Chris Schmidt - istockphoto. Digital Economy in Germany - Business opportunities for British tech companies

Transcription

1 Chris Schmidt - istockphoto Digital Economy in Germany - Business opportunities for British tech companies Julia Oentrich London, June 11th 2014

2 Agenda I. What is Germany Trade and Invest? II. III. IV. Why Germany? Opportunities in Germany s Digital Economy Berlin and Beyond V. Contact

3 Germany Trade and Invest The foreign trade and inward investment promotion agency of the Federal Republic of Germany German Parliament Resolutions for Founding/Financing Federal Government Federal Ministry for Economic Affairs and Energy - Shareholder Company Tasks Investment Attraction Export Promotion Location Promotion

4 Germany Trade and Invest We promote Germany as a business location abroad and support foreign companies on their way to Germany Invest GTAI consults potential foreign investors in terms of their settlement plans and realizes the required project management support in Germany Marketing GTAI promotes Germany abroad as a highperformance economic and technology location. Trade GTAI supports export-oriented companies based in Germany with comprehensive foreign market information.

5 Why Germany? Germany is Europe s leading economy GDP and Population in the European Union and other Countries (2012) GDP (in EUR bn) Share of total GDP (EU 27) Population (in m) Share of total Population (EU27) Germany 2,644 21% 82 16% France 2,030 16% 65 13% UK 1,899 15% 63 13% Italy 1,566 12% 61 12% Spain 1,048 8% 46 9% Netherlands 601 5% 17 3% Sweden 408 3% 9 8% Poland 380 3% 39 2% Czech Republic 153 1% 11 2% Hungary 98 1% 10 2% Slovak Republic 71 1% 5 1% USA 12, Japan 4, EU 27 12, Eurozone 9,483 74% % Source: Eurostat 2013, US Census Bureau 2013, Japanese Statistics Bureau 2013; Note: France, Spain, Poland GDP 2012 forecast

6 Why Germany? Germany is shaped by SMEs 99.7 % With about 3.6 million registered small and medium sized companies (SME), the German Mittelstand comprises 99.7% of all enterprises. These companies each employ a staff of less than 500 employees % Almost 21 million people in Germany work for SMEs. With a share of 79.6% of all employees, the German Mittelstand is a major employment driver % German SMEs contribute strongly to the national economy s success. Their share of net value added amounts of 51.3%*. Note: data refer to 2009, *ifm estimation; Source: IfM Bonn 2012

7 Why Germany? Germany has a highly qualified and international workforce Science & Engineering Degrees (2010, % of total new degrees) Korea Finland Germany France* Czech Republic Spain Japan United Kingdom Slovak Republic Hungary Poland USA Netherlands Germany has one the highest shares of technical degrees in Europe Due to the large population, Germany has most technical graduates in absolute terms Germany attracts skilled people from all of Europe: 13% immigrants in 2012 than in 2011 Most immigrants come from Poland, Bulgaria, Romania and Southern European States 0,00 10,00 20,00 30,00 40,00 Science Degrees Engineering Degrees Note: No data available for China, 2009 data for France Source: OECD 2012

8 Why Germany? Germany offers an attractive cost base International Comparison of Cost-of- Living* (New York City = 100, 2013) Monthly office rents (Total costs, in USD/sqm per year, 2013) Poland 72,0 Hungary 74,8 USA 75,1 UK 78,1 Germany 78,6 Spain 82,8 Czech Republic 84,2 France 87,6 Netherlands 88,4 Slovak Republic 81,2 China 91,9 Japan 110,8 0,0 20,0 40,0 60,0 80,0 100,0 120,0 Note: *index of a basket of goods & services in major cities, including housing Source: IMD Competitiveness Report 2014 Spain Netherlands Canada Czech Republic Germany Poland Ireland USA Israel Sweden France Italy Norway United Kingdom Korea Switzerland India Singapore Brazil Japan Russia Hong Kong 336,4 439,3 471,5 511,0 538,9 563,9 570,0 597,7 637,9 646,4 654,2 700,7 721,9 821,7 922,6 1029,8 1029,9 1072,6 1248,2 1734,7 1776,6 2201,9 0,0 500,0 1000,0 1500,0 2000,0 2500,0

9 Why Germany? Germany is in the middle of Europe A state-of-the-art transportation infrastructure and logistics capabilities able to serve all European markets From Germany, nearly all of Europe can be reached by air in 3 hours and by road in 24 hours (flight, truck, and railway hours from Berlin). 3 h 1.5 h London Berlin Brussels Copenhagen 24 h Helsinki Stockholm 12 h Warsaw Riga Prague Paris Vienna Budapest 24 h Moscow EU member states Non-EU member states Madrid 48 h Rome Athens Source: Eurostat 2013 Note: EU-27 s center: 42 km east of Frankfurt/Main in Meerholz, Hessen, *Estimates

10 The German Digital Economy at a Glance Turnover of Germany s digital economy was about 70 EUR billion in 2012 which is equals about 3% of the national GDP Turnover of the Digital Economy in Germany (in EUR billion) ,9 14 2,8 22,5 24,4 4,5 1, ,5 15,7 2,5 70 EUR billion 21,1 23,9 4 1,7 Hardware B2B E-Commerce B2C E-Commerce 69 EUR billion Data Services Apps and IT Services ,5 14 2,2 19,9 23,2 3,6 1,6 Online Advertisement Online gambling and gaming 65 EUR billion ,1 12,5 1,4 18,7 21,9 3,2 1,2 59 EUR billion Source: TNS Monitor 2013

11 Opportunity I: Digital Marketing Digital Marketing created a turnover of 4.5 bn EUR in Germany in 2012 What topics have most potential for your organization in 2014?* User experience Mobile Content Marketing Cross-channel campaigns Personalization Social Media 20% 17% 18% 21% 15% 13% 10% 12% 10% 8% 10% 9% Customers Agencies The surveyed companies indicate that user experience is the most relevant topic for them in 2014 Agencies see mobile as the most relevant topic Especially Germany s SMEs are expected to demand an increasing amount of digital marketing services in the coming years Big Data 10% 11% Marketing Automatization 4% 4% Video 3% 5% * Survey of 980companies and 1,202 agencies Source: Digital Intelligence Briefing: Trend-Barometer 2014

12 Opportunity II: E-Commerce Almost every German internet user shops online Did you buy anything online in the last year? 92% 94% 73% of the population > 14 years Total turnover of E-Commerce was 39 bn EUR % of German internet users bought things online in 2013 Most internet shoppers (65%) buy goods online at least several times per month Germany has most digital buyers in Europe 8% 6% Yes No Source: Bitkom 2014

13 Opportunity III: Payment Systems Traditional payment systems are still dominating; Modern systems are gaining importance Payment systems used for online and mail-order commerce in Germany 40% 26% 32% 30% 41% 40% 27% 29% For purchasing goods online, Germans mostly make use of payment systems like PayPal and payment by bill Credit cards are not as widely spread as in other countries Trustworthy and secure payment systems are highly demanded Germans are traditionally cash payers Bill Direct debit** Pre-payment Payment systems* Credit card Other*** * e.g. PayPal, sofortueber-weisung.de; ClickandBuy; giropay ** This option was not part of the survey in 2011 *** e.g. cash on delivery; deferred payments; etc. Source :

14 Opportunity IV: Mobile Apps The app economy in Germany is growing at a fast pace Turnover with mobile apps in Germany (in EUR million) +625 % Turnover with mobile apps is expected to have reached 700 million in 2013 Most revenues come from direct app sales followed by income generated by ads German mobile data use increased in 2013 to 267 million gigabytes a growth of 71 percent on App sales Revenues from ads Source: Bitkom 2014

15 Opportunity V: Location Based Services The LBS sector increased more than 7-fold from 130 to 927 providers between 2012 and 2014 Number and annual growth of LBS providers in Germany Number of LBS Annual growth (in percent) 450% 400% CAGR: = 69.6% 350% 300% 250% 200% 150% 100% 50% The German market for LBS is dominated by mobility apps accounting for some 60 percent of the total Free and premium apps are the preferred revenue model for most providers, advertising is losing its appeal Monetization remains a challenge 0 0% Source: Goldmedia Analyse, 2014

16 Opportunity VI: Games The turnover of the German games industry was 1.8 billion EUR in 2013 Turnover of the German games industry (2013; in mln EUR) Console PC Virtual items Mobile console Consoles continue to be the biggest revenue driver in the German games market Revenues from virtual items and app downloads are gaining importance Germany has a rich gaming ecosystem which is open for companies from abroad Fees for online/browser games 139 Smartphone & tablet 39 Source: MS&C

17 Beyond Berlin Digital Economy in Germany Berlin is just one of the centers of Germany s digital economy Intensity of ICT Business Start-ups in Germany ( ) Hamburg Cologne/ Düsseldorf Berlin Munich is Germany s start-up capital (3.52 start-ups per 10,000 inhabitants) Berlin (2,67), the Frankfurt area (2.22) and Hamburg (2.21) follow Location choice should dependent on various factors such as costs, proximity to customers, workforce and networks Dresden/ Leipzig Frankfurt/ Main Munich High Medium Low Source: GfK Geomarketing; Datenmaterial aus dem Mannheimer Unternehmenspanel (ZEW) 2012

18 Tech Companies in Germany Germany is the home of the European start-up scene Want to join? Examples of international tech companies based in Germany

19 Tech Companies in Germany Germany is the home of the European start-up scene Want to join? Examples of international tech companies based in Germany

20 Thank you for your attention! Questions? Julia Oentrich Manager ICT Germany Trade and Invest GmbH Friedrichstraße Berlin, Germany Tel Fax Germany Trade & Invest All information provided by Germany Trade & Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided.