Analysis from the Ifo Institute reveals a notable difference in the implementation of Artificial Intelligence (AI) between Eastern and Western Germany. Although AI usage has seen substantial growth in Eastern Germany between 2023 and 2026, fewer companies there are actively employing it compared to their Western counterparts. According to Ifo researcher Robert Lehmann, the proportion of businesses viewing AI as “not an issue” remains higher in the East than in the West.
Overall, more than half of German companies now actively utilize AI; however, the report indicates that only slightly less than two out of five firms in Eastern Germany have adopted the technology. This places the Eastern German economy at the level that Western Germany held just one year ago.
Joachim Ragnitz, co-author of the study, noted that this deficit is evident across every economic sector and across all Eastern German states. He stated that this demonstrates that businesses are not yet fully capitalizing on the productivity-enhancing opportunities associated with AI. Ragnitz added that the structured lag in Eastern Germany regarding the adoption of new technologies is clearly visible in the AI sector. He suggested that the potential for narrowing this gap in the future largely depends on the efforts of small and medium-sized enterprises.
