german ict market - opportunities and challenges

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2nd ICT Net Conference

“Technology and Entrepreneurship”

Jürgen Kappenmann, Consultant Esslingen, Belgrade

Falkensteiner Hotel, Beograd, 30th Oct., 2013

Overview of International Markets -

Challenges and Opportunities in German, French and Dutch markets:

The German IT Market

The German IT Market: Challenges and Opportunities

INTRO

Opportunities and Challenges in the German IT Market

Creating Opportunities and Tackling Challenges in the German IT Market

Opportunities Challenges Strategy

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ICT Market Volume € 151,9 billion turnover in 2012

GERMAN IT MARKET KEY FIGURES

Source: BITKOM

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ICT Market Segments: IT, Telecommunication, CE

Source: BITKOM

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ICT Market Segments

Source: BITKOM

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Market Growth by Segments

Source: BITKOM

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Employment Overall 2012: 902.000 employees

Overall 2013: 917.000 employees (expected)

IT: 698.000 employees (76% of all ICT, plus 19.000)

Telecom: 206.000 employees

Consumer Electronics: 13.000 employees

Lack of IT Experts 2012: 43.000

2013: 39.000 (doubled since 2009)

16.000 in core ICT industry (13.800 in SW and IT services)

23.000 in other industries

Source: BITKOM

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The German IT Market: Challenges and Opportunities 8


OPPORTUNITIES TRENDS


High-Tech Strategy for Germany 2020

Objectives

CO2-neutral, energy-efficient and climate-adapted cities

Renewable biomaterials as an alternative to oil

Intelligent restructuring of energy supply

Treating diseases more effectively with personalized medicine

Better health through targeted prevention and an optimised diet

Living an independent life well into old age

Sustainable mobility

Web-based services for businesses

Industry 4.0

Secure identities

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High-Tech Strategy for Germany 2020

Fields of Action

Climate and Energy

Health and Nutrition

Mobility

Security

Communication

Key Technologies

ICT

Services

Micro System Technologies

Automotive and Traffic

Production Technologies

…


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OPPORTUNITIES TREND: INDUSTRY 4.0

Core Idea


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OPPORTUNITIES TREND: INDUSTRY 4.0

Core Concept

Future Project of the High-Tech Strategy 2020 which promotes the computerization of traditional industries such as manufacturing (goal: Smart Factory)

Technology basis: cyber-physical systems and Internet of Things

Combination of computational and software components with mechanical and electronic parts (embedded systems) which communicate via a wired or wireless data infrastructure (e.g. internet)

Applications

Medical devices, age-based assistance systems, IT traffic steering and logistic systems, inter-linked security and drive assistance for cars, industrial process steering and automation, infrastructure systems for communication


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OPPORTUNITIES TREND: SMART GRIDS & METERING

Core Concept

Study of German Federal Ministry of Economics & Technology

Oct. 2013: German smart metering concept successfully passes EU notification process

Objectives

By 2020 30% of power needs covered by renewable energy

Switch from „consumption-oriented generation“ to „generation-optimized consumption“

By 2022 two-thirds of all German households use smart meters

12 million households use smart meters with access to smart grids (Smart Meter Gateways)

Applications

energy supply management systems, smart houses


Cross-Innovation Cloud Computing

Smart Cities

Electro Mobility

Connected Car

Smart Grids

Energy Efficiency

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Open Source

IT Security

New dynamic: NSA scandal

Topics: data protection, industrial espionage, mobile security, e-payment

eBusiness, eCommerce

eGovernment


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OPPORTUNITIES TREND: MOBILE

Less PCs and Desktops, More Tablets

Tablets: (48% growth in 2013)

Source: BITKOM

Turnover billion EUR



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Booming Smart Phone Market

Source: BITKOM


Sales in million


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Mobile Phones as Permanent Companions 2011: 62% 2013: 75%, i.e. almost 50 Mio. Germans 14% of all Germans consider using Mobile Wallets Continuing growth in mobile data services market (€ 9,1 billion, +5%)

Source: BITKOM


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OPPORTUNITIES TREND: WEB

Companies with Websites (min. 10 employees): 82%

Companies with < 10 employees: 45%


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OPPORTUNITIES OUTSOURCING TRENDS

Covered Fields

Web, Entreprise 2.0, Mobile Development, Embedded, SaaS/Cloud

Results & Trends

Higher acceptance with SMEs

Reasons: reduce costs, focus on core competencies, access to resources outside Germany, speed up time-to-market

Critical: poor communication with vendor´s team, CM, cultural difference, PM

Prefered: nearshore, small providers via fixed-price/time-and-material models, short and focused contracts

Outsourcing processes are increasingly globalized

Focus on long-term added value

More business process outsourcing (BPO)

Serbia as a outsourcing location

see Challenges section

Source: Europ. IT Outsourcing Intelligence Report 2011: Germany


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OPPORTUNITIES OUTSOURCING TRENDS

Outsourcing Industries

Source: Europ. IT Outsourcing Intelligence Report 2011: Germany


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OPPORTUNITIES OUTSOURCING PROCESS

Dev

elo

pm

ent

Step

s

SW or System Development

Local (National) Sub-Supplier

International Sub-Supplier

Guided

Cooperation

Responsible

Demand: - Vertical & horizontal market

knowledge - technical know-how

Supply: - (Basic) vertical & horizontal market

knowledge - technical know-how - project/quality management skills Starting point: SW testing

Deepened Industry/technology know-how building - Development of • project management, • quality management and • process & maturity model skills

Source: policultancy.eu



CHALLENGES STATUS QUO


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CHALLENGES ITBD ROAD SHOW

Berlin

Bavaria

Hessen / RPF

Baden-Württemberg


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CHALLENGES ITBD ROAD SHOW FINDINGS

German stakeholders strongly interested in the Serbian market but have limited / no experience and knowledge

Currently order books are full but… pressure and need to internationalize

From a German perspective the Serbian market is interesting but limited in size

Market knowledge and intelligence on both sides is low need for development of joint B2B models, events, joint platforms etc.

demand and supply mappings to be developed, usage of “ICT at a Glance”

Entrance to German market is often connected to confidence-building measures like success stories with German clients, language skills,

involvement of German experts ...


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CHALLENGES STATUS QUO

Key Features

Visibility of Serbian IT industry Hardly known as an IT location, no rep offices in Germany

Publication ICT at a Glance only comprehensive market study

Limited (industry-specific) experience & language

Expectations

SW development like in Germany but with less costs

Quality Management

Process of cooperation key to success

Trust building

It always depends on single company: no specific legal, tax etc. barriers


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STRATEGY KEY ELEMENTS

Define your Strategy: Do it properly

Key Elements for Success

Focus

Specialization

Quality & Cooperation

Contracting

Market Screening

Presentation

Profile, references, methodologies…


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STRATEGY FOCUS


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STRATEGY FOCUS: CLUSTERS & ASSOCIATIONS

Cluster Platforms & Regional Clusters Bavarian ICT Cluster

Bwcon

Cyberforum Karlsruhe

ICT & Digital Business Association Berlin – Brandenburg (SIBB)

ICT NRW

IT-Mitteldeutschland

Software-Cluster „Rhein-Main-Cluster“

Softwarezentrum Böblingen/Sindelfingen

Open Source Cluster Berlin


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STRATEGY MARKET SCREENING

- eGovernment - Creative Industries - Open Source - Media - … - Business SW &

Applications - ERP - Cloud - …

Southwest: - Automotive - Embedded - eHealth - Creative Industries - Smart Energy - Smart Grids - Open Source - …

- Gaming - Open Source - Media - …

- Energy Efficiciency - Solar Energy - IT HW - …

- Automotive - BioTech - …

- Medical - eHealth



Core ICT Industry – Which IT Companies Are Hiring: 75% SW Development

24% IT Consulting

23% Marketing and Sales

20% System Administrators & Application Support

8% Project Management

7% IT Security Experts

IT SMEs (1-50 million tunrover) 2012: 14.500 (80% out of 18.000)

94% search for SW developers

50% of companies confirm lack of IT experts, same # expect no change in near future

Source: BITKOM



For Which Fields Are IT Companies Searching

Source: BITKOM



Demand for IT Experts by IT Companies

Source: BITKOM



Demand for IT Experts by Non-IT Companies

Source: BITKOM



Labour Costs General

ICT industry full-time employment: € 59.000 (gross)

Positions

SW developer: € 5.000/month (average wage)

SW developer start (gross): € 31.000-44.000/y. (av. € 40.300)

SW developer experienced (gross): € 39.000-56.800/y. (av. € 52.000)

Computer scientist start: € 45.000/y. (gross)

Geographic

Hessen/BW/BAY/HAM: high

Eastern States: low



German Investments in Serbia (2010/11)

Source: AHK BG

Comapny Industry Investment in Mio. €

Bosch Automotive Supplies 71,0

Clean-Tech Pharmaceuticals 1,0

Continental Automotive 8,0

Dräxlmaier-2 Automotive 10,0

Dunkermotoren Electronics 1,0

Eko-Theman Group Food (Processing) 2,5

Fresenius Medical Care Medical 24,0

Grammer System Automotive Supplies 5,2

Gruner Electronics/Electrics 4,0

IGB Bauerhin Automotive Supplies 4,0

Leoni Automotive Supplies 7,4

Meggle Food (Processing) 4,0

Metro Retail 21,0

Mühlbauer IT 4,0

Norma Group Manufacturing 11,2

Siemens Electrics 20,0

Vossloh-Schwabe Panasonik Electrics 2,0


STRATEGY BROKERAGE

EU-Wide

KET Brokerage: http://www.b2match.eu/kets2014/pages/home

IT Fairs

CeBIT, Embedded World…

see event calendar on cluster and association websites

Clusters & Associations

For specific events see cluster websites

EEN

Business Cooperation Database

Brokerage

…


Pitanja

&

Hvala na pažnji

Jürgen Kappenmann, Ass. iur., M.A. Consultant

Esslingen, Belgrade +381-69-197 47 30

[email protected] Skype: juergen.kappenmann

german ict market - opportunities and challenges

Business

opportunities

opportunities

strategy market

horizontal

smart grids

tech strategy

vertical amp

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