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Using a unique German firm-level data set, we provide empirical evidence for a productivity sorting along two dimensions: international activity and technology choice. We consider domestic and exporting firms and measure technology choice by firms' actual use of advanced information technology (IT). For manufacturing firms, the observed sorting pattern is consistent with recent theories of heterogeneous firms and technology choice: Only the relatively more productive ones among internationally active firms are also highly technology intensive. For service sector firms we find similar evidence, yet the results seem to depend on the trade cost of certain services. In general, recent theoretical advances regarding trade and technology adoption thus seem to better fit the manufacturing sector.

The paper provides empirical evidence for the question whether firms' ITenabled labour productivity is affected by the age structure of the workforce. We apply a production function approach with heterogenous labour to firmlevel data from German manufacturing and services industries. We find that workers older than 49 are not significantly less productive than prime age workers, whereas workers younger than 30 are significantly less productive than prime age workers. Older workers using a computer are significantly more productive than older non-computer users. The positive and significant relationship between labour productivity and IT intensity is not affected by the proportion of older workers.

Abstract
Artificial Intelligence (AI) is likely to be the next general purpose technology. The U.S. and China are important players in the development of AI. Germany has a vibrant AI startup scene and is among the first third of EU countries in applying AI technologies. In order not to lose touch with international developments, Germany should work toward creating research- and innovation-friendly framework conditions. Appropriate measures include improving data availability, building AI expertise and enabling flexible regulation.

Die Digitale Transformation gilt als eine der großen Herausforderungen unserer Zeit. Schnelles Internet, mobile Endgeräte, intelligente Softwarealgorithmen und die Speicherung und Verarbeitung großer Datenmengen verändern wirtschaftliche und gesellschaftliche Prozesse. Die zahlreichen Dimensionen der Digitalisierung machen die Transformation von Wirtschaft und Gesellschaft zu einem komplexen Unterfangen. Jedoch können die Chancen, die die Digitalisierung eröffnet, wie die Entwicklung neuer Produkte und Dienste oder die Steigerung der Produktivität, nur dann genutzt werden, wenn man sich den damit verbundenen Herausforderungen aktiv und gestalterisch stellt. Die neue Bundesregierung hat sich in ihrem Koalitionsvertrag zahlreiche und ambitionierte Ziele für die Digitalisierung gesetzt, die verschiedene gesellschaftliche und wirtschaftliche Bereiche und so gut wie alle Ministerien betreffen. Aus der Perspektive der Wirtschaft sind insbesondere drei Aspekte zentral: der weitere Ausbau der Breitbandinfrastruktur, die Unterstützung mittelständischer Unternehmen bei der Digitalisierung sowie die Stärkung digitaler Kompetenzen. In allen drei Bereichen hat Deutschland Nachholbedarf.

Customised products and services, flexible working arrangements, productivity growth, and increasing prosperity - these are just some of the advantages promised by a digitised and connected economy. Business managers and politicians are keen to reap the potential benefits of the digital transformation. Such a transformation of the economy, however, is a complex task which goes hand in hand with a significant number of challenges. Digital transformation brings about changes in production and innovation processes, in markets and working environments, and also has societal implications. In particular, there are widespread fears that the increased use of machines and robots for tasks previously completed by humans shall result in job losses. Actors at both European and national levels have launched numerous agendas, initiatives and directives in order to support the digital transformation. The Digital Agenda, part of the Europe 2020 Strategy consists of seven pillars (EU Commission, 2016a): i) Digital Single Market, ii) Interoperability & Standards, iii) Trust & Security, iv) Fast and ultra-fast Internet access, v) Research and innovation, vi) Enhancing digital literacy, skills and inclusion, vii) ICT-enabled benefits for EU society. These seven pillars comprise 132 actions ranging from simplifying Pan-European licensing for online works (action 1), to investing in High-Performance Computing (action 132).

We examine the link between Internet usage and political ignorance. We construct a novel Index as a direct measure of individuals' indifference with respect to political issues which determines the degree of individual political ignorance. Our econometric analysis is based on a rich data set consisting of six surveys of individuals covering the time period 2001 to 2014 and being representative for the German electorate. The empirical results show that in the earlier years of Internet diffusion there is a negative link between using the Internet and political ignorance. This link changes sign in later years of Internet diffusion. We discuss potential explanations of this observed change in the link such as information overload and the increase in heterogeneity of Internet users.