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GTAI and the German ICT Market

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Promoting Germany‘s advantages as a prime location for foreign investors in high-tech industries.

Promoting Germany‘s advantages as a prime location for foreign investors in high-tech industries.

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  • 1. Germany Trade & Invest Foreign Trade and Inward Investment Promotion AgencyGTAI and the German ICT MarketNovember 2009: NASSCOM Event
  • 2. Germany Trade & Invest
    Main Tasks
    Promoting Germany‘s advantages as a prime location for foreign investors in high-tech industries.
    Providing consultancy and support services for international businesses seeking to expand operations to Germany.
    Providing companies established in Germany with information about business opportunities in foreign markets.
    Collecting and processing economic data and information about industries, tender procedures, legal frameworks, and customs regulations in foreign markets.
  • 3. The Agency
    Two headquarters in Germany - 46 locations worldwide.
    Belgrade
    Budapest Bucharest
    Kiev
    Moscow
    Prague
    Riga
    Warsaw Zagreb
    Athens
    Brussels
    London
    Madrid
    Milan
    Paris
    Stockholm
    Bangkok
    Beijing
    Hanoi
    Hong Kong
    Jakarta
    Kuala Lumpur
    Mumbai
    New Delhi
    Seoul
    Shanghai
    Taipeh
    Tokyo
    Berlin
    Cologne
    Chicago
    New York
    San Francisco
    Toronto
    Washington
    Dubai
    Istanbul
    Tel Aviv
    Johannesburg
    Cairo
    Nairobi
    Tunis
    Buenos Aires
    Caracas
    Mexico City
    Santiago de Chile
    Sao Paulo
    Sydney
  • 4. Our Teams
    Germany Trade & Invest concentrates its market knowledge within a range of industry teams to best support the investor
    Chemicals & Healthcare
    - Chemical Industry and Polymers
    - Chemicals-Related Process Industry
    - New Materials/ Composite Materials
    - Red Biotech
    - Medical Devices Industry
    - Pharmaceuticals Industry
    Renewable Energies & Resources
    • Photovoltaics
    • 5. Energy Efficiency
    • 6. Renewable Resources and Bioenergy
    • 7. Energy Storage and Fuel Cells
    • 8. Solar Thermal Energy
    • 9. Geothermal Energy
    • 10. Wind Energy
    • 11. Waste to Energy, Recycling and Sustainable Water Resource Management
    Service Industries
    • Consumer Goods/Retail
    • 12. Food and Beverages
    • 13. Information and Communications Technology
    • 14. Business Services
    • 15. Transportation and Logistics
    • 16. Tourism
    Mechanical & Electronic Technologies
    • Electronics and Microtechnology
    • 17. Machinery and Equipment
    • 18. Transportation and Technologies
    - Applied Sciences and Technology Transfer
    Picture Credit: Helmholtz Centre Berlin for Materials and Energy; BMVBS/Amin Akhtar; Copyright Dreadlock/Fotolia; BMU/Rupert Oberhäuser, BSW/Paul Langrock; BMU/Brigitte Hiss; Bundesverband Windenergie e.V; Copyright BMU / Bernd Müller
  • 19. Our E-Trade-Center
    www.e-trade-center.com – the central German internet portal for international business opportunities
    The e-trade-center allows users free of charge to:
    • Search for business partners
    • 20. Publish offers or inquiries for products and services
    Service of the e-trade-center:
    • Up-to-date of about 4.000 entries: limited timeframe of publication assures that the business inquiries are up-to-date
    • 21. About 48.000 visits per month on the e-trade-center Portal
    • 22. All entries are scrutinized and, if necessary, amendments to the text are made before being published
    • 23. Weekly personalized newsletter free of charge
    • 24. The Internet Portal is available in English and German language
  • 3 h
    Helsinki
    1.5 h
    Riga
    Copenhagen
    Berlin
    Warsaw
    Brussels
    Prague
    Vienna
    24 h
    Budapest
    Madrid
    48 h
    Athens
    EU’s New Geographic Center is in Germany*
    Germany is Europe’s largest economy
    Germany
    2008
    EU (27)
    497
    Population (millions)
    82
    GDP (in EUR bn)
    12,466
    2,454
    GDP Growth (YoY)
    0.9%
    1.3%
    Inflation
    2.8%
    3.7%
    Stockholm
    7.6%
    Unemployment
    7.3%
    Moscow
    London
    12 h
    24 h
    Paris
    Rome
    Note*: EU-27’s center: 42 km east of Frankfurt/Main in Meerholz, Hessen; Source: Eurostat 2009
  • 25. Facts & Figures: Germany in Numbers
    • Form of Government:
    Federal Republic (16 states)
    • GDP 2008: EUR 2.5 trillion
    DK
    BALTIC SEA
    • GDP per capita 2008:
    EUR 30.343
    FLENSBURG
    NORTH SEA
    • Area: 357,114 km²
    • 26. Coastline: 2,389 km²
    ROSTOCK
    KIEL
    SCHLESWIG-HOLSTEIN
    MECKLENBURG- WESTERN
    POMERANIA
    50.9%
    30.4%
    17.9%
    0.9%
    SCHWERIN
    • Population: 82,310,000
    • 31. Working population: 40 m
    HAMBURG
    HAMBURG
    PL
    NL
    BREMEN
    BREMEN
    BERLIN
    LOWER SAXONY
    BERLIN
    POTSDAM
    HANOVER
    BRANDENBURG
    MAGDEBURG
    • GDP growth 2007:
    • 35. GDP growth 2008:
    • 36. Inflation rate 2008:
    2.5%
    1.3%
    2.6%
    SAXONY-ANHALT
    HALLE
    BE
    LEIPZIG
    NORTH RHINE-WESTPHALIA
    DÜSSELDORF
    SAXONY
    COLOGNE
    DRESDEN
    FRANKFURT
    ERFURT
    LUX
    CZ
    THURINGIA
    HESSE
    • International Passenger
    Airports: 19; Seaports: 34;
    Inner Harbors: 250
    • Exports 2008: EUR 995 bn
    • 37. Imports 2008: EUR 819 bn
    WIESBADEN
    NUREMBERG
    MAINZ
    RHINELAND PALATINATE
    SAARLAND
    • Current Account 2008:
    +6.6% (in % of BIP)
    F
    SAARBRÜCKEN
    BAVARIA
    STUTTGART
    • Highways: 12,400 km
    • 38. Federal Roads: 41,000 km
    • 39. Railways: 41,300 km
    • 40. Waterways: 7,500 km
    AUT
    • Gross investment 2008:
    EUR 479 billion
    MUNICH
    BADEN- WÜRTTEMBERG
    CH
    Source: Investment Guide to Germany (April 2009), Germany Trade & Invest (April 2008); Federal Statistical Office (2009)
  • 41. Metropolitan Regions in Germany
    The most dense populated metropolitan areas are located in the west of Germany
    • Average population density: 231/km2
    • 42. 40.3 million (48.9%) of the German population live in metropolitan areas with more than 500 people/km2
    • 43. Major metropolitan regions:
    4
    2
    Rhein / Ruhr Area(Cologne, Düsseldorf, Dortmund, Essen): 5.7 million
    i.e. Telecommunication industry
    Berlin: 4.2 million
    i.e. Internet, healthcare
    Stuttgart: 2.6 million
    i.e. Mechanical engineering
    Hamburg: 2.6 million
    i.e. Logistics, media
    Munich: 1.9 million
    i.e. Automotive, mechanical engineering etc
    Frankfurt a. M.: 1.9 million
    i.e. Finance & banking
    Nuremberg: 1.0 million
    i.e.Embedded systems
    Hanover: 1.0 million
    i.e. Automotive
    Leipzig: 511,525
    i.e. Renewable energies, chemistry
    1
    8
    2
    1
    9
    3
    4
    > 500 people/km2
    > 200 people/km2
    > 100 people/km2
    > 50 people/km2
    ≤ 50 people/km2
    > 1,000,00 people
    > 500,000 people
    ≤ 500,000 people
    6
    5
    7
    6
    3
    7
    Cities
    8
    5
    9
    Source: Reader's Digest Atlas Deutschland 2007; Federal Statistical Office 2007
  • 44. MapOverview: ICT Companies in Germany
    COMPETENCE NETWORKS INITIATIVE
    Unitesthemost innovative and high-performance technologically oriented national competence networks that are characterized by a very close proximity to the market and the industry, deep regional roots, dynamism and flexibility.
    Source: BMWi – Kompetenznetze Deutschland (kompetenznetze.de), BITKOM/Roland Berger 2008, Bureau van Dijk 2008
  • 45. Cost of Living – International Comparison
    Mercer’s survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.
  • 46. Incentives
    Operational Incentive Package
    Investment Incentive Package
    R&D Incentives
    Labor-Related
    Incentives
    Cash Incentives
    Interest-Reduced
    Loans
    Public Guarantees
    State
    Investment
    Grants
    KfW Loans (National Level)
    Recruitment
    Grants
    Investment
    Allowance1
    State Development Bank Loans
    Combined
    State/ Federal
    Training Support
    Loans
    Silent / Direct Partnership
    Wage Subsidies
    Inviting Incentives
    Germany offers different incentivepackagestoreimburse an investmentproject’s expenditures. Additional supportisprovidedbystatesorcities.
    Incentives Available to Investment Projects in Germany
    +
    1 only available in eastern Germany
  • 47. The German ICT Market
    Germany‘s ICT industryisranked 5th in worldwidecomparisonofmarketvolume
    ICT Industry Market Volumes 2008 (in EUR billion)
    Source: EITO Update 2008
  • 48. Market Shares Europe
    With a market volume of above 133 billion EUR Germany’s ICT Industry ranks second in Europe
    EU25 ICT Industry Market Volumes 2008 (in EUR billion)
    Source: EITO Update 2008
  • 49. The German ICT Market
    822,000 full time employees work directly in the ICT sector
    Software and IT Services: 49.7%
    Telecommunication
    Services: 29.5%
    • Another 650,000 ICT specialists work in other industries i.e. automotive, finance, etc.
    • 50. Job motor: New workplaces mainly created in medium-sized enterprises in the software and IT services industry
    Production of Office Equipment and Data Processing Devices: 12.0%
    Production of ICT Equipment and Infrastructure: 8.8%
    Source: BITKOM (April 2009)
  • 51. IT Services Overview
    Segment experiencing consistent growth with outsourcing services leading at 8,8% CAGR
    Source: EITO 2008
    Trends & Statistics
    Market Volume (EUR Billion)
    • IT Services market volume of EUR 32,8 billion with projected growth of 5,5% CAGR through 2012
    • 52. Special feature is the large number of IT subsidiaries of large German companies acting independently, ie BASF-IT-Services
    • 53. Other growth drivers include embedded systems, vertical integration, compliance, business intelligence, and ECM
  • IT Services Overview
    • Withinthe German IT-servicessectorprojectservices (6.6%) and BPO (8.3%) showbeyondaveragegrowth.
    • 54. Optimizationandstandardizationarethemainfocus of projectsservices, including ERP packages
    Market value € billion
    Source: EITO 2008
  • 55. IT Services – growthareas SOA, Outsourcing
    SOA is not only technology but can be seen as a mindset demanding a transformation of culture.
    The German outsourcing market offers much space to grow
    Market Volume Germany in EUR billion
    • SOA standards will encourage an industrialisation of thesector.
    • 56. SOA helpsSME‘sandstart-upstoeasilyoffertheirservicesandvalueadd
    Source: GTAI Research; AMR Research, Research & Markets 08/2008, BITKOM
  • 57. Software Overview
    Germany is the most lucrative software market in Europe, accounting for 26,1% of the European market‘s value.
    Leading players:
    Microsoft 9,9%
    Oracle 5.4%
    SAP AG 4.2%
    Others 80,4%
    Source: Datamonitor Jan.2008
  • 58. Trends in the German Software market
    Software Overview
    • Software marketvolumeof EUR 14,70 billionwithprojectedsteadygrowththrough 2009
    • 59. Distinctivefeatures of German softwaremarketarethe strong presence of SMEs andtheomnipresence of SAP
    • 60. Growingfieldsinclude Software as a Service (SaaS), Virtualisation, Security, and Embedded Systems
    • 61. ERP and CRM remaina majorgrowthdriver
    • 62. Business intelligenceandenterprisecontentmanagementtoolsareemergingareas of investment
  • Software - SaaS
    A growing number of SaaS products come to the market and European customers catch up with US companies in the use of this business model.
    SaaS Market Volume (in EUR million)
    • Market growthwith CRM solutionasdriver
    • 63. SaaSisthefuture model for E-Commerce (2013 ca. 40% of all E-Commerce offers will berealized on SaaSbasis)
    • 64. SaaScanhelptoreachgoodstandard in „greening“ the IT (save energyandpackagingmaterials, lesstransportationneeded, lesstraveling..)
    Source: Verband IT-Mittelstand e.V.
  • 65. Software - Virtualisation
    Using virtualisation opportunities helps to make better use of existing capacities, managing growing data volumes and lowering costs.
    • Server virtualisationis a hugetrend in Europe, with Germany showingextremelyhighgrowth (61% ofthecomputerspurchasedwithin last 12 monthshavevirtualisationsoftware)
    • 66. Disasterrecovery, back-upandavailabilityarethesectorswithhighestgrowth (customersare large companies + SME‘s)
    • 67. Storage virtualisation will becomemoreimportantastheamountofdataisincreasingand a betteruseofdatastorageitems will save costs + energy.
    Source: GTAI Research; studyofTechConsult 2008, IDC 2008
  • 68. Software - Security
    The market for IT security (products and services) is growing due to steadily increasing risk potential
    German market for IT security in EUR Mio
    • German marketvolumefor IT security was 4 Bn € in 2007 (ca. 8% oftheworldwidemarketestimate) and will increaseto 5 bil € in 2009
    • 69. In international comparison German usersshow a highneedforsecurity
    • 70. Withgrowingconvergenceandmobility in the IT theneedfordataprotectionistheretopreventeconomicdamages due tosecuritylacks
    Source: IDC 2008, Capgemini IT trendsstudy 2008
  • 71. Software - Embedded Systems
    Embedded Systems is an important cross-sectional area of the German ICT market.
    Embedded Systems Market Volume (separated by sectors) in EUR billion
    • Embedded Systems reached market volume of EUR 19 million in 2008 in Germany, generated from both suppliers (EUR 4 billion) users (EUR 15 billion)
    • 72. ES serve (financially) strong verticalmarketslikeautomotivesectorandmechanicalengineering.
    • 73. No other sector of Germany’s information technology industry is growing as stable and continuous as the embedded systems market
    • 74. ES companiesareoftenhighlyspecialisedSME‘s, Bavaria/ Nuernbergregionis a cluster
    Source: BITKOM, Roland Berger, GTAI Research
  • 75. Internet – Germany‘s Broadband Market
    Germany has by far the highest number of internet users in Europe creating large potential for business
    Internet Penetration
    72%
    72%
    64%
    52%
    38%
    Number of Internet users
    Number of internet users and internet penetration in Europe (in million and percent of the population)
    Source: Bundesministerium für Wirtschaft und Technologie (BMWI), 2008
  • 76. Internet / Multimedia Overview
    Strong industry with consistent growth in relevant sub-segments
    Gaming Market Volume(EUR Bn)
    Online AdvertisingMarket Volume (EUR Bn)
    E-Commerce Market Volume (EUR Bn)
    • Improved online security standards encouraging more E-commerce among private consumers, yet over 90% of E-Commerce consist of B2B transactions (30% of EU market)
    • 77. Online, mobile, and multiplayer games, as well as portable consoles, are gaining momentum over traditional console and PC games
    • 78. Online search word marketing projected to growth 25% from last year, while classical online ads remain prevalent
    Source: BITKOM, BIU, PricewaterhouseCoopers LLP, WilkofskyGruen Associates , OVK, Nielsen Media Research
  • 79. Telecommunications – Mobile Data Services
    Mobile data services is the fastest growing segment withinthe telecommunications services
    Market Volume in EUR Billion
    • 3G penetration expected to reach more than 60% of all German subscribers by 2012
    • 80. Smart phone market is growing: services as part of the success
    • 81. Data services are the main driver of the mobile internet-> Mobile entertainment (advertising, video, games, and music)-> Social networks and communities are among the most popular mobile applications, driving about 40% of mobile internet traffic worldwide
    Source: Goldmedia Study 'Mobile Life 2012'; BITKOM
  • 82. ICT - important growth sectors overall market
    Market growth areas: Green IT + E-Energy +E-health
    Mobile applications: increase in non-Voice-services like SMS,MMS, data services)
    Embedded Systems (+10% annual growth at the vendors side): automotive sector, equipment, process measurement & control/ RFID (2012 share of 8% of gross value added in manufacturing logistics, sales, service industries)
    IT-Services: Outsourcing, SOA, Cloud computing
    Software : SaaS, virtualisation for better use of IT resources, information on demand, community and collaboration software
  • 83. Example: OEM manufacturing plants
    A large number of OEMs forms a broad customer base and thereby provides various opportunities for suppliers
    Hamburg
    Bremen
    27
    25
    43
    35
    40
    39
    08
    05
    30
    09
    24
    07
    45
    34
    04
    47
    48
    29
    21
    44
    41
    19
    20
    32
    18
    26
    03
    02
    16
    37
    23
    38
    15
    14
    42
    46
    06
    13
    17
    36
    31
    01
    28
    Berlin
    33
    Hannover
    Düsseldorf
    10
    11
    Dresden
    22
    12
    Stuttgart
    Munich
    data2map.de
    Source: Germany Trade and Invest (February 2009)
  • 84. THANK YOU!
    We look forward to seeing you soon in Germany
  • 85. Hessen
    Hessen has the highest Productivity in Germany.
    Hessen
    Basic data (2008)
    Frankfurt
    Kassel
    Wiesbaden
    Darmstadt
    Source: Federal Statistical Office, German Association of Cities and Towns 2009, Note: *Data from 2007
  • 86. Hessen
    Hessen
    Source: Hessen Agentur
  • 87. Hessen
    Hessen
    Source: Hessen Agentur, * industry plus the customer service sector