In 2010, Germany adopted its first 10-year digital transformation strategy, Digital Agenda for Europe, in order to secure the provision of high-speed Internet connections for all its households and to promote entrepreneurship. However, the goals voiced in the first edition of the European broadband development plan (and, subsequently, in national plans) were rather ambitious, given the spatial varieties between different EU members, rural and more urbanized areas. That may explain why existing studies for European countries provide mixed outcomes, highlighting the positive role of broadband development, but arguing its limited effect for declining and rural areas. Our contribution to understanding the role of recent digital transformations is twofold. First, for German counties and independent states, we were able to support the view that better penetration of broadband contributes positively to the firm dynamics, both in rural and urbanized areas. Second, we admit that the digital infrastructure may not be sufficient by default, and individuals do need to possess the relevant-to-market skills so that the society may benefit from augmented broadband externalities. We suggest that further policies have to target on better complementarity between relevant skills and digital transformation and not just each component isolatedly.