A part of capital formation is the investment in infrastructure. Chapter 9.2.3 will discuss, infrastructure contains several aspects, shaping the environment (business as well as private) for an economy. One of the most important sub-categories of infrastructure is related to traffic and transport44. In order to
provide a comprehensive view of traffic infrastructure, data on (gross) capital formation, as well as on fixed assets and the degree of modernity are displayed. In general, gross and net values are connected by the effect of depreciation. It also implies that positive net capital formation is in need to (at least) maintain the current capital stock. The following figures, with data taken from Bundesministerium für Verkehr und Digitale Infrastruktur (2018b), are set up for the time interval of 1999 to 2016 and are calculated and presented in 2010-€ so that price effects do not play a role. For an analysis of traffic and infrastructure, many components are likely to be chosen. For the purpose of the present study, the overall traffic category, as well as the sub-category roads and bridges, are shown, as the latter one plays the most significant role for the business environment with regard to transport conditions. Numbers for 2016, marked with asterisks, contain provisional values but should not distort overall conclusions on the trend.
Figure 21 shows gross capital formation. In line with the general investment behaviour in Germany over the last decades, gross capital formation in traffic infrastructure, as well as for the sub-category roads and bridges, exhibits a declining trend. Peaking at the beginning of the 2000s (total traffic: €37.774 mil. in 2002), the lowest value has been marked in 2015 (total traffic: €29.264 mil.).
44Another important sub-category is related to human capital and the educational system. Chapters 8.6 and 9.2.5
Figure 21: Gross Capital Formation (traffic, in 2010 prices) 1999-2016. Source: Bundesministerium für Verkehr und Digitale Infrastruktur (2018b); own illustration.
10.000
15.000
20.000
25.000
30.000
35.000
40.000
1999
2001
2003
2005
2007
2009
2011
2013
2015
M
il
.
€
Roads and Bridges
Total
Simply taking capital formation for an evaluation is not sufficient. Fixed assets represent the capital stock of an economy - and in this case the traffic infrastructure for Germany. Figure 22 shows the gross values, figure 23 the net values. Whereas the gross capital stock shows a constant or even slightly increasing trend, the net capital stock interestingly provides a declining trend. For an evaluation of the infrastructure capital stock, net values are more meaningful, as depreciation seems to play a significant role. Net fixed assets have peaked in 2011 (total traffic: €698.127 mil.), and declined since then (€690.413 mil. in 2016).
Figure 22: Fixed Assets Traffic (gross) (in Mil. Euro, in 2010 prices) 1999-2016. Source: Bundesmin- isterium für Verkehr und Digitale Infrastruktur (2018b); own illustration.
500.000
600.000
700.000
800.000
900.000
1.000.000
1.100.000
1.200.000
1999
2001
2003
2005
2007
2009
2011
2013
2015
M
il
.
€
Figure 23: Fixed Assets Traffic (net) (Mil. Euro, in 2010 prices) 1999-2016. Source: Bundesminis- terium für Verkehr und Digitale Infrastruktur (2018b); own illustration.
350.000 400.000 450.000 500.000 550.000 600.000 650.000 700.000 750.000 1999 2001 2003 2005 2007 2009 2011 2013 2015 M io . €
Roads and Bridges Total
More obvious is the degree of modernity of fixed assets with regard to traffic. Figure 24 shows the degree of modernity for traffic infrastructure in total and for roads and bridges. Over time, there has been a drop in the degree of modernity for both categories. Total infrastructure after 2005 dropped from 66 to 63, roads and bridges from 68 (1999) to 65 (2016). The implications are obvious - there has been insufficient investment; insufficient insofar as it was not even able to fulfil the needs of depreciation.
Figure 24: Degree of Modernity 1999-2016. Source: Bundesministerium für Verkehr und Digitale Infrastruktur (2018b); own illustration.
62
63
64
65
66
67
68
69
1999
2001
2003
2005
2007
2009
2011
2013
2015
%
Roads and Bridges
Total
Special Case: Digital Infrastructure
In order to be prepared for technological developments and challenges of the 21st century, in addi- tion, there is the need to provide a sufficient level of digital infrastructure. Digital infrastructure includes many aspects. Probably the most important one is related to data transfer. Best illustrated as broadband coverage and the speed of internet accessible to households and companies. Broadband technologies, in fact, is a notion, which includes wired and wireless technologies, other than smallband technologies (the ones used at the early stage of digitalization back in the end of the 20th century). In- ternet technologies, which can be summed up under the broadband notion are Digital Subscriber Line
(DSL), Fiber, mobile communications45, (TV-) cable solutions and satellite technologies46. Unfortu-
nately, no common international standard exists for the exact definition of broadband with regard to speed benchmarks (in comparison to smallband technologies). According to the International Telecom- munication Union (ITU), technologies belong to the broadband category if they exceed data transfer speed of 256 kilobits per second. It is the definition, the Statistisches Bundesamt makes use of, too (see Statistisches Bundesamt (2019d)).
In Germany, most households are equipped with broadband access. Around ten years ago, just every second household (50% in 2008) had access to broadband technology, nowadays (2018) it is 86% of all households in Germany (Source: Statistisches Bundesamt (2019a)).
Another potential variable is “Fixed broadband subscriptions per 100 inhabitants” from the ITU (Source: International Telecommunication Union (ITU) Database (2019)). It can be used as another proxy for the evaluation of broadband coverage in Germany. Figure 25 shows the trends for several countries with regard to fixed broadband subscriptions per 100 inhabitants.
45Mobile communications in international standards is measured and labelled with notions from 1G to 5G and rep-
resents a generation of mobile communication technologies. Whereas 1G was associated with the very beginnings and included analogue technologies, going back to the end 1950s, 5G is the latest version and should be available by 2020. It is expected to provide speed of up to 20 gigabits per second (in comparison to 10-15 kilobit per second of the 2G-technology) (Source: <<https://www.techbook.de/mobile/smartphones/lte-4g-unterschied-mobil-smartphone>>).
46For a definition of broadband and its sub-categories please see Bundesministerium für Verkehr und Digitale Infras-
Figure 25: Fixed broadband Subscriptions per 100 Inhabitants, 2000-2017. Source: International Telecommunication Union (ITU) Database (2019); own illustration.
0 5 10 15 20 25 30 35 40 45 200020012002200320042005200620072008200920102011201220132014201520162017 %
Germany USA France Finland Rep. of Korea
Except for the Republic of Korea (8.17%), almost all countries chosen started with zero in 2000 (Germany: 0.33%). Germany showed a steady increase of up to 40.47% in 2017, whereas the US fell behind to 33.85% (2017). Remarkable is the case of Finland for the previous years. Nordic countries usually show leadership roles when it comes to technology and innovation. Finland started strongly and was the first of the five countries overshooting the 30%-mark (2007) but then merely stagnated since then (2017: 30.95%).
For more data and further elaboration on the requirements and implications in the course of the new wave of technological progress, please see chapter 9.2.3.