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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.

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GTAI and the German ICT Market

  1. 1. Germany Trade & Invest Foreign Trade and Inward Investment Promotion AgencyGTAI and the German ICT MarketNovember 2009: NASSCOM Event<br />
  2. 2. Germany Trade & Invest<br />Main Tasks<br />Promoting Germany‘s advantages as a prime location for foreign investors in high-tech industries.<br />Providing consultancy and support services for international businesses seeking to expand operations to Germany.<br />Providing companies established in Germany with information about business opportunities in foreign markets.<br />Collecting and processing economic data and information about industries, tender procedures, legal frameworks, and customs regulations in foreign markets.<br />
  3. 3. The Agency<br />Two headquarters in Germany - 46 locations worldwide.<br />Belgrade<br />Budapest Bucharest <br />Kiev<br />Moscow<br />Prague<br />Riga <br />Warsaw Zagreb<br />Athens <br />Brussels<br />London<br />Madrid<br />Milan <br />Paris<br />Stockholm<br />Bangkok<br />Beijing <br />Hanoi<br />Hong Kong<br />Jakarta<br />Kuala Lumpur<br />Mumbai<br />New Delhi<br />Seoul<br />Shanghai<br />Taipeh<br />Tokyo <br />Berlin<br />Cologne<br />Chicago<br />New York<br />San Francisco<br />Toronto <br />Washington<br />Dubai<br />Istanbul<br />Tel Aviv<br />Johannesburg<br />Cairo<br />Nairobi<br />Tunis<br />Buenos Aires <br />Caracas<br />Mexico City<br />Santiago de Chile<br />Sao Paulo <br />Sydney<br />
  4. 4. Our Teams<br />Germany Trade & Invest concentrates its market knowledge within a range of industry teams to best support the investor<br />Chemicals & Healthcare<br />- Chemical Industry and Polymers<br />- Chemicals-Related Process Industry<br />- New Materials/ Composite Materials<br />- Red Biotech<br />- Medical Devices Industry<br />- Pharmaceuticals Industry<br />Renewable Energies & Resources<br /><ul><li> Photovoltaics
  5. 5. Energy Efficiency
  6. 6. Renewable Resources and Bioenergy
  7. 7. Energy Storage and Fuel Cells
  8. 8. Solar Thermal Energy
  9. 9. Geothermal Energy
  10. 10. Wind Energy
  11. 11. Waste to Energy, Recycling and Sustainable Water Resource Management</li></ul>Service Industries<br /><ul><li> Consumer Goods/Retail
  12. 12. Food and Beverages
  13. 13. Information and Communications Technology
  14. 14. Business Services
  15. 15. Transportation and Logistics
  16. 16. Tourism</li></ul>Mechanical & Electronic Technologies<br /><ul><li> Electronics and Microtechnology
  17. 17. Machinery and Equipment
  18. 18. Transportation and Technologies</li></ul>- Applied Sciences and Technology Transfer<br />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<br />
  19. 19. Our E-Trade-Center<br /> – the central German internet portal for international business opportunities<br />The e-trade-center allows users free of charge to: <br /><ul><li>Search for business partners
  20. 20. Publish offers or inquiries for products and services</li></ul>Service of the e-trade-center:<br /><ul><li>Up-to-date of about 4.000 entries: limited timeframe of publication assures that the business inquiries are up-to-date
  21. 21. About 48.000 visits per month on the e-trade-center Portal
  22. 22. All entries are scrutinized and, if necessary, amendments to the text are made before being published
  23. 23. Weekly personalized newsletter free of charge
  24. 24. The Internet Portal is available in English and German language</li></li></ul><li>3 h<br />Helsinki<br />1.5 h<br />Riga<br />Copenhagen<br />Berlin<br />Warsaw<br />Brussels<br />Prague<br />Vienna<br />24 h<br />Budapest<br />Madrid<br />48 h<br />Athens<br />EU’s New Geographic Center is in Germany*<br />Germany is Europe’s largest economy<br />Germany<br />2008<br />EU (27)<br />497<br />Population (millions)<br />82<br />GDP (in EUR bn)<br />12,466<br />2,454<br />GDP Growth (YoY)<br />0.9%<br /> 1.3%<br />Inflation<br />2.8%<br />3.7%<br />Stockholm<br />7.6%<br />Unemployment<br />7.3%<br />Moscow<br />London<br />12 h<br />24 h<br />Paris<br />Rome<br />Note*: EU-27’s center: 42 km east of Frankfurt/Main in Meerholz, Hessen; Source: Eurostat 2009<br />
  25. 25. Facts & Figures: Germany in Numbers<br /><ul><li> Form of Government:</li></ul> Federal Republic (16 states)<br /><ul><li> GDP 2008: EUR 2.5 trillion</li></ul>DK<br />BALTIC SEA<br /><ul><li>GDP per capita 2008: </li></ul>EUR 30.343<br />FLENSBURG<br />NORTH SEA<br /><ul><li> Area: 357,114 km²
  26. 26. Coastline: 2,389 km²</li></ul>ROSTOCK<br />KIEL<br />SCHLESWIG-HOLSTEIN<br /><ul><li>GDP per sector 2008:
  27. 27. Services:
  28. 28. Industry:
  29. 29. Trade:
  30. 30. Agriculture:</li></ul>MECKLENBURG- WESTERN <br />POMERANIA<br />50.9%<br />30.4%<br />17.9%<br />0.9%<br />SCHWERIN<br /><ul><li> Population: 82,310,000
  31. 31. Working population: 40 m</li></ul>HAMBURG<br />HAMBURG<br />PL<br />NL<br />BREMEN<br />BREMEN<br />BERLIN<br />LOWER SAXONY<br />BERLIN<br />POTSDAM<br />HANOVER<br />BRANDENBURG<br /><ul><li>Biggest Cities:
  32. 32. Berlin (3.4 m)
  33. 33. Hamburg (1.8 m)
  34. 34. Munich (1.3 m)</li></ul>MAGDEBURG<br /><ul><li>GDP growth 2007:
  35. 35. GDP growth 2008:
  36. 36. Inflation rate 2008:</li></ul>2.5%<br />1.3%<br />2.6%<br />SAXONY-ANHALT<br />HALLE<br />BE<br />LEIPZIG<br />NORTH RHINE-WESTPHALIA<br />DÜSSELDORF<br />SAXONY<br />COLOGNE<br />DRESDEN<br />FRANKFURT<br />ERFURT<br />LUX<br />CZ<br />THURINGIA<br />HESSE<br /><ul><li>International Passenger</li></ul> Airports: 19; Seaports: 34;<br /> Inner Harbors: 250<br /><ul><li> Exports 2008: EUR 995 bn
  37. 37. Imports 2008: EUR 819 bn</li></ul>WIESBADEN<br />NUREMBERG<br />MAINZ<br />RHINELAND PALATINATE<br />SAARLAND<br /><ul><li>Current Account 2008: </li></ul> +6.6% (in % of BIP)<br />F<br />SAARBRÜCKEN<br />BAVARIA<br />STUTTGART<br /><ul><li>Highways: 12,400 km
  38. 38. Federal Roads: 41,000 km
  39. 39. Railways: 41,300 km
  40. 40. Waterways: 7,500 km</li></ul>AUT<br /><ul><li>Gross investment 2008: </li></ul> EUR 479 billion<br />MUNICH<br />BADEN- WÜRTTEMBERG<br />CH<br />Source: Investment Guide to Germany (April 2009), Germany Trade & Invest (April 2008); Federal Statistical Office (2009)<br />
  41. 41. Metropolitan Regions in Germany<br />The most dense populated metropolitan areas are located in the west of Germany<br /><ul><li>Average population density: 231/km2
  42. 42. 40.3 million (48.9%) of the German population live in metropolitan areas with more than 500 people/km2
  43. 43. Major metropolitan regions:</li></ul>4<br />2<br />Rhein / Ruhr Area(Cologne, Düsseldorf, Dortmund, Essen): 5.7 million<br />i.e. Telecommunication industry <br />Berlin: 4.2 million<br />i.e. Internet, healthcare <br />Stuttgart: 2.6 million<br />i.e. Mechanical engineering <br />Hamburg: 2.6 million<br />i.e. Logistics, media <br />Munich: 1.9 million<br />i.e. Automotive, mechanical engineering etc <br />Frankfurt a. M.: 1.9 million<br />i.e. Finance & banking <br />Nuremberg: 1.0 million<br />i.e.Embedded systems <br />Hanover: 1.0 million<br />i.e. Automotive <br />Leipzig: 511,525<br />i.e. Renewable energies, chemistry<br />1<br />8<br />2<br />1<br />9<br />3<br />4<br />&gt; 500 people/km2<br />&gt; 200 people/km2<br />&gt; 100 people/km2<br />&gt; 50 people/km2<br />≤ 50 people/km2<br />&gt; 1,000,00 people<br />&gt; 500,000 people<br />≤ 500,000 people<br />6<br />5<br />7<br />6<br />3<br />7<br />Cities<br />8<br />5<br />9<br />Source: Reader&apos;s Digest Atlas Deutschland 2007; Federal Statistical Office 2007<br />
  44. 44. MapOverview: ICT Companies in Germany<br />COMPETENCE NETWORKS INITIATIVE<br />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.<br />Source: BMWi – Kompetenznetze Deutschland (, BITKOM/Roland Berger 2008, Bureau van Dijk 2008<br />
  45. 45. Cost of Living – International Comparison <br />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.<br />
  46. 46. Incentives<br />Operational Incentive Package<br />Investment Incentive Package<br />R&D Incentives<br />Labor-Related<br />Incentives<br />Cash Incentives<br />Interest-Reduced <br />Loans<br />Public Guarantees<br />State<br />Investment <br />Grants<br />KfW Loans (National Level)<br />Recruitment<br />Grants <br />Investment<br />Allowance1<br />State Development Bank Loans<br />Combined <br />State/ Federal<br />Training Support<br />Loans<br />Silent / Direct Partnership<br />Wage Subsidies<br />Inviting Incentives<br />Germany offers different incentivepackagestoreimburse an investmentproject’s expenditures. Additional supportisprovidedbystatesorcities.<br />Incentives Available to Investment Projects in Germany<br />+<br />1 only available in eastern Germany<br />
  47. 47. The German ICT Market<br />Germany‘s ICT industryisranked 5th in worldwidecomparisonofmarketvolume<br />ICT Industry Market Volumes 2008 (in EUR billion) <br />Source: EITO Update 2008<br />
  48. 48. Market Shares Europe<br />With a market volume of above 133 billion EUR Germany’s ICT Industry ranks second in Europe<br />EU25 ICT Industry Market Volumes 2008 (in EUR billion) <br />Source: EITO Update 2008<br />
  49. 49. The German ICT Market<br />822,000 full time employees work directly in the ICT sector <br />Software and IT Services: 49.7%<br />Telecommunication<br />Services: 29.5%<br /><ul><li>Another 650,000 ICT specialists work in other industries i.e. automotive, finance, etc.
  50. 50. Job motor: New workplaces mainly created in medium-sized enterprises in the software and IT services industry</li></ul>Production of Office Equipment and Data Processing Devices: 12.0%<br />Production of ICT Equipment and Infrastructure: 8.8%<br />Source: BITKOM (April 2009)<br />
  51. 51. IT Services Overview<br />Segment experiencing consistent growth with outsourcing services leading at 8,8% CAGR<br />Source: EITO 2008<br />Trends & Statistics<br />Market Volume (EUR Billion)<br /><ul><li>IT Services market volume of EUR 32,8 billion with projected growth of 5,5% CAGR through 2012
  52. 52. Special feature is the large number of IT subsidiaries of large German companies acting independently, ie BASF-IT-Services
  53. 53. Other growth drivers include embedded systems, vertical integration, compliance, business intelligence, and ECM</li></li></ul><li>IT Services Overview<br /><ul><li>Withinthe German IT-servicessectorprojectservices (6.6%) and BPO (8.3%) showbeyondaveragegrowth.
  54. 54. Optimizationandstandardizationarethemainfocus of projectsservices, including ERP packages</li></ul>Market value € billion <br />Source: EITO 2008<br />
  55. 55. IT Services – growthareas SOA, Outsourcing <br /> SOA is not only technology but can be seen as a mindset demanding a transformation of culture. <br /> The German outsourcing market offers much space to grow <br />Market Volume Germany in EUR billion<br /><ul><li>SOA standards will encourage an industrialisation of thesector.
  56. 56. SOA helpsSME‘sandstart-upstoeasilyoffertheirservicesandvalueadd</li></ul>Source: GTAI Research; AMR Research, Research & Markets 08/2008, BITKOM<br />
  57. 57. Software Overview<br />Germany is the most lucrative software market in Europe, accounting for 26,1% of the European market‘s value. <br />Leading players:<br />Microsoft 9,9%<br />Oracle 5.4% <br />SAP AG 4.2%<br />Others 80,4%<br />Source: Datamonitor Jan.2008<br />
  58. 58. Trends in the German Software market <br />Software Overview<br /><ul><li>Software marketvolumeof EUR 14,70 billionwithprojectedsteadygrowththrough 2009
  59. 59. Distinctivefeatures of German softwaremarketarethe strong presence of SMEs andtheomnipresence of SAP
  60. 60. Growingfieldsinclude Software as a Service (SaaS), Virtualisation, Security, and Embedded Systems
  61. 61. ERP and CRM remaina majorgrowthdriver
  62. 62. Business intelligenceandenterprisecontentmanagementtoolsareemergingareas of investment</li></li></ul><li>Software - SaaS<br />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. <br />SaaS Market Volume (in EUR million)<br /><ul><li>Market growthwith CRM solutionasdriver
  63. 63. SaaSisthefuture model for E-Commerce (2013 ca. 40% of all E-Commerce offers will berealized on SaaSbasis)
  64. 64. SaaScanhelptoreachgoodstandard in „greening“ the IT (save energyandpackagingmaterials, lesstransportationneeded, lesstraveling..)</li></ul>Source: Verband IT-Mittelstand e.V.<br />
  65. 65. Software - Virtualisation<br />Using virtualisation opportunities helps to make better use of existing capacities, managing growing data volumes and lowering costs.<br /><ul><li>Server virtualisationis a hugetrend in Europe, with Germany showingextremelyhighgrowth (61% ofthecomputerspurchasedwithin last 12 monthshavevirtualisationsoftware)
  66. 66. Disasterrecovery, back-upandavailabilityarethesectorswithhighestgrowth (customersare large companies + SME‘s)
  67. 67. Storage virtualisation will becomemoreimportantastheamountofdataisincreasingand a betteruseofdatastorageitems will save costs + energy.</li></ul>Source: GTAI Research; studyofTechConsult 2008, IDC 2008<br />
  68. 68. Software - Security<br />The market for IT security (products and services) is growing due to steadily increasing risk potential <br />German market for IT security in EUR Mio<br /><ul><li>German marketvolumefor IT security was 4 Bn € in 2007 (ca. 8% oftheworldwidemarketestimate) and will increaseto 5 bil € in 2009
  69. 69. In international comparison German usersshow a highneedforsecurity
  70. 70. Withgrowingconvergenceandmobility in the IT theneedfordataprotectionistheretopreventeconomicdamages due tosecuritylacks</li></ul>Source: IDC 2008, Capgemini IT trendsstudy 2008 <br />
  71. 71. Software - Embedded Systems<br />Embedded Systems is an important cross-sectional area of the German ICT market.<br />Embedded Systems Market Volume (separated by sectors) in EUR billion<br /><ul><li>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. 72. ES serve (financially) strong verticalmarketslikeautomotivesectorandmechanicalengineering.
  73. 73. No other sector of Germany’s information technology industry is growing as stable and continuous as the embedded systems market
  74. 74. ES companiesareoftenhighlyspecialisedSME‘s, Bavaria/ Nuernbergregionis a cluster</li></ul>Source: BITKOM, Roland Berger, GTAI Research<br />
  75. 75. Internet – Germany‘s Broadband Market<br />Germany has by far the highest number of internet users in Europe creating large potential for business<br />Internet Penetration<br />72%<br />72%<br />64%<br />52%<br />38%<br />Number of Internet users <br />Number of internet users and internet penetration in Europe (in million and percent of the population)<br />Source: Bundesministerium für Wirtschaft und Technologie (BMWI), 2008<br />
  76. 76. Internet / Multimedia Overview<br />Strong industry with consistent growth in relevant sub-segments<br />Gaming Market Volume(EUR Bn)<br />Online AdvertisingMarket Volume (EUR Bn)<br />E-Commerce Market Volume (EUR Bn)<br /><ul><li>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. 77. Online, mobile, and multiplayer games, as well as portable consoles, are gaining momentum over traditional console and PC games
  78. 78. Online search word marketing projected to growth 25% from last year, while classical online ads remain prevalent </li></ul>Source: BITKOM, BIU, PricewaterhouseCoopers LLP, WilkofskyGruen Associates , OVK, Nielsen Media Research<br />
  79. 79. Telecommunications – Mobile Data Services<br />Mobile data services is the fastest growing segment withinthe telecommunications services<br />Market Volume in EUR Billion<br /><ul><li>3G penetration expected to reach more than 60% of all German subscribers by 2012
  80. 80. Smart phone market is growing: services as part of the success
  81. 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</li></ul>Source: Goldmedia Study &apos;Mobile Life 2012&apos;; BITKOM<br />
  82. 82. ICT - important growth sectors overall market <br />Market growth areas: Green IT + E-Energy +E-health <br />Mobile applications: increase in non-Voice-services like SMS,MMS, data services)<br />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)<br />IT-Services: Outsourcing, SOA, Cloud computing <br />Software : SaaS, virtualisation for better use of IT resources, information on demand, community and collaboration software<br />
  83. 83. Example: OEM manufacturing plants<br />A large number of OEMs forms a broad customer base and thereby provides various opportunities for suppliers<br />Hamburg<br />Bremen<br />27<br />25<br />43<br />35<br />40<br />39<br />08<br />05<br />30<br />09<br />24<br />07<br />45<br />34<br />04<br />47<br />48<br />29<br />21<br />44<br />41<br />19<br />20<br />32<br />18<br />26<br />03<br />02<br />16<br />37<br />23<br />38<br />15<br />14<br />42<br />46<br />06<br />13<br />17<br />36<br />31<br />01<br />28<br />Berlin<br />33<br />Hannover<br />Düsseldorf<br />10<br />11<br />Dresden<br />22<br />12<br />Stuttgart<br />Munich<br /><br />Source: Germany Trade and Invest (February 2009)<br />
  84. 84. THANK YOU! <br />We look forward to seeing you soon in Germany<br />
  85. 85. Hessen<br />Hessen has the highest Productivity in Germany.<br />Hessen<br />Basic data (2008)<br />Frankfurt<br />Kassel<br />Wiesbaden<br />Darmstadt<br />Source: Federal Statistical Office, German Association of Cities and Towns 2009, Note: *Data from 2007<br />
  86. 86. Hessen<br />Hessen <br />Source: Hessen Agentur<br />
  87. 87. Hessen<br />Hessen <br />Source: Hessen Agentur, * industry plus the customer service sector<br />