Where ideas work. ICT Business and Creative Industries in Baden-Württemberg STATISTICAL OFFICE

Where ideas work. ICT Business and Creative Industries in Baden-Württemberg STATISTICAL OFFICE

Where ideas work. imprint ICT Business and Creative Industries in Baden-Württemberg published and distributed by Statistical office of Baden-Württemberg With kind support of the Ministry of Economics Baden-Württemberg product code 8062 09003 photo credits Popakademie Baden-Württemberg Filmakademie Ludwigsburg Statistisches Landesamt Baden-Württemberg, Stuttgart, 2009 Any reproduction and free distribution for noncommercial purposes permitted with acknowledgement of the source. Digital distribution only with prior approval. All other rights reserved.

ICT Business and Creative Industries in Baden-Württemberg

Development and Implementation Author: Christian Egetemeyr, Reinhard Knödler Editorship: Thomas Schwarz DTP/Graphics: Florian Lenz, Gabriele Hass Technical Manager: Wolfgang Krentz Repro/Print: TYPOfactory Stuttgart GmbH 2

Preliminary remarks Globalization has extraordinarily accelerated the economic structural transformation. In the industrial countries, industrial production is becoming less important. Economic centers are formed where sophisticated services can be provided for international corporations, for example, in the area of research and development or in coordination. Knowledge and creativity are the decisive prerequisites. Baden-Württemberg offers these prerequisites, as can be shown by the selected key data in this brochure. Creative business is an important economic factor in a state, in which multiple services based on knowledge are provided. Baden-Württemberg s Information and Communication Technologies sector provides for innovations in the information technologies, the backbone of the knowledge economy, and the companies and households in the state distinguish themselves in a European comparison by an above-average internet usage. 3

Labor force in der ICT- and cultural/creative industries*) according to branches of industry in Baden-Württemberg 2008 315 in 1 000 238 232 155 68 Mechanical engineering Vehicle construction ICT-business Cultural/creative industries Chemical industry *) Cultural and creative industries: Employees subject to social insurance contributions and self-employed persons 2007. Source: Working group Labor force calculation of the Federation and the state (AK ETR), own estimate. Statistisches Landesamt Baden-Württemberg 1069 09 4

ICT business and creative industries Approximately 232 000 persons are employed in the ICT business of the state - around 155 000 are active in the cultural and creative industries The Southwest is nationwide a significant location for the ICT and cultural and creative industries. More than 18 % of those individuals working throughout Germany in the ICT business are in Baden-Württemberg, in the cultural and creative industries about 16 %. In comparison: the state quota of the labor force in Germany amounts to about 14 %. According to this, the overall economical significance of both branches of industry in Baden-Württemberg is above the federal average. In total, the 13 000 companies subject to sales tax in the ICT business of the state last achieved sales of more than 65 billion Euros. The mostly small structured companies in the cultural and creative industries totaled 28 000 with overall sales of about 19 billion Euros. 5

Structure of the ICT and cultural and creative industries*) in Baden-Württemberg 2008 according to branches of industry and market sectors ICT-business Other Office machines and DP equipment Teleservices Radio, television and telecommunications technology 4 2 10 16 in % Cultural and creative industries Other 2 1 Art market 6 Music- and film industries, Market of the performing arts 9 Book market 10 Architecture market Measurement, control and automation technology 23 12 16 Radio industry and press market Design economics and advertising market Data processing and databanks (software businesses and IT service providers) 45 44 Software-/games industry (Software businesses) *) Proportion of the labor force or employees subject to social insurance contributions and self-employed in Cultural and creative industries 2007. Source: own calculations. Statistisches Landesamt Baden-Württemberg 1070 09 6

ICT business and creative industries The software industry has the highest numbers of employees The software industry is part of the ICT business as well as the cultural and creative industries and in this respect by far the most employment-intensive branch as such. In comparison to Germany, the local domestic ICT business and cultural and creative industries are particularly specialized in this area. For example, the employed proportion of the so-called software-/games industry (software businesses) in the cultural and creative industries of the state was last seen to be more than 44 %, on the other hand, nationwide it was only about 33 %. In the ICT business, other specialization advantages are emerged in the area of measurement, control and automation technology. Here the employment ratio is 23 % and also clearly above the corresponding national average of about 16 %. 7

Labor force*) in Baden-Württemberg 2000 to 2008 2000 = 100 112 110 108 106 ICT 104 Cultural/creative industries 102 Overall economy 100 2000 01 02 03 04 05 06 07 08 *) Cultural and creative industries: Employees subject to social insurance contributions and the self-employed. 2008 estimate. ICT: labor force, own calculation. Overall economy: labor force. Statistisches Landesamt Baden-Württemberg 1071 09 8

ICT business and creative industries ICT, Cultural and Creative Industries with strong Growth Impulse The annual average employment growth rate in both branches of industry has been more than twice that of the overall economy since 2000. In total, the number of persons employed in the ICT business of the state increased by about 24 000 persons in 2008 versus 2000; in the cultural and creative industries this figure was an estimated 17 000. This positive overall picture is the result of very different developments in the individual industries. The outstanding employment motor has been the software business and the IT service providers, which since the year 2000 have alone created about 25 000 additional jobs. Marked employment decreases were seen, on the other hand, by the manufacturers of DP and telecommunications equipment, furthermore, in the architectural and advertising markets, the film industry as well as the book and press markets. 9

Employed persons in the ICT industries*) in Baden-Württemberg 2000 to 2008 in 1 000 + 12% 232 208 102 + 30% 132 ICT-service providers*) 106 6% 100 ICT-producers of goods 2000 2008 *) Including trade with ICT goods. Source: Own calculations. Statistisches Landesamt Baden-Württemberg 1072 09 10

ICT business and creative industries ICT services are becoming more important The change from the industrial to a knowledge-based and service provider society can clearly be observed in the ICT industries. A generally dwindling importance of the industrial sector for the ICT economy is, however, not inferable. On the one hand, industry and service providers in the ICT sector, due to the merging of digital technologies ( convergence ), can often hardly be differentiated from one another. On the other hand, the interdisciplinary technology as an innovation driver is becoming more and more embedded in industrial IT application industries. The strengths of the technology location Baden-Württemberg lie thereby exactly in the expert interplay of industry and service providers and in the innovative interlocking of modern Information and Communication Technologies with traditionally strong application industries, such as vehicle construction and mechanical engineering, electrical engineering or medical device technology. 11

ICT patent applications with the European Patent Office per million inhabitants Baden-Württemberg Finland 140 139 Switzerland 96 Sweden 90 Netherlands 79 Japan Germany Korea 65 64 70 USA France 42 40 United Kingdom 30 Ireland 20 Italy 14 Spain 5 Sources: OECD, own calculations. Data: 2005. Statistisches Landesamt Baden-Württemberg 1073 09 12

ICT business and creative industries About 1500 ICT patent applications from domestic inventors Patent applications give an indication of inventor activity and as a partial process between research, development and innovation. Furthermore, important references are revealed about the technological productivity of a state. Baden-Württemberg belongs worldwide to the top group of ICT patent applicants after the USA (12 457), Japan (8 981), Germany (5 319), Korea (3 085), France (2 495) and the United Kingdom (1 776) with about 1 500 patent applications made to the European Patent Office. The most ICT patent applications worldwide come from the Southwest relative to the number of inhabitants. An above-average number of patents from domestic inventors can be allocated to the automation or measurement and control technology segment, which increasingly find application in so-called embedded systems, particularly in mechanical engineering and vehicle construction. 13

Significance of the ICT business*) in the urban and administrative districts of Baden-Württemberg 2007 Low (below 2,5) Middle (2,5 to 5,5) High (more than 5,5) ratio in % National value: 4,1 LKR Karlsruhe Pforzheim Rhein-Neckar- Kreis Neckar-Odenwald- Kreis LKR Heilbronn Heidelberg Mannheim Main-Tauber- Kreis Hohenlohekreis Schwäbisch Hall Rastatt Baden- Baden Karlsruhe Calw Enzkreis Böblingen Ludwigsburg Stuttgart Esslingen Heilbronn Rems-Murr- Kreis Göppingen Ostalbkreis Heidenheim Freudenstadt Tübingen Ortenaukreis Rottweil Zollernalbkreis Reutlingen Ulm Alb-Donau- Kreis Emmendingen Freiburg i. Br. Schwarzwald- Baar- Kreis Tuttlingen Sigmaringen Biberach Breisgau-Hochschwarzwald Konstanz Ravensburg Lörrach Waldshut Bodenseekreis Bodensee *) Proportion of those employed in ICT businesses compared to the overall labor force. Data source: Own calculations. Statistisches Landesamt Baden-Württemberg State Information System 31-31-09-009 Kartengrundlage GfK GeoMarketing GmbH Map prepard with RegioGraph 14

ICT business and creative industries Highest significance of the ICT business in the Rhine-Neckar district The ICT industries are an outstanding employment factor also in the town and county of Karlsruhe, in the city boroughs of Ulm and Stuttgart as well as in the administrative district of Böblingen. The proportion of those employed in the ICT industry compared to all employed persons in the county is markedly higher here than the state average. Thus, it is not unusual that these counties belong to the largest ICT sites in the state - more than 45 percent of all employed persons in the ICT industries of the state can be allotted to these counties. This top position can be largely attributed to specialization advantages within the range of ICT services. Specialization in ICT services is, however, not a compulsory prerequisite for a significant ICT business. Thus, the radio, television and communications technologies also help, e.g. in the Black Forest (Baar) and the Lake Constance county, or the measurement, control and automation technologies in many counties to achieve a meaningful ICT business. 15

Significance of the cultural and creative industries*) in the urban and administrative districts of Baden-Württemberg 2007 ratio in % Low (below 2,5) Middle (2,5 to 5,5) High (more than 5,5) National value: 3,7 Rastatt Baden- Baden Karlsruhe Calw Pforzheim Rhein-Neckar- Kreis LKR Karlsruhe Enzkreis Böblingen Neckar-Odenwald- Kreis LKR Heilbronn Ludwigsburg Stuttgart Esslingen Heilbronn Rems-Murr- Kreis Heidelberg Mannheim Main-Tauber- Kreis Hohenlohekreis Göppingen Schwäbisch Hall Ostalbkreis Heidenheim Ortenaukreis Freudenstadt Rottweil Tübingen Zollernalbkreis Reutlingen Ulm Alb-Donau- Kreis Emmendingen Freiburg i. Br. Breisgau-Hochschwarzwald Schwarzwald- Baar- Kreis Tuttlingen Sigmaringen Biberach Konstanz Ravensburg Lörrach Waldshut Bodenseekreis Bodensee *) Proportion of the cultural and creative industries out of all persons employed (subject to social insurance contributions and the self-employed). Data source: Own calculations. Statistisches Landesamt Baden-Württemberg State Information System 31-31-09-010 Kartengrundlage GfK GeoMarketing GmbH Map prepard with RegioGraph 16

ICT business and creative industries Cultural and creative industries are strongly regionally concentrated Almost half the persons employed in the cultural and creative industries of the state can be allotted to only five counties, where this branch of industry has a particularly high proportion of the overall employed. These are: the Rhine- Neckar district, the city boroughs of Karlsruhe, Stuttgart and Baden-Baden and the administrative district of Böblingen. Their specialization advantages are distributed differently in comparison to the state: the Rhine-Neckar district as well as in the urban district of Karlsruhe have a specialization in the software/games industry, the state capital in the book market, the broadcasting industries and the architectural market, Böblingen in the design economies (industrial design) and in Baden-Baden in the broadcasting industry. Although altogether only a few counties are specialized in the market sector Software/Games Industry, for the majority of the city boroughs and administrative districts of the state this is the strongest market sector for employment of the cultural and creative industries. 17

Companies with an own website*) in Baden-Württemberg and selected countries of the EU 2008 in % Sweden 90 Denmark 88 Netherlands 86 United Kingdom 81 Germany 81 Austria 81 Baden-Württemberg 80 Belgium 78 EU-15 71 France 57 *) Proportion of all companies which have internet access. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1076 09 18

Internet usage in companies Above-average internet presence of companies in Baden-Württemberg The internet provides a possibility to open up new markets and to bind customers more strongly to companies. The company s own website has become an important marketing instrument. The current products and services of the company can be presented on it. In the European Union, most companies who have access to the internet have developed their own internet presence. This respective ratio is about 71 % in the EU-15 countries. In Baden-Württemberg and in Germany this value has even reached about 80 %. These values lie considerably higher than that in the neighboring country France. The Netherlands with a value of 86 % and Denmark with 88 % score even better. Sweden has now even reached 90 %. 19

Usage of e-business applications for customer data management*) in Baden-Württemberg and selected countries of the EU 2008 in % Baden-Württemberg 54 Austria 48 Germany 45 Sweden 37 Finland 34 Netherlands 31 EU-15 30 Denmark 29 France 20 United Kingdom 18 *) Companies which have used software solutions such as CRM (Customer Relationship Management). Proportion of all companies, which use computers. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1077 09 20

Internet usage in companies Professional customer data management is of considerable significance in Baden-Württemberg By means of e-business applications in the area of customer relationship management (CRM), all information which is available about a customer and is important for business relationships, is managed centrally and made available to all company divisions. This enables smoother cooperation for all employees having contacts with the customer. The objective is to strengthen customer loyalty. In the European Union, however, this e- business application is not very common. In the EU-15 countries, the proportion of companies using this instrument is only about 30 %. Germany with 45 % is markedly above this value and in Baden-Württemberg more than half of the companies use a CRM application. As such, it is at the fore within the EU. 21

Use of e-business applications for supply chain management*) in Baden-Württemberg and selected countries of the EU 2008 in % Belgium 36 Denmark 23 Finland 20 Austria 20 EU-15 17 Baden-Württemberg 15 Netherlands 13 France 12 Germany 12 United Kingdom 8 *) Proportion of all companies using computers. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1078 09 22

Internet usage in companies Backlog of demand in Baden-Württemberg for electronic supply chain management Electronic supply chain management is the strongest integrated e-business approach. It comprises the exchange of all types of data with suppliers or customers along the value chain, for example, during product development, production or sales. In the European Union, supply chain management is only used by a small proportion of companies. Only 17 % of companies in the EU-15 countries use such e-business applications. Baden-Württemberg lies with a value of 15 % slightly below this quota. Germany has a definite backlog with 12 %. In the Scandinavian countries, this value is more than 20 %, however, and in Belgium it even achieves 36 %. 23

Internet usage of employees*) in Baden-Württemberg and selected countries of the EU 2008 in % Denmark 64 Finland 62 Netherlands 52 Baden-Württemberg 48 Germany 45 United Kingdom 43 Belgium 43 Austria 43 EU-15 42 France 39 *) Proportion of employees who use the internet at least once per week for all employees. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1079 09 24

Internet usage in companies About half of those employed in Baden-Württemberg regularly use the internet Knowledge and creativity of employees in the global economy have become an important competitive factor. The internet offers the prerequisites for the optimum usage of this potential for those employed in company operations. In the companies of the European Union, however, this still only plays a minor role: less than half of all employees regularly use the internet in their professional jobs. In the EU-15 countries, this proportion is only about 42 %; in Germany and in Baden-Württemberg it is only slightly higher with 45 % and 48 %, respectively. In the Scandinavian countries, on the other hand, the proportion of employees who regularly use the internet has a value of about 60 %. 25

Use of internet-supported learning programs*) in Baden-Württemberg and selected countries of the EU 2008 in % Finland 41 Austria 30 Denmark 29 United Kingdom 26 Belgium 25 France 24 EU-15 23 Netherlands 16 Baden-Württemberg 15 Germany 14 *) Companies which use e-learning for the training and further education of their employees. Proportion of all companies having access to the internet. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1080 09 26

Internet usage in companies E-learning is only seldom used in companies in Baden-Württemberg Where the production factor knowledge is becoming more and more important, the significance of acquiring knowledge is also increasing. E-learning offers in particular the possibility of integrating further education into daily company routine. In the EU, this possibility is, however, only very seldom used. In the EU-15 countries, the proportion of companies using E- learning for the further education of their employees is merely 23 %. In Germany and in Baden-Württemberg, this value is about 15 % and clearly below average. It is in fact the lowest value within the EU. In Finland the quota is almost three times as high with 41 %. In Denmark and Austria the ratio is still at least about 30 %. 27

Private households*) with access to the internet in Baden- Württemberg and selected European countries of the EU 2008 in % Netherlands 86 Sweden 84 Denmark 82 Baden-Württemberg 75 Germany 75 Austria 69 EU-15 64 France 62 Spain 51 Italy 47 *) Proportion of all private housholds with at least one member aged between 16 and 74. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1081 09 28

Internet usage in private households Three-quarters of households in Baden-Württemberg are online About 20 years after the internet marked its triumph as a means of mass communication, the majority of the households in the European Union have access to the internet. The number of households without network access is still nevertheless quite considerable, however. In den EU-15 countries, the average proportion of households with internet access is only about 64 %. There is very clearly a north-south divide: in Italy and in Spain only half of all households are in the net. In Sweden and in Denmark, on the other hand, this is more than 80 % - thanks to specific incentives. Baden-Württemberg and Germany are with 75 % in the middle. 29

Private housholds*) with broadband access in Baden-Württemberg and selected countries of the EU 2008 in % Netherlands 74 Denmark 74 Sweden 71 United Kingdom 62 France 57 Baden-Württemberg 56 Germany 55 EU-15 52 Spain 45 Italy 31 *) Proportion of all private housholds with at least one houshold member aged between 16 and 74 years. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1082 09 30

Internet usage in private households Broadband services below the Scandinavian level In the meantime, many services on the internet can only be used with a fast broadband connection. In the European Union, only about one half of households have such effective access to the internet. In the EU-15 countries, the proportion lies around 52 %. Here, too, a North-South divide is evident. In Italy, less than one third of households have broadband access, in Spain there are still nevertheless at least 45 % of households. In Germany and Baden-Württemberg, more than half the households are equipped with broadband. However, the shortfall compared to the Scandinavian countries Sweden and Denmark have quotas of over 70 %, respectively is still quite considerable. 31

Persons who frequently use the internet*) in Baden-Württemberg and selected countries of the EU 2008 in % Denmark 71 Sweden 69 Netherlands 67 United Kingdom 53 Baden-Württemberg 51 Germany 51 France 47 EU-15 46 Italy 35 Spain 34 *) Proportion of all persons aged 16 to 74 years. Daily or almost daily use in the last three months before the survey. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1083 09 32

Internet usage in private households The internet is still only daily routine for half the population A prerequisite for the use of the multiple services which the internet provides is confidence in this medium. However, use of the internet is still only part of daily life for less than half of all Europeans. In the EU-15 countries, only 46 % of persons between 16 and 74 years of age are online almost every day. In Germany and in Baden-Württemberg, the quota is around 51 % and thus only a little bit higher than the European average, but still way below the value of about 70 % for the Scandinavian countries, which is also achieved in The Netherlands. All the same, the net is used much more intensively in Baden-Württemberg and Germany than in Italy and Spain. There only about one third of the 16 to 74-year olds surf the web every day. 33

Persons with online purchases*) in Baden-Württemberg and selected countries of the EU 2008 in % United Kingdom 49 Denmark 47 Netherlands 43 Baden-Württemberg 43 Germany 42 Sweden 38 EU-15 29 Austria 28 France 28 Spain 13 *) Proportion of all persons aged 16 to 74 years. Without financial investments. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1084 09 34

Internet usage in private households Shopping in the internet is popular in Baden-Württemberg Private individuals use the internet above all for gathering information and for entertainment. In Baden-Württemberg and in Germany, shopping also plays a very important role, however. More than 40 % of persons between 16 and 74 years said that they purchased goods or services in the internet at least once within three months in 2008. This quota was clearly above the average in the European Union. In the EU-15 countries, only 30 % of private persons went on a shopping spree in the net in 2008. Even the front-runner Denmark and the United Kingdom performed only slightly better then Baden-Württemberg and Germany with a proportion of internet shoppers of just about 50 %. 35

Persons using the internet for learning purposes*) in Baden-Württemberg and selected countries of EU 2008 in % France 47 Denmark 47 Sweden 33 EU-15 29 Baden-Württemberg 28 Germany 28 United Kingdom 25 Spain 25 Italy 24 Netherlands 15 *) Proportion of all persons aged 16 to 74 years. Usage for learning purposes in the last three months before the survey. Source: Eurostat. Statistisches Landesamt Baden-Württemberg 1085 09 36

Internet usage in private households The net is only used by a minority in Baden-Württemberg for learning Other than the shopping in the net, systematic learning with the help of the internet is not particularly strongly widespread in Germany and Baden-Württemberg. Merely 28 % of the population between 16 and 74 years said that they had searched the internet over a three-month time period for educational purposes in 2008. This value corresponds to the average for the EU-15 countries. In Italy and Spain the quota is only slightly lower. The internet is used markedly seldom for educational purposes in The Netherlands. There the value was 15 %. On the other hand, the French and the Danes clearly proved to be more studious. Almost half of the 16 to 74-year olds searched the net for learning purposes in France and Denmark. 37

ICT Business According to the internationally recognized OECD definition from the year 2002, all facilities are included here, which enable the processing and transferring of information in digitalized form and by electronic means. The ICT business is divided into the following areas: ICT Production of Goods Office machines and data processing technology Radio and communications technology (including the manufacture of electronic components) Measurement, control and automation technology Manufacturers of insulating electric cables, lines and wires ICT Services Data processing and data banks (including software businesses) Teleservices/ telecommunication service providers Leasing of office machines, data processing equipment and facilities Wholesaling with data processing equipment, peripheral units and software Wholesaling with electronic components 38

Explanations Cultural and Creative Industries According to the definition of the Economic Federal Ministers Conference from the year 2008, these include those cultural and creative companies, which are mainly business-oriented and are concerned with the creation, production, distribution and/or medial distribution of cultural/creative goods and services. The cultural and creative industries are divided into the following partial markets: Music industry Book market Art market Film industry Radio industry Market for the performing arts Design industry Architecture market Press market Advertising market Software/games industry (software businesses) (Other) Subordinate branches of industry are partially allocated several market sectors. However, consideration of the total branch of industry takes place without double-counting respective groups. 39

The market sector software/games industry, which is included within the ICT services in the area of data processing and databanks, is considered to represent a significant subset of the ICT industries. Due to double-counting, both sectors by implication cannot be summarized to give an overall group. Internet usage in companies and private households A census of the usage of information and communication technology (ICT) in companies and private households is carried out in countries of the European Union as a methodically harmonized survey. The surveys take place once annually. In 2008, a total of 1 350 companies and 1 600 households in Baden-Württemberg as well as the persons living in these households were surveyed by the State Statistical Office Baden-Württemberg. The data published in this brochure correspond to the division of characteristics according to the Statistical Office of the European Communities (Eurostat). Details on companies refer to those with at least 10 employees in the economic sectors processing industry, building industry, trade, hospitality industry and transportation, renting and company services and the sector film, radio and television (NACE Rev. 1). These results are based on data from 830 surveyed companies in Baden-Württemberg. EU-15 countries are the countries of the Euro-zone as well as the United Kingdom, Denmark and Sweden. 40

Where ideas work. contact Statistisches Landesamt Baden-Württemberg Böblinger Straße 68 70199 Stuttgart phone +49711/ 641-0 (reception) telefax +49711/ 641-24 40 poststelle@stala.bwl.de www.statistik-bw.de information your point of contact for all recent and historic statistics about Baden-Württemberg, its regions, administrative districts, and municipalities phone +49711/ 641-28 33, telefax - 29 73 library the reference library for everybody phone +49711/ 641-28 76, telefax - 29 73 press office annually about 400 press releases on any current issue phone +49711/ 641-24 51, telefax - 29 40 distribution ordering of publications phone +49711/ 641-28 66, telefax - 13 40 62 contact time monday to thursday from 9 a.m. 3.30 p.m., friday from 9 a.m. to 12 p.m.