Monitoring the Information Economy
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1 Monitoring the Information Economy Prepared by: Dr. Sabine Graumann Florian Neinert Munich, April
2 Germany s Positioning Top Positions worldwide No. 1 in Europe European Leadership Improvements Penetration rates Internet usage (Rank 5) Internet usage in enterprises (Rank 3) Usage of E-Commerce in enterprises (Rank 2) Telephone lines (Rank 5) Integration of new ICT technologies in enterprises (Rank 4) Absolute values Internet usage costs (Rank 2) Internet users by language (Rank 5) Number of SSL servers (Rank 3) Number of DSL lines (Rank 5) Number of broadband lines (Rank 6) Penetration rates Usage of , Internet, LAN, WAN in enterprises Enterprises with own website Usage of E-Procurement in enterprises Usage of B2B marketplaces E-Commerce as percent of total trade revenues Absolute values ICT revenues Telecom revenues Number of Internet users Number of ISDN channels E-Commerce revenues B2B revenues M-Commerce revenues Online banking users 2 Penetration rates Internet usage (Rank 2) Households with Internet access (Rank 2) Women online (Rank 2) ISDN channels (Rank 4) Computer usage in SMEs (Rank 3) Absolute values IT revenues Growth rate ISDN channels (Rank 3) B2C revenues (Rank 2) B2B marketplaces (Rank 2) Number of WLAN Hotspots (Rank 4) Basic salary of IT workers (1st year) (Rank 2) Households with cable modems (Rank 4) Number of online ad campaigns (Rank 2) Penetration rates Ownership of PCs Mobile phone subscriptions Internet hosts Households with broadband access Usage of E-Government among citizens Absolute values declining Digital Divide of Internet users by gender Decline of Internet access costs Broadband connections E-Government offers
3 Germany s need for action (1) Business environment: Influence the general business environment in a way that stimulates international competitiveness for the German information industry (supply as well as demand), e.g. stimulate employment, enable competitive labour costs, encourage liberalisation of the labour market. Legal Framework: Further develop an appropriate legal framework, particularly increasing Internet security (supporting usage of electronic signatures, reinforcing personal property rights, preventing spamming, finalize new law on (digital) intellectual property rights, create new harmonized media regulations both at the federal and the state (Laender) level. Internet-Policy: Encourage the development of the Internet as a mass media and fourth culture. Enhance Internet access by reducing the digital divide: guarantee equal opportunities for all citizens regardless of age, gender, education even for disabled people. Increase number of public Internet access and training facilities. E-Business and Policy for SME s: Integrate the Internet into the established patterns of all media and business processes such as information, communication or transaction. Realign the corresponding operational reorganisation measures or inter-company co-operations leading to a change of the traditional value chain. Reach a mature e-business (transaction) level and participate in global supply and demand markets. Consulting and education of small and medium-sized enterprises (SME s). Increase awareness for knowledge management and Internet security. Improve financial conditions and access to capital for SME s. 3
4 Germany s need for action (2) E-Government: Realize "BundOnline as fast as possible. See importance of E-Government as an important future market sector of the Internet industry. Enable transfer of local development to other local or regional e-government suppliers. Co-ordinate e-government projects at local level with "DeutschlandOnline. Closely follow the MEDIA@Komm-Transfer initiative. Encourage e-procurement and e-democracy. Public Sector: Empower the public sector as an information supplier. R&D. Encourage usage of open source software. Support usage of IT and telematics in health care. Telecommunication Policy / Information Industry Politics: Further reduce Internet access costs. Encourage the development of new (mobile) Internet access technologies, particularly increase broadband penetration. Develop DSL to the most used Internet access technology. Encourage market liberalisation of the fixed network telephony, but also in other areas (e.g. health care, environment, mobility, audiovisual media). Protecting Germany s security ("Bundesamt für Sicherheit ) means in future to secure ICT applications of the Internet as well as in-house applications of enterprises. Political Communication / PR Work: encourage co-operations of associations to promote the information industry. Establish regular contacts between the information industry and politicians. 4
5 Germany s need for action (3) Labour market, education and qualification: Realize appropriate organizational and internal reforms of public institutions in view of all Internet applications. Support co-operation between educational organizations and the information industry. Basic Internet and information competencies must be part of all educational programmes at all levels. Improve media competencies of senior citizens, still employed or retired. Use parents or schools as active teachers of information and media competencies. Improve English language skills. Profit from co-operation possibilities among the information industry. Encourage regular use of ICT for educational purposes. Information Industry Policy: Encourage co-operations between German suppliers and private end users not only in the framework of this project Monitoring the Information Industry. Establish a public Information Industry forum open to all market participants involved. Technology Politics: stimulate international competition of German suppliers also from the private sector - providing ICT solutions for E-Commerce or E-Business. Further support new businesses in the high technology area. Align R&D activities with innovation, convergence of ICT with other technologies. Maintain market leadership in mobile communication systems. 5
6 Monitoring the Information Economy Overview Information Industry Outlook Employees in the information industry Information technology Telecommunications Infrastructural Preconditions Broadband DSL PC penetration Fixed lines Mobile communications Internet access costs Applications Internet usage E-Commerce B2B E-Commerce E-Business in enterprises B2C E-Commerce M-Commerce E-Government Online Banking Online Advertising 6
7 Monitoring the Information Economy Information Industry Outlook 7
8 The information industry causes profound changes within the German society and economy The information industry was also affected by global recession. Nevertheless, Germany was able to improve its global ICT positioning significantly to 10th position worldwide. The ICT industry and labour market outlook is positive for E-Society: The information industry will continue to create new employment possibilities and will support economic growth in future. For further growth to continue, deregulation efforts in all ICT related industries need realization. The Internet has become a key economic factor and Germany is now the most important E-commerce market in Europe. E-Competence: For the further development of the German information society, the demands for qualified personnel and for media competence are of major importance. E-Business: Company integration of electronic, Internet enabled processes in their value chains improves business processes, and supports collaboration efforts between companies both within the EU and globally. E-Technology: A strong growth in demand for mobile applications and service will continue. E-Government: E-Government has become one of the major areas of E-implementation. Public sector demand of ICT products and services fuels the information industry. 8
9 Information Technology and Telecommunications Based on the number of employees, ICT is one of the leading industries in Germany Germany: Number of employees in selected industries in 1, * and percentage change from 2002 Mechanical engineering 1,029 (-2.6%) Vehicle production 859 (-0.3%) ICT 751 (-3.8%) Food industry 696 (-1.8%) Paper, print, publishing industries 494 (-3.5%) Chemical industry 473 (-0.9%) * ICT: 31 Dec 2003 all other industries: 31 Jun 2003 Statistisches Bundesamt/BITKOM,
10 Information Technology and Telecommunications In 2003 the number of employees in the ICT industry continued to decline Germany: Number of employees in the ICT industry by sector 2003 and change y-o-y in percent, IT hardware 95,000 (-4.0%) Communication technology 68,000 (-5.6%) 2003 Software and IT services 363,000 (-3.2%) 2003* ,000 (-3.4%) 474,000 (-3.7%) 492,000 (+0.4%) 490,000 (+17.2%) 293,000 (-4.6%) 307,000 (-6.1%) 327,000 (-0.9%) 330,000 (+0.9%) 751,000 (-3.8%) 781,000 (-4.6%) 819,000 (-0.1%) 820,000 (+10.1%) Telecom services 225,000 (-4.3%) ,000 Information technology 327, ,000 Telecommunication Totals and percentages may not add up due to rounding. BITKOM, January 2004 *Estimate 10
11 Information Technology and Telecommunications In 2004, Germany remains market leader in the Western European ICT sector Western Europe: IT and telecommunication market in billion EUR 2004 and in percent, Other countries 21.2% Germany 21.2% Netherlands 5.2% Spain 6.1% Italy 11.0% 2004 France 14.9% UK 20.4% EITO, March
12 Information Technology and Telecommunications Germany remains the third-largest ICT market worldwide Worldwide: IT and telecommunication market in percent, 2003 and 2004 Previous year s figures in brackets Germany 6.1% (6.2%) Germany 6.0% Japan 12.3% (12.6%) USA 32.4% (32.9%) Japan 12.0% USA 32.0% Rest of World 24.8% (24.0%) 2003 Europe* (without Germany) 24.4% (24.4%) Total market 2003: 2,071 billion EUR (2002: 2,043 billion EUR ) Rest of World 25.8% * incl. Eastern Europe: Czech Republic, Hungary, Poland, Russia, Slovakia, Slovenia 2004 Total market 2004: 2,160 billion EUR Europe* (without Germany) 24.2% Germany 2003: 126 billion EUR Totals and percentages may not add up due to rounding. EITO, March 2004 Germany 2004: 129 billion EUR 12
13 Monitoring Information Economics Infrastructural Preconditions 13
14 In the US cable modems are the dominating broadband technology, while most other countries prefer DSL Worldwide: Number of broadband connections per 100 households by technology, 2003 Japan United States Denmark Sweden Norway DSL France United Kingdom Switzerland Cable modem and other technologies Western Europe* Spain Finland Germany ,2 11,2 * including Turkey figures rounded Italy Eastern Europe 0,3 0,6 0, BITKOM, February
15 Infrastructural Preconditions Germany is one of the European countries with the highest DSL penetration rates Europe: Number of DSL connections per 1,000 inhabitants, 2003 Denmark 78 (59) Sweden 63 (45) Germany France Norway Finland Switzerland Italy UK Spain 54 (40) 50 (27) 43 (24) 41 (26) 38 (23) 35 (17) 30 (11) 27 (17) Previous year s figures in ( ) EITO, March 2004/TNS Infratest (own calculations) 15
16 Infrastructural Preconditions Germany is among the leading countries worldwide in ISDN penetration Worldwide: Number of ISDN channels per 100 inhabitants in selected countries, 2003 Norway Denmark Switzerland Germany Japan Finland Western Europe Sweden Italy France UK Spain USA Eastern Europe 15 (15) 13 (13) 13 (14) 12 (11) 9 (8) 7 (6) 6 (6) 5 (5) 1 (0.6) 26 (24) 40 (40) 35 (39) 32 (29) 31 (30) Previous year s figures in ( ) * incl. Turkey BITKOM, February
17 Infrastructural Preconditions The PC penetration in Germany exceeds the Western European average Worldwide: Number of PCs per 100 inhabitants, 2003 USA Norway Sweden Denmark Netherlands Switzerland Japan Finland UK Germany France Western Europe Austria Ireland Belgium Italy Portugal Spain Greece 18 (17) 16 (15) 15 (14) 11(10) 46 (45) 45 (47) 41 (43) 39 (39) 38 (38) 36 (35) 32 (30) 31(30) 30 (29) 29 (29) 28 (27) BITKOM, February (57) 56 (56) 55 (54) 86 (86) Previous year s figures in ( ) 17
18 Infrastructural Preconditions In the last years, the number of mobile subscriptions has grown substantially more than the number of fixed lines Germany: Number of fixed lines and mobile phone subscriptions in million, ,2 48,2 52,3 56,1 59,1 53,7 53,9 63, * Fixed lines Mobile phone subsciptions RegTP, December 2003 * preliminary figures 18
19 Infrastructural Preconditions The mobile phone penetration in Germany exceeds the European average Europe: Mobile phone subscriptions per 100 inhabitants in selected countries, 2003 Sweden Italy Spain Finland UK Denmark Norway Switzerland Germany Western Europe France Eastern Europe 24 (n.a.) 66 (64) 77 (71) 76 (70) 85 (80) 84 (72) 82 (78) 82 (78) 94 (91) 91 (77) 89 (87) 95 (82) * incl. Turkey Previous year s figures in brackets BITKOM, February
20 Monitoring Information Economics Applications 20
21 Internet Usage By 2006, nearly 6 out of 10 Germans will use the Internet Germany: Internet users per 100 inhabitants and growth rate in percent, Internet users per 100 inhabitants Growth rate in percent BITKOM,
22 Internet Usage To date, in 7 of the 16 German states more than half of the population uses the Internet Germany: Internet usage* by state in percent, % and more 46.6% to 50.2% * Age 14+, Internet usage at least once in the past 12 months from any place TNS Emnid, June % and below Berlin 56.6% Hamburg 54.0% Hesse 53.9% Baden-Wuerttemberg 51.7% Schleswig-Holstein 51.7% Bavaria 50.9% Lower Saxony 50.3% NRW 49.4% Rhineland-Palatinate 48.3% Brandenburg 47.9% Thuringia 47.9% Saxony 47.1% Bremen 46.7% Saarland 46.6% Saxony-Anhalt 45.5% Mecklenburg-Vorp. 42.9% 22
23 Internet Usage Nearly 80 percent of all men between 14 and 39 years are Internet users Germany: Internet users* and usage planners by gender and age in percent of the population, Women Onliner Usage planners years years years years years years 70+ years Men years years years years years years 70+ years * Age 14+, Internet usage at least once in the past 12 months from any place TNS Emnid, June
24 Internet Usage In the UK and Germany, more than half of the women, compared to approx. nearly two thirds of all men are online Europe: Internet users* in percent of the male and female population, November 2003 Men Women 65 UK Germany Italy France Spain * Age 16+, usage at home European average EITO, January
25 Internet Usage In the countries surveyed, Germany reaches the highest penetration rate in the age group Western Europe: Internet users* by penetration rate in the age groups in selected countries in percent, November 2003 UK Germany Italy France Spain Top 5 EU average years years years years years 65+ years * Age 16+, usage at home EITO, January
26 Canada South Korea USA Japan Germany UK France China* Mexico* Brazil* India* South Africa* Russia* Internet Usage The highest Internet usage rates are observed in Canada, South Korea and the USA Worldwide: Internet users* in selected countries in percent of the population and in million, % (6) 15% (2) 21% (5) 19% (3) 37% (5) 43% (18) 41% (6) 54% (23) 60% (39) In brackets users in million 68% (128) 65% (56) 71% (16) 70% (23) * Usage from any place within the last 30 days * Urban areas only Ipsos-Insight, January
27 Internet Usage Europe has the largest share of Internet users Worldwide: Internet users* by region 2003 and in percent, Rest of World 5% Latin America 7% Japan 8% Europe 28% Region North America Europe Asia/Pacific Japan Latin America Asia/Pacific 25% North America 26% Rest of World 5 5 * Usage at home and at work 6 Morgan Stanley, September
28 Internet Usage 41 percent of all Europeans own an Internet-enabled mobile phone Worldwide: Owners and users of Internet-enabled mobile phones in percent, April 2003 Owners 82 Japan Users* Europe Asia/Pacific North America World total 34 * Base: owner of an Internet-enabled mobile phone A.T. Kearney, June
29 Internet Usage Significant gender differences exist in utilisation of online services Germany: Usage of online services by gender in percent of the Internet users*, 2003 Men Women s 91 s 89 Download software 74 Travel information 74 Product information 72 Reference, dictionaries 70 Reference, dictionaries 72 Education information 70 Travel information 71 Event and club news 69 Weather 70 Weather 68 Education information 70 Time tables 67 Political news 68 Product information 59 Event and club news 68 Political news 55 Computer topics 66 Download software 50 Time tables 66 Cosmetics information 50 Sports news 62 Health information 49 * years Institut für Demoskopie Allensbach (ACTA),
30 E-Commerce Germany is by far the largest E-Commerce market in Western Europe Western Europe: E-Commerce revenues in selected countries in billion EUR, 2003 und Germany UK France Italy B2B B2C Spain EITO, March
31 E-Commerce Western Europe accounts for 30 percent of the worldwide E-Commerce volume in 2004 Worldwide: E-Commerce revenues by region in billion US-Dollar and in percent, 2000 und 2004 Rest of World 7.6% (20.8 bn.) Asia/Pacific 2.6% (7.3 bn.) Rest of World 6.4% (163.6 bn.) Asia/Pacific 5.1% (130.4 bn.) Japan 11.8% (32.3 bn.) Western Europe 25.6% (70.3 bn.) Japan 14.3% (363.1 bn.) 2000 USA % (143.9 bn.) Western Europe 30.5% (774.3 bn.) USA 43.6% (1,107.4 bn.) Total 2000: billion US-Dollar Total 2004: 2,538.9 billion US-Dollar Totals and percentages may not add up due to rounding. Global Industry Analysts, April
32 B2B E-Commerce The European share of the global B2B market will increase in the future, while the North American market declines Worldwide: B2B E-Commerce revenues by region in billion US-Dollar and in percent, 2003 and 2006 Europe 17.0% (314.1) Latin America 0.2% (4.1) Middle East/Africa 0.1% (1.8) Europe 19.7% (1,042.6) Latin America 0.4% (20.8) Middle East/Africa 0.1% (4.6) Asia/Pacific 17.1% (316.1) Total 2003: 1,853.2 billion USD North America 65.7% (1,217.0) Asia/Pacific 21.7% (1,147.0) Total 2006: 5,294.0 billion USD North America 58.2% (3,079.0) Totals and percentages may not add up due to rounding. Computer Economics, June
33 B2B E-Commerce Nearly 40 percent of all B2B marketplaces worldwide are located in Europe Worldwide: Number of B2B marketplaces by region, February 2004 Australia/ Oceania 66 Middle East/Africa 56 Latin America 70 Asia/Pacific 194 Europe 530 Total: 1,016 websites (= main location) with 1,345 branches in the individual countries North America 429 emarket Services, February
34 B2B E-Commerce In Europe the highest number of B2B marketplaces is in the UK and Germany Europe: Number of B2B marketplaces in selected countries, February 2004 UK 132 (112) Germany 121 (222) Spain 91 (18) Italy 76 (19) Netherlands 70 (26) France 62 (45) Sweden Norway 28 (2) 42 (29) Europe total: 530 Denmark Poland 19 (7) 11 (n.a.) Previous year s figures (Juli 2002) in brackets Finland 10 (n.a.) Russia 7 (n.a.) emarket Services, February
35 E-Business in enterprises Nearly 100 percent of all large and medium sized enterprises have access to the Internet Worldwide: Internet usage in enterprises by number of employees in selected countries in percent*, employees employees employees 250+ employees South Korea Ireland Germany Australia Italy Sweden USA Canada Japan France UK * All enterprises weighted by number of employees Department of Trade and Industry,
36 E-Business in enterprises The E-Commerce activities of German enterprises exceed the international average Worldwide: E-Commerce activities of enterprises in selected countries in percent* 2003 Sweden Germany Japan South Korea Ireland Canada Australia USA UK Italy France * All enterprises weighted by number of employees Department of Trade and Industry, Enterprises with online ordering facilities Enterprises which order online 36
37 E-Business in enterprises In 41 percent of all German enterprises the integration of internal systems is under way or completed Worldwide: Businesses with integrated internal systems in percent of enterprises*, 2003 South Korea Japan Yes, already integrated USA Germany UK Sweden Yes, currently integrating Yes, specific plans in place Undecided Canada No systems to link Ireland No, see no value France Australia No, too costly Italy Base: Enterprises with LAN, WAN or Intranet * All enterprises weighted by number of employees Department of Trade and Industry,
38 E-Business in enterprises A growth in revenues was achieved in 30 percent of all E-Business implementation cases Germany: E-Business achievements in small and medium sized enterprises* in percent, 2003 Stabilisation of revenues 52 (46) Shorter delivery times Stabilisation of distribution costs Cost-saving payment procedures Increase of revenues Decrease of distribution costs Stabilisation of storage costs 39 (50) 38 (33) 36 (30) 30 (39) 29 (28) 24 (19) Previous year s figures in brackets Decrease of storage costs Other achievements 7 (6) 14 (19) Base: 312 interviewees * employees TechConsult/IBM/impulse,
39 E-Business in enterprises High costs is a major factor against the implementation of E-Business Germany: Reasons against the implementation of E-Business solutions in percent of SMEs*, 2002 and 2003 Does not meet our needs Costs too high Low client acceptance Low acceptance from management Missing knowledge Technology not yet mature enough Missing security standards Secure payment cannot be guaranteed Restructuring efforts too high Unsure about legal background Cannot be integrated in existing IT infrastructure Base: 154 interviewees * employees TechConsult/IBM/impulse,
40 B2C E-Commerce With more than 15 billion EUR of revenues in 2003, Germany was the second largest B2C market in Europe Western Europe: B2C E-Commerce revenues in selected countries in billion EUR and percent of total revenues, 2003 and 2007 Other Western Europe 14.1 billion (22.3%) Spain 2.9 billion (4.6%) Italy 5.9 billion (9.4%) France 8.0 billion (12.7%) Total 2003: 63.1 billion EUR Totals and percentages may not add up due to rounding. UK 16.8 billion (26.6%) Other Western Europe 71.7 billion (22.2%) Spain 15.1 billion (4.7%) Germany 15.4 billion (24.4%) Italy 35.4 billion (11.0%) EITO, March 2004 France 53.1 billion (16.5%) Total 2007: billion EUR Germany 81.6 billion (25.3%) UK 65.7 billion (20.4%) 40
41 B2C E-Commerce One out of four Germans has already bought rail and flight tickets or holiday journeys online Germany: Top 10 of online bought products and services in percent of Internet users, 2003 Books Auctions Travel booking Rail and flight tickets Hotel reservations Theater & concert tickets CDs Apparel Computer hardware Video, DVDs Institut für Demoskopie Allensbach (ACTA),
42 M-Commerce Germany takes the lead in M-Commerce in Western Europe Western Europe: M-Commerce revenues in selected countries in million EUR, 2003 and 2007 Western Europe 24,710 Country CAGR in % Germany 280 5, UK 212 4, France 127 4, Italy 44 1, Spain Others Western Europe 410 7, ,099 Total Western Europe 1,099 24, EITO, March
43 E-Government In Germany, the number of online available government services lies below the European average Western Europe: Online available government services in percent of all government services, October 2003 Sweden Denmark Ireland Austria Finland Norway France UK Netherlands Portugal Spain Italy Belgium Iceland Switzerland Greece Germany Luxembourg 87 (0) 86 (4) 86 (1) 83 (27) 80 (4) 75 (9) 73 (10) 71 (9) 65 (11) 65 (7) 64 (0) 59 (2) 58 (11) 56 (3) Growth to previous year in percentage points in brackets 55 (6) 54 (2) 52 (4) 47 (15) Cap Gemini Ernst & Young, October
44 E-Government In Europe, the Dutch and Scandinavians are leaders in E-Government usage Western Europe: Usage* of E-Government services in selected countries in percent of inhabitants, 2003 Denmark Norway Finland Netherlands 63 (53) 62 (54) 58 (49) 52 (41) France Spain Ireland Germany Italy UK 35 (25) 32 (26) 30 (26) 26 (24) 24 (20) 18 (13) Previous year s figures in brackets * In the last 12 months (from November 2003) Sweden did not participate in the 2003 survey Taylor Nelson Sofres, November
45 Contacts & Reports TNS Infratest Business Intelligence Landsberger Strasse 338 D Munich Contacts: Dr. Sabine Graumann (+49-89) Florian Neinert (+49-89) (+49-89) Free Downloads: Factual Report (full version, ca. 500 pages, German) Chart Report (selection of the most important charts, German/English) Management Summary All Graphs from the Report 45
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