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Information and Communications Technology in North Rhine-Westphalia Facts Information and communications technology in North Rhine-Westphalia Facts. Figures. www.nrwinvest.com Information and communications technology in North Rhine-Westphalia data: as of October 2016 2 Information and communications technology in North Rhine-Westphalia Facts & figures In North Rhine-Westphalia (NRW), the lead market information and communica- tions technology (ICT) is both an important pillar and a powerful pacemaker for the economy. It offers new value-added and employment opportunities, as well as contributing in a major way to strengthening the state as an innovative tech- nology and service location. In the next few years the ICT sector will remain cru- cial for the competitiveness, innovativeness and economic power of the region, particularly because innovation is usually made possible by important develop- ments in advanced ICT and its application. The dynamic process, and above all the increasing transfer of business pro- cesses to the internet, has already had a significant impact in recent years: 40 percent of productivity growth in the European Union is attributable to the produc- tion and use of information and communication technologies. In 2012 the increas- ing level of digitalisation in Germany generated growth of around 145 billion eu- ros, exports increased by 49 billion euros and an additional 1.46 million people were employed (BITKOM 2014). This potential is put to strategic use in NRW and has economic leverage effects: In 2014, the around 23,600 ICT companies in the state employed more than 206,000 people and generated sales of approx. 101 billion euros. This accounts for 16.2 percent of the gross domestic product in NRW. With sales of approx. 43 billion euros the information technology (IT) sector alone numbers more than 174,000 employees subject to social security contributions (2014). The Rhine-Ruhr region distinguishes itself in many areas of IT and software development. The IT companies based in the state include such international market leaders as Atos, HP, IBM, Itelligence, Materna and Toshiba. In addition, NRW is the top telecom- munications industry (TC) location in Germany. Four of the big players in the TC industry – Deutsche Telekom, Ericsson, Huawei Technologies and Vodafone – have their headquarters along the "Rhine axis". In 2014, the telecommunications sector in NRW generated sales of more than 57 billion euros with approx. 32,000 employees. NRW therefore has a very strong ICT sector. In order for it to remain a competi- tive location in future, the integration of ICT and intelligent products as well as production and service processes has to be promoted – an area known today as “Cyber Physical Systems” (CPS). By interlinking information and communica- tion technologies and embedded systems in CPS, previously separated indus- tries, disciplines and social spheres are connected – Cyber Physical Systems are changing processes in industry and services companies fundamentally. It is al- ready evident that traditional industry boundaries are disappearing and estab- lished value chains are being broken up – and this will be even more so the case in future: it is expected that the number of mobile internet users will increase by Information and communications technology in North Rhine-Westphalia data: as of October 2016 3 2020 to 3.8 billion people worldwide (GSMA 2014) and more than 25 billion net- worked devices will communicate with each other. The revenue that can be gen- erated with networking services alone is expected to increase from 70 billion dol- lars (2015) to 263 billion dollars by 2020 (Gartner 2014). The degree of networking will range from the simple temperature sensor to the production system that monitors fully the entire production process, adapts to customer requirements and automatically sends information about its mainte- nance status to the company headquarters via cloud computing. It is expected that the digitalisation process started in the 1990s will speed up significantly and previously unaffected sectors will change disruptively: new markets and com- pletely new types of applications and services will rapidly emerge (see Accenture 2014; BITKOM 2014; Detecon 2013). These processes and developments offer huge growth potential for NRW with its major strengths in ICT basic technologies and the economically-strong industrial sectors. NRW is still Germany’s number one state for industry, measured by abso- lute industrial output and the number of people employed in the manufacturing sec- tor. At the same time a highly productive and diverse ICT landscape has emerged that covers all of the skills required for the development of digital innovations. In particular, the market for Industry 4.0 has great future potential for NRW. By 2025, the use of such applications can generate approx. 15.6 billion euros in gross value added alone in the core industries of the state. First and foremost, production will benefit from this momentum. The Big Data Market in particular has great future potential for NRW. Sales of 1.4 billion euros were already achieved in Germany in 2015. In 2020, sales of 3.75 billion euros are predicted and thus growth rates of around 20 percent per year. With its broad-based IT landscape, NRW can play a leading role in this growth market. It is of crucial im- portance that Big Data technologies are linked to Smart Data solutions. In particular small and medium-sized enterprises (SMEs) and start-ups may benefit from the all-encompassing digitalisation. The concept of cloud computing will play an important role here: with IT services provided via the internet, tailored software systems and IT resources will also be affordable for SMEs and the use of compu- ting capacity and services can be adapted to the needs of the user. It is expected that the market for cloud computing will grow in Germany in 2016 by 34 percent to 11.8 billion euros. While nearly 70 percent of large corporations make use of the opportunities offered by this technology, the proportion of smaller companies with up to 99 employees is already over 50 percent, and over 60 percent in companies with 100 and more employees (2015). Three-quarters of companies place great im- portance on the location of the data center being in Germany. NRW is the number one state in Germany for IT security: the Federal Office for Information Security is based in Bonn; the Horst-Görtz Institute at the Ruhr-Uni- versity Bochum is the largest institute in Europe (800 students, 100 researchers) specialising in the protection of digital technology. Companies such as Secusmart (Düsseldorf) and Secunet (Essen) help to protect among other things the data of government offices. Information and communications technology in North Rhine-Westphalia data: as of October 2016 4 The expansion of powerful and future-proof broadband networks is one of the most important requirements for NRW’S economy to remain competitive and inno- vative. Studies show that high-performance broadband connections and fast Next Generation Access/NGA networks have become a major location factor for many companies, in particular in the ICT sector. Companies in all sectors today face global competition, need remote access to systems and have to make home-office solutions possible. In addition, data-intensive cloud services, smart grid applica- tions and data exchange are becoming increasingly important. Here not only high data rates, but also fast reaction times and symmetrical connections are required. NRW is one of Germany’s top states for broadband coverage: more than 77 per- cent of households are provided with broadband with over 50 Mbit/s. In urban ar- eas this figure is up to 98 percent (e. g. Bonn, Cologne, Leverkusen). Compared to the rest of Germany, only the city states Hamburg, Berlin and Bremen have better broadband coverage (50 Mbit/s). NRW will invest around half a billion euros into the expansion of broadband by 2018 in order to ensure that it maintains its position among the top states. An interactive map showing the expansion status in the cities and districts can be found at www.breitband.nrw.de. The wireless communication standard LTE (Long Term Evolution = 4G) has now been available since the end of 2010. In NRW, supply is almost comprehensive in its coverage at 98.6 percent, ranking fourth in a federal state comparison, directly behind the city states of Berlin, Bremen and Hamburg. The next stage of develop- ment that is required to meet the ever-growing demands for communications net- works with things communicating more and more with each other is called 5G. One of the leading companies in this field is Huawei, but numerous other scien- tific and business stakeholders in NRW have also recognized the relevance and potential of this new mobile standard. 5G promises very high data transfer speeds, high scalability for IoT services as well as real-time capability and reliabil- ity, which are especially important for developments in the area of Industry 4.0 or Connected Cars. Foreign trade ICT imports into Germany rose by 14.3 percent in 2015 compared to 2014 and to- talled 103 billion euros in 2015. Imports into NRW even rose in the same period by 11 percent to 20.4 billion euros, accounting for approx. 20 percent of Ger- many’s imports. China remains as expected the number one importer; its share is almost 50 percent, and its trading volume of 9.5 billion euros has once again in- creased considerably. Japan and the USA follow some way behind. Germany’s ICT exports also rose significantly in 2015 compared to 2014 by 8.7 percent and totalled 97.5 billion euros. NRW’s share was approx. 8 percent, which equates to almost 7.8 billion euros. The main buyer countries were France and the Nether- lands, but with a strong increase from 0.6 to 0.7 billion euros China moved up from last year's second place to first place for the first time.
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