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

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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

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Development and Implementation

Author: Christian Egetemeyr, Reinhard Knödler Editorship: Thomas

Schwarz DTP/Graphics:Florian Lenz, Gabriele Hass Technical Manager:

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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 inter-national 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 Technolo-gies sector provides for innovations in the information technolo-gies, the “backbone” of the knowledge economy, and the com-panies and households in the state distinguish themselves in a European comparison by an above-average internet usage.

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Labor force in der ICT- and cultural/creative industries*) according to branches of industry in Baden-Württemberg 2008

ICT-business Vehicle

construction Mechanical

engineering

*) 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

155 68 315 238 232 Cultural/creative

industries Chemicalindustry in 1 000

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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 indus-tries 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 in-dustry 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 bil-lion Euros. The mostly small structured companies in the cul-tural and creative industries totaled 28 000 with overall sales of about 19 billion Euros.

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Structure of the ICT and cultural and creative industries*) in Baden-Württemberg 2008 according to branches of industry

and market sectors

in %

*) Proportion of the labor force or employees subject to social insurance contributions and self-employed in Cultural and creative industries 2007.

Source: own calculations.

ICT-business Cultural and creative industries

Other Office machines and

DP equipment Teleservices Radio, television and telecommunications technology Measurement, control and automation technology

Data processing and databanks (software businesses and IT service providers)

Art market Music- and film industries, Market of the performing arts Book market Architecture market Radio industry and press market Design economics and advertising market Software-/games industry (Software businesses) Other 45 23 16 10 2 4 44 16 12 10 9 6 1 2

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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 compari-son 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 cul-tural 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 automa-tion technology. Here the employment ratio is 23 % and also clearly above the corresponding national average of about 16 %.

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Labor force*) in Baden-Württemberg 2000 to 2008

*) 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.

2000 = 100 Overall economy Cultural/creative industries ICT 112 110 108 106 104 102 100 2000 01 02 03 04 05 06 07 08

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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 econ-omy 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 devel-opments in the individual industries. The outstanding employ-ment 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 tel-ecommunications equipment, furthermore, in the architectural and advertising markets, the film industry as well as the book and press markets.

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Employed persons in the ICT industries*) in Baden-Württemberg 2000 to 2008

*) Including trade with ICT goods. Source: Own calculations.

208 232 102 132 106 ₁₀₀ in 1 000 2000 2008 ICT-service providers*) ICT-producers of goods + 12% + 30% – 6%

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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 ap-plication 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 inter-locking of modern Information and Communication Technolo-gies with traditionally strong application industries, such as vehicle construction and mechanical engineering, electrical engineering or medical device technology.

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ICT patent applications with the European Patent Office per million inhabitants

Sources: OECD, own calculations. Data: 2005.

Baden-Württemberg Finland Switzerland Sweden Netherlands Japan Germany Korea USA France United Kingdom Ireland Italy Spain 140 139 96 90 79 70 65 64 42 40 30 20 14 5

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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 innova-tion. Furthermore, important references are revealed about the technological productivity of a state. Baden-Württemberg be-longs 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-av-erage number of patents from domestic inventors can be allo-cated to the automation or measurement and control technol-ogy segment, which increasingly find application in so-called „embedded systems”, particularly in mechanical engineering and vehicle construction.

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31-31-09-009 © Kartengrundlage GfK GeoMarketing GmbH Statistisches Landesamt Baden-Württemberg

Bo_de nse_e Ravensburg Bodenseekreis Konstanz Waldshut Lörrach Karlsruhe Baden-Baden Rastatt Ortenaukreis Breisgau-Hochschwarzwald Freiburg i. Br. Emmendingen Schwarzwald- Baar-Kreis Tuttlingen Rottweil Freudenstadt Tübingen Zollernalbkreis Reutlingen Biberach Sigmaringen Alb-Donau-Kreis Ulm Heidenheim Ostalbkreis Schwäbisch Hall LKR Heilbronn Heil-bronn Ludwigsburg Rems-Murr-Kreis Göppingen Esslingen Stuttgart Böblingen Calw Enzkreis Pforz-heim LKR Karlsruhe Rhein-Neckar-Kreis Heidel-berg Mann-heim Main-Tauber-Kreis Neckar-Odenwald-Kreis Hohenlohe-kreis Low (below 2,5)

Significance of the ICT business*) in the urban and administrative districts of Baden-Württemberg 2007

ratio in %

Middle (2,5 to 5,5) High (more than 5,5)

National value: 4,1

*) Proportion of those employed in ICT businesses compared to the overall labor force. Data source: Own calculations.

State Information System

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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 com-pared 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 advan-tages 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.

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31-31-09-010 © Kartengrundlage GfK GeoMarketing GmbH Statistisches Landesamt Baden-Württemberg

Bod ensee Ravensburg Bodenseekreis Konstanz Waldshut Lörrach Karlsruhe Baden-Baden Rastatt Ortenaukreis Breisgau-Hochschwarzwald Freiburg i. Br. Emmendingen Schwarzwald- Baar-Kreis Tuttlingen Rottweil Freudenstadt Tübingen Zollernalbkreis Reutlingen Biberach Sigmaringen Alb-Donau-Kreis Ulm Heidenheim Ostalbkreis Schwäbisch Hall LKR Heilbronn Heil-bronn Ludwigsburg Rems-Murr-Kreis Göppingen Esslingen Stuttgart Böblingen Calw Enzkreis Pforz-heim LKR Karlsruhe Rhein-Neckar-Kreis Heidel-berg

Mann-heim Neckar-Odenwald- Main-Tauber-Kreis Kreis

Hohenlohe-kreis

National value: 3,7

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)

State Information System

Map prepard with RegioGraph *) Proportion of the cultural and creative industries out of all persons employed (subject to social insurance contributions and the self-employed).

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regionally concentrated

Almost half the persons employed in the cultural and crea-tive industries of the state can be allotted to only five coun-ties, 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 mar-ket, the broadcasting industries and the architectural marmar-ket, 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.

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Companies with an own website*) in Baden-Württemberg and selected countries of the EU 2008

in % Sweden Denmark Netherlands United Kingdom Germany Austria Baden-Württemberg Belgium EU-15 France

*) Proportion of all companies which have internet access. Source: Eurostat.

90

88 86 81 81 81 80 78 71 57

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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 %.

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Usage of e-business applications for customer data management*) in Baden-Württemberg and selected

countries of the EU 2008 in % Sweden Finland Denmark Netherlands United Kingdom Germany Austria Baden-Württemberg EU-15 France

*) Companies which have used software solutions such as CRM (Customer Relationship Management). Proportion of all companies, which use computers.

Source: Eurostat.

54

48 45 37 34 31 30 29 20 18

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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 hav-ing 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 coun-tries, 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.

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Use of e-business applications for supply chain management*) in Baden-Württemberg and selected

countries of the EU 2008 in % Finland Denmark Netherlands United Kingdom Germany Austria Baden-Württemberg Belgium EU-15 France

*) Proportion of all companies using computers. Source: Eurostat.

36

23 20 20 17 15 13 12 12 8

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Backlog of demand in Baden-Württemberg for

electronic supply chain management

Electronic supply chain management is the strongest inte-grated 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 appli-cations.

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 %, how-ever, and in Belgium it even achieves 36 %.

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Internet usage of employees*) in Baden-Württemberg and selected countries of the EU 2008

in % Finland Denmark Netherlands United Kingdom Germany Austria Baden-Württemberg Belgium EU-15 France

*) Proportion of employees who use the internet at least once per week for all employees. Source: Eurostat.

64

62 52 48 45 43 43 43 42 39

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About half of those employed in

Baden-Württemberg regularly use the internet

Knowledge and creativity of employees in the global econ-omy have become an important competitive factor. The in-ternet 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 regu-larly 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 %.

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Use of internet-supported learning programs*)

in Baden-Württemberg and selected countries of the EU 2008

in % Finland Denmark Netherlands United Kingdom Germany Austria Baden-Württemberg Belgium EU-15 France

*) 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.

41

30 29 26 25 24 23 16 15 14

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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 possibil-ity of integrating further education into daily company rou-tine.

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 mere-ly 23 %. In Germany and in Baden-Württemberg, this value is about 15 % and clearly below average. It is in fact the low-est 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 %.

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Sweden Denmark Netherlands Italy Germany Austria Baden-Württemberg Spain EU-15 France

*) Proportion of all private housholds with at least one member aged between 16 and 74. Source: Eurostat.

86

84 82 75 75 69 64 62 51 47

Private households*) with access to the internet in Baden-Württemberg and selected European countries of the EU 2008

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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 house-holds in the European Union have access to the internet. The number of households without network access is still never-theless 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 house-holds are “in the net”. In Sweden and in Denmark, on the other hand, this is more than 80 % - thanks to specific incen-tives. Baden-Württemberg and Germany are with 75 % in the middle.

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Private housholds*) with broadband access in Baden-Württemberg and selected countries of the EU 2008

in % Sweden Denmark Netherlands Italy Germany Baden-Württemberg Spain EU-15 France

*) Proportion of all private housholds with at least one houshold member aged between 16 and 74 years. Source: Eurostat.

74

74 71 62 57 56 55 52 45 31 United Kingdom

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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.

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Persons who frequently use the internet*)

in Baden-Württemberg and selected countries of the EU 2008

in % Sweden Denmark Netherlands Italy Germany Baden-Württemberg Spain EU-15 France

*) Proportion of all persons aged 16 to 74 years. Daily or almost daily use in the last three months before the survey.

Source: Eurostat.

71

69 67 53 51 51 47 46 35 34 United Kingdom

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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.

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Persons with online purchases*) in Baden-Württemberg and selected countries of the EU 2008

in % Sweden Denmark Netherlands Austria Germany Baden-Württemberg Spain EU-15 France

*) Proportion of all persons aged 16 to 74 years. Without financial investments. Source: Eurostat.

49

47 43 43 42 38 29 28 28 13 United Kingdom

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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 Den-mark and the United Kingdom performed only slightly better then Baden-Württemberg and Germany with a proportion of internet shoppers of just about 50 %.

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Sweden Denmark Netherlands Italy Germany Baden-Württemberg Spain EU-15 France 47

47 33 29 28 28 25 25 24 15 United Kingdom

Persons using the internet for learning purposes*) in Baden-Württemberg and selected countries of EU 2008

in %

*) Proportion of all persons aged 16 to 74 years. Usage for learning purposes in the last three months before the survey.

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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 wide-spread 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 inter-net 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. Al-most half of the 16 to 74-year olds searched the net for learn-ing purposes in France and Denmark.

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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 fol-lowing 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 busi-nesses)

• Teleservices/ telecommunication service providers

• Leasing of office machines, data processing equipment and facilities

• Wholesaling with data processing equipment, peripheral units and software

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• 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.

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The market sector “software/games industry”, which is included within the ICT services in the area of “data processing and data-banks”, 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 tech-nology (ICT) in companies and private households is carried out in countries of the European Union as a methodically harmo-nized survey. The surveys take place once annually. In 2008, a total of 1 350 companies and 1 600 households in Baden-Würt-temberg 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 indus-try”, “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 sur-veyed companies in Baden-Württemberg.

EU-15 countries are the countries of the Euro-zone as well as the United Kingdom, Denmark and Sweden.

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www.statistik-bw.de

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