WorkshopStrategic Intelligence and Innovative Clusters - STRATINC

07 October 2004Thessaloniki

The Structure of the ITC Sector

SEPVE-Association of Information Technology Companies of Northern Greece

SEPVE’s background

SEPVE was founded in April 1994 It is based in Thessaloniki. The Association today numbers more than 210

members. (http://www.sepve.org.gr) It is the only collective body representing the

interests of the Information Technology businesses in the regions of Macedonia, Thrace and Thessaly.

It plays a major role in assessing and promoting the needs of the Information Society in Greece and South Eastern Europe.

SEPVE’s vision

Key role to foster: Information Technology as a lever of

development for the whole of Greek society Thessaloniki and Northern Greece as a centre

for Information Technology in the broader geographical region

SEPVE as a bridge for business cooperation with South Eastern Europe

SEPVE’s role in the Greek IT sector 1/2

Consultant to the Ministry of Macedonia and Thrace on the potential for development and exploitation of the Information Technology businesses of the region

Consultant to the four regional authorities of Northern Greece and Thessaly on means of funding Information Technology SMEs

Advisory services to the Ministry of National Economy to assist in the more effective development and use of electronic data interchange systems

SEPVE’s role in the Greek IT sector 2/2

SEPVE is one of the main sources of information on technology issues for the Prime Minister’s office

Recommending and advising the Ministry of Development on new measures, projects and initiatives under the Development Act.

Offering information to both existing and future members on the latest developments in the Information Technology sector, on both the national and international levels.

Fostering the growth of Information Technology within Northern Greece

Promoting an enhanced status for IT businesses, thus making a positive contribution to Greece’s advance into the Information Society

Coordinating and submitting business plans and proposals to government departments and agencies in order to enhance the development of its members’ businesses.

SEPVE activities 1/2

SEPVE activities 2/2

Creating an effective communication and collaboration platform among its members, and between its members and the public sector as well as other business sectors.

Organizing educational and information seminars, round table discussions and conferences, in order to improve the administrative and technical skills of its members.

Promoting cooperation between its members and related businesses in the Balkan countries, as well as in the Mediterranean region and the Middle East, thus taking advantage of the key geographical position of northern Greece.

SEPVE participation - EU projects Organization, management and coordination of the 1st

and 2nd INTERBALKAN IT FORUM in Thessaloniki ADAPT ECOMMEX INTERREG II FP5 - IST-Programme – ISIS Project LEONARDO-Programme – ‘Web Content Manager’

Project New Employment, New E-quality: Promoting Industrial

Relations and Social Dialogue in the IT Sector LEONARDO-Programme – ‘ViPiA - Virtual Pre-Incubator

Accelerator’ FP6 – IST-Programme – EUROPEAN IST

SEPVE’s latest initiative

Creation of the

“High Technology Business Park–

Technopolis Thessalonikis S.A.”

High Technology Business Park – Goals and Benefits of Technopolis 1/2 Solve housing needs of Information and High

Technology companies through development of a well organized centre with high quality infrastructure and services

Cooperation between High Technology companies with Research as well as Educational Institutes

Offer extended services such as a conference centre, catering, health club, day care centre, etc.

High Technology Business Park – Goals and Benefits of Technopolis 2/2

Foster the overall development of the local economy

by means of promoting Information Technology and

the Information Society

Attract foreign investments

Create a communication and cooperation platform

between IT companies and private and public

institutions on a local, national and international level

Greek IT sector description -Company activities

Software Hardware System Integration & IT Services Internet Business Solutions – e-Commerce Web Applications & On Line Databases Telecommunications Multimedia Application Education IT Consulting

Sector Profile

Major bbasic activities Software (Operational applications and

Internet applications): 32% IT Services: 31% Distribution of office machines and PCs:

16% Trading telecommunication products and

equipment: 8%

Source: IOBE – Institution for Financial and Industrial Surveys (IOBE)

Size of the ICT Sector in Greece

<11 persons : 9% 11-50 : 58% 51-250 : 24% >250 : 9%

<1 million € : 19,4% 1-10 : 57,9% 10-100 : 18,1% >100 : 4,6%

Employees Turn Over

Majority of IT companies are SMEs. Major global IT companies have offices or regional headquarters in Greece: Microsoft, HP, Oracle, SAP, Motorola, Siemens, and IBM

ICT market size

6% increase for 2003 – MEUR 2228 Forecasted 2,5% increase for 2004 Mostly damaged were software and IT services Steadily good performance of PC systems sales Bigger market shares are shifting to

multinationals

Source: Strategic International/ Kataras (January 2004)

The Greek IT market, 1999 – 2003 (Values in M€)

1252

1702

1873

21012228

31,00%

10,10%12,10%

6%

36%

0

500

1000

1500

2000

2500

1999 2000 2001 2002 2003

Value (M.Euro)

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

Growth Rate (%)

Size Increase

The IT market in Greece and W. Europe, 2002 – 2005

(% Growth Rates)

-1,5%-0,7%

4,4%

12,1%

1,2%2,2%

2,5%6,0%

-4,00%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

2002 2003 2004 2005

Growth Rate

W.Europe Greece

Reasons for the slowdown

Uneven economic progress: Only a small number of big companies take advantage of 3rd CSF and Olympic Games projects

Lack of modernization Over-loaning of SMEs Etc.

Greek government has put a strong emphasis on the development of the IS

Implementation of OPIS (Operational Programm for the Information Society)is critical for the status of ICT market

Access to considerable EU technology, research and development funds

Good performance of R&D sector Strong scientific support from international universities and

research institutes Country lacks spin-off companies from research PC and Internet usage grow Usage of new technology still on introductory level Deregulation of telecom market

Characteristics of the Greek IT market

Basic sectors of IS development Education Culture/ Digital content (Digitalization of cultural and historic assets) E-government Agriculture Defense services relating to civilians (meteorology, drafting, military

hospitals) E-justice E-Health Intelligent transport SMEs and digital economy Research in ICT E-skills Eurozone infrastructure and services

Employment in IT sector In 2001 employment in the ICT sector constituted 1.1%

of total workforce Well –trained highly skilled IT specialists Well-trained engineers with postgraduate studies studies

in engineering (and management and economics), foreign languages and computer applications

Many well-respected scholars and scientists have shown strong interest in advanced ICT research (about 1,500 scientists staff the four main IT R&D centers in Greece)

Specialization of work force Specializations offered by educational institutions:

IT applications specialist; IT applications with multimedia specialist; Medical IT applications technician; Computer, communication and network technician; IT, networks & office automation application technician; Systems administration and intranet-internet service technician; Computer Systems technician; Computer networks technician; Internet technology technician Telematics technician (communications)

There is no standardized job profile description in Greece

Lack of ICT professionals

in the EU

2003: 1.300.000 Free job opportunities

2004: 1.600.000 Free job opportunities

in Greece:

Information Society - until 2006

40.000 Free job opportunities

In the IT sector – Government & Private

ICT usage in Greece General population Very small and SMEs (2002)

2001 2002 Growth

Rate1

Πολύ μικρές (1-10)

SΜΕ(11-250)

European Average

SΜΕ2

(11-250)Computer users 20% 28,9% 45% 34% 92% 94%

Internet users 10,1% 19,3%91% (EU

AVG 15,6%)14% 74% 83%

Email users 6,2% 12,5% 100% 4% 39% 52%Company presence in the Internet

NA NA NA 16% 67% 69%

Mobile users (GP Only)

49,8% 63,6%31% (EU

AVG 5,6%)divide Convergence

ΠηγήΠηγή: : Εθνική Έρευνα για τη χρήση Νέων Τεχνολογιών στο Γενικό Πληθυσμό για το 2001& 2002, Εθνική Έρευνα για τη χρήση Νέων Τεχνολογιών στο Γενικό Πληθυσμό για το 2001& 2002, GRNETGRNET1:Ευρωπαϊκός Μ.Ο πηγή1:Ευρωπαϊκός Μ.Ο πηγή EITO 2003 EITO 20032:Πηγή2:Πηγή: e: e Business Watch 2003Business Watch 2003

Fast adaptation to Fast adaptation to computer and Internet by computer and Internet by new generationnew generation

Research and development in the IT sector

40% of IT companies have R&D expenses higher than 5% of annual turnover

Companies with 26-100 personnel have higher expenses

40% of the companies participated in subsidized research co-operations, while 1/5 of the sector collaborated on R&D issues with private funds: an overall 47% has participated in R&D collaborations

For 2003-2004 60% declare that they will carry out R&D collaborations with other enterprises and institutions of Higher Education

More than 1/3 claim to have a big or very big exploitation of research results

Source: IOBE, 2004

Trends and Perspectives of the IT sector

37% of IT companies feel optimistic 60% feel reserved, with companies <10 people appearing

more optimisticReasons for optimism: Increase of until today low use of ICT and therefore bigger

spreading of ICT to the population and companies (SMEs) Acceleration of IS works, creation of a substantial mass of

users in the business and general public will motivate the until today stagnant/negative market

Cost reduction of infrastructure/ equipment and usage of telecommunication services

Higher standardization of solutions/products and therefore increase of turnover with parallel cost reduction

Source: IOBE, 2004

Sources for the development of the sector

1. EU Enlargement

2. Spreading of ICT to other developing sectors of the economy, such as tourism

3. Good level of higher and highest technical education

4. Quality of personnel in the labor market for the companies in the sector

5. Improvement of the overall economic climate

6. Finalization of regulatory framework (mainly telecommunications)

7. Continuation of development of Information Society

8. Customization of existing software applications

9. Opening up towards the markets

Source: IOBE

Obstacles for the development of the sector

1. Software piracy 2. Limited size of national market 3. Level of user attitude to the new technologies4. Organizational level of user companies 5. Due to the lack of outside funds the companies’ own

funding is limited6. Approaching foreign markets is not easy, esp. for SMEs7. Still poor infrastructure that limits development 8. The big multinationals are profiting from the

development coming from the Olympic Games

Source: IOBE (March 2004)

IT Companies’ Strategic goals

1. Increase of market share in the existing IT market in the existing markets 2. Sales increase through development of new IT technologies3. Sales increase through introduction of existing IT in new sectors 4. Introduction of existing IT in new geographic markets5. Emphasis on added value of the offered software applications, adjusted to

the client. 6. Focusing on specified client groups (market niches)7. Emphasis on the organizational flexibility of the company8. Emphasis on cost cutting by reducing staff9. Realization of mergers and acquisitions

Source: IOBE study 2004