - and the challenges in decomposing the value attributable to software and hardware, we did not include this estimate in our number for the overall value created by Google in Germany.
Following the precedent of past Google impact reports, we use third-party data to estimate the total size of the German Google Ads market, combining PWC Global Entertainment & Media Outlook data on the total German paid search market with other estimates of Google’s market share.
Following the methodology of the US Google Economic Impact Report, we then scale this revenue by an assumed Return on Investment (ROI) factor of 8, from:
- Varian (2009) estimates that businesses make on average $2 for every $1 they spend of AdWords.
- Jansen and Spink (2009) estimate that businesses receive 5 clicks on their search results for every 1 click on their ads.
- Google estimates that search clicks are about 70% as valuable as ad clicks.
- Total ROI is then 2 * spend + 70% * 5 * 2 * spend – spend = 8 (spend).
More information on this methodology is available at https://economicimpact.google.com/methodology/
In order to estimate total German Adsense revenues, we scale Google’s 2018 global Traffic Acquisition Costs to network members by Germany’s share of global display spending, derived from PWC Global Entertainment & Media Outlook data. In addition, we also include the estimated returns to advertisers, drawing on the estimated ROI of display advertising from Kireyev et al (2013).
In order to estimate total German revenues to German creators, we scale PWC Global Entertainment & Media Outlook data on German video advertising revenue by Google’s 2018 global Traffic Acquisition Costs to network members by Sandvine data on YouTube’s 2017 EMEA share of video bandwidth. We then further scale this by an assumed conservative ROI factor.
We scale App Annie (2019) 2018 data on worldwide app store consumer spend and Android revenue share by Caribou Digital (2016)’s estimate of the German share of total app store value captured.
We draw on McKinsey Global Institute (2017) estimates of the proportion of automatable jobs in Germany, and conservatively assume that combined software and hardware costs for automated task converge to 10% of the cost of human labour. Next, we assume that automation takes place over 50 years, following a logistic S-curve, with German state of adoption proxied by its current lag in internet adoption with the US.
In order to estimate the potential impact on administrative tasks, we draw on polling data on average time spent on administrative work.
- Including Google Economic Impact (US, 2019, Google), Google’s Impact in the UK: At Home, At School At Work (UK, 2018, Public First), Google’s Economic Impact (Canada, 2018, Deloitte),Google Economic and Social Impact (New Zealand, 2017, AlphaBeta), Google Economic and Social Impact (Australia, 2015, AlphaBeta) and Google’s Economic Impact: United Kingdom (UK, 2014, Deloitte)
- 17 hours in length;
- See, for example,https://webarchive.nationalarchives.gov.uk/20160107224314/http://www.ons.gov.uk/ons/dcp171766_351954.pdf, https://hbr.org/2017/05/reclaim-your-commute and https://www.inc.com/business-insider/study-reveals-commute-time-impacts-job-satisfaction.html
- https://ourworldindata.org/happiness-and-friends, https://www.youtube.com/watch?v=8KkKuTCFvzI&feature=youtu.be
- https://www.jstor.org/stable/20865386?seq=1#page_scan_tab_contents https://pdfs.semanticscholar.org/7dab/41504f61a8f85fc83c26e6700aad34a251c5.pdf2
- Using Massive Online Choice Experiments to Measure Changes in Well-Being, Brynjolfsson, Eggers and Gannameni, 2017
- Some of this value overlaps with the consumer surplus from Google’s other core products such as Search or YouTube. As such, we have not included it in the total value.
- The Attention Economy: Measuring the Value of Free Digital Services on the Internet, Brynjolfsson and Oh, 2012, https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1045&context=icis2012
- Public First calculation drawing on The Conference Board data and Spieza (2012)
- The Total Economic Impact of Google Apps for Work, Forrester Consulting, 2015, http://www.ditoweb.com/wp-content/uploads/2017/01/The-Total-Economic-Impact%E2%84%A2-of-Google-Apps-for-Work-Forrester-2015.pdf
- Store Intelligence Data Digest Q4 and Full Year 2018, Sensor Tower
- The State of Mobile 2019, App Annie
- See, for example here or here
- https://www.youtube.com/yt/about/press/ and https://www.statista.com/statistics/259477/hours-of-video-uploaded-to-youtube-every-minute/
- Assuming half of German workers use Google Search on a weekly basis, and a quarter of workers use G Suite. Based upon work by Forrester Consulting, we assume each user of G Suite saves between 15 minutes and 2 hours each a week. We conservatively assume that workers research one question through Google Search a week, and that this saves them 15 minutes. Total time saved is converted into a monetary amount using German average output per hour.
- Using Massive Online Choice Experiments to Measure Changes in Well-Being, Brynjolfsson, Eggers and Gannameni, 2017
- The Web’s €100 billion surplus, McKinsey, 2011, https://www.mckinsey.com/industries/media-and-entertainment/our-insights/the-webs--and-8364100-billion-surplus
- The Attention Economy: Measuring the Value of Free Digital Services on the Internet, Brynjolfsson and Oh, 2012, https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1045&context=icis2012