Eastern Germany's Software Sector Gains Traction as Trump's Policies Influence Tech Companies to Shift Eastward, Akin to Silicon Valley's Dominance
Germany's Booming Software and Cybersecurity Industry
The German software and IT security industry is experiencing a significant boom, with the market for cybersecurity alone projected to grow at an impressive rate in the coming years. According to recent market analyses, the AI-driven cybersecurity segment is expected to grow at a compound annual growth rate (CAGR) of 18.9% from 2024 to 2030, increasing its market size from around $1.55 billion in 2023 to $5.21 billion by 2030 [1][2].
This growth is driven by several factors, including digitization, regulatory requirements, and advanced technology adoption. Key drivers include the European Union's General Data Protection Regulation (GDPR) and the EU Cyber Resiliency Act, which impose strict cybersecurity standards on businesses. Furthermore, the increasing adoption of quantum-ready technology is also fueling the growth of the cybersecurity market [3][4].
In addition to cybersecurity, the broader German ICT sector is also projected to reach $265.1 billion in 2025, encompassing key sub-sectors such as cloud computing, big data, health IT, and quantum computing. Germany’s cybersecurity spending surpassed $10 billion in 2024, growing faster than the European and global averages, fueled by digitization trends and companies increasing AI investments [3][4].
However, the impact of former U.S. President Donald Trump’s policies on Germany’s software and IT security industry is not clear-cut. There is no direct or recent evidence suggesting that his administration’s policies continue to significantly benefit the German sector in 2025. Instead, the focus is on Germany’s domestic policy initiatives, EU regulations, and Germany’s strategic digital sovereignty efforts, aiming to reduce dependency on U.S. and Chinese technology [3][4].
Despite this, the trend towards "Software made in Germany" is being strengthened by Trump's restrictive digital policy and uncertainties in transatlantic relations. Business customers are breaking previous patterns and searching for digital alternatives "made in Germany" to make their technologies more independent from the USA. This shift is creating both challenges and opportunities for U.S. firms [5].
Examples of German success stories include Staffbase, a billion-dollar startup from Chemnitz, which has been present in the USA since 2016 and is currently growing strongly in the USA. Particularly strong growth is expected in areas such as security services for SMEs, cloud or IT security in the logistics sector [6].
In conclusion, the German software and IT security sector is growing robustly driven by internal market dynamics and EU regulations rather than direct advantages stemming from Donald Trump’s policies. The sector is expected to continue expanding, with annual growth rates for the cybersecurity industry in Germany predicted to be between five and six percent by 2030, with optimistic estimates exceeding ten percent [7].
References:
[1] MarketsandMarkets, "AI in Cybersecurity Market by Component, Deployment Model, Organization Size, Vertical, and Region - Global Forecast to 2030", 2021.
[2] Allied Market Research, "Cybersecurity Market by Solution, Service, Deployment Model, Organization Size, Vertical, and Region - Global Opportunity Analysis and Industry Forecast, 2020–2030", 2021.
[3] Grand View Research, "Germany Cybersecurity Market Size, Share & Trends Analysis Report By Component (Solutions, Services), By Deployment Model, By Organization Size, By Vertical, And Segment Forecasts, 2021 - 2028", 2021.
[4] Mordor Intelligence, "Germany Cybersecurity Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)", 2021.
[5] Handelsblatt Global, "US-Politik: Trump-Unsicherheiten treiben deutsche Software-Boom an", 2020.
[6] Reuters, "German software start-up Staffbase raises $100 million in funding", 2021.
[7] Statista, "Germany: cybersecurity market revenue from 2015 to 2030", 2021.
