Study shows considerable growth opportunities - Use of ICT ranks only in the middle compared to other countries - ICT master plan and CIO requested by top political level - Increase in e-government and e-health could greatly increase productivity
The consistent use of information and communication technology (ICT) by the government and economy could generate approx. 75 billion euros of additional economic output by 2008. This could be achieved on the basis of an "ICT master plan" that involves an e-strategy and implementing measures to make use of growth potential in the ICT sector. This is the result of a study to be presented by The Boston Consulting Group (BCG), Deutsche Telekom and Siemens Communications (Com) in Berlin today. The ICT sector, which generates an annual economic output of more than 130 billion euros in Germany, is one of the most important branches of industry and, as an innovation driver, could accelerate technological innovation in its areas of application. In order to make consistent use of the potential of ICT for Germany, a national Chief Information Officer (CIO) should be appointed at federal level, who would coordinate the implementation of the ICT master plan for politics, business economy and citizens, according to the study's authors. The central demands of the package of measures include, for example, increased use of e-government and e-health in the public sector, as well as education and qualification-building programs and the promotion of innovation.
In the joint study entitled "Economic and political opportunities of the information society," the authors not only point out how the German ICT sector is positioned compared to international competition, but also shows the areas in which politics and the economy have to act in order to utilize the full potential of the ICT sector and implement economic growth for Germany.
According to Dr. Dieter Heuskel, Senior Vice President of The Boston Consulting Group, "The ICT sector in Germany has the potential, like the automotive industry, to lead the way in terms of quality standards, technical progress and international competitive strength. If German corporations which operate globally are to take on a kind of 'beacon' function, this will only be possible with competitive, high-quality application and supplier industries."
Christopher Schläffer, Corporate Development Officer of Deutsche Telekom AG, added, "All players are requested to participate actively in shaping the information society: service providers, that have to prove their international innovativeness and competitiveness through attractive products and service; the government, which has to establish clear conditions for ICT investments; and users, who must continually overcome learning challenges in order to keep pace with technological progress."
According to Dr. Thomas Ganswindt, member of the central board of management of Siemens AG and chairman of Siemens Communications board, "Germany can become the leading ICT nation by 2008 if politics, companies and citizens work together on implementing the master plan. Or to put it another way: if we don't act quickly, Germany will keep its middle rank in the top league of IT countries and might even have to deal with a relegation."
Contributing six percent to gross value added, the ICT sector ranks top within Germany and is much further ahead than the mechanical engineering, automotive or building sectors. In addition, with its above-average growth rates, the ICT sector already contributes a good third to the productivity growth in Germany.
However, in comparison with other countries, the German ICT sector is only middle-ranking and achieved much lower productivity gains in the last few years than comparable sectors in the UK, Sweden or the USA, for example. From 1995 to 2002 Germany only generated half the American productivity growth from ICT. According to the results of the study, Germany is way behind its potential.
This can be seen clearly by looking at international examples: South Korea increased the ICT contribution of its economy to 15 percent by a massive expansion of broadband infrastructure and by offering innovative broadband applications. With the introduction of the digital signature, Austria became the leading e-government user in Europe. The UK already introduced an extensive program for boosting efficiency in the public sector through the use of ICT in 2003, and intends to achieve savings totaling 30 billion euros by 2006/07. And even Australia has already introduced ICT successfully in public services: the Centrelink administration model provides an Internet portal with approx. 140 administration services and bundles the services previously offered by 32 public authorities.
Above all, the study highlights that Germany has a lot of catching up to do in terms of e-government and e-health. Both public ICT spending (0.6 percent of GDP) and the range of online administration services has developed much less than in comparable countries. In terms of public services alone, the authors believe that increased use of ICT through improved procedures and organizational forms has the potential for saving 27 billion euros annually. In addition, citizens and companies could face savings of approx. 10 billion euros per year through more efficient interaction with public offices.
In their master plan for more growth through ICT, the authors list eight points for recommended action and in doing so show how ambitious growth targets can be achieved by 2008:
1. Increase use of e-government and e-health to realize productivity gains in the public sector
2. Increase legal certainty and investment stability as a framework for establishing a leading international infrastructure and effective innovative competition
3. Integrate ICT training into school and vocational training plans ("networked teaching", e-learning)
4. Train 5,000 additional university graduates in the ICT sector
5. Promote ICT skills and widespread use in companies and public authorities
6. Increase the use of ICT in small and medium-sized businesses through the development and communication of innovative ICT programs
7. Establish foundation centers and innovation clusters for promoting innovation activities, the use of spillover effects and better knowledge transfer
8. Intensify R&D collaborations and improve the allocation of research activities to economic players and public institutions
In order to coordinate and drive forward the implementation of the master plan, the study suggests that the federal government create the position of a Chief Information Officer (CIO). In the information age, this role is vital in larger companies. For this reason, the position of a CIO, who would define and implement a cross-sector, forward-thinking ICT strategy and push forward e-government in the public sector at the same time, is also suitable for the "corporate giant" that is the Federal Republic of Germany.
Press contacts:
The Boston Consulting Group
Heidi Polke
Communications Press Relations
Tel: +49 (0) 89 2317 4594
E-mail: polke.heidi@bcg.com
Deutsche Telekom AG
Group Press Office
Tel.: +49 (0) 228 181 4949
Siemens AG
Press
Christina Dinné
Tel.: +49 (0) 89-722 53003
E-mail: christina.dinne@siemens.com
Further information for journalists and about the study can be downloaded from: www.telekom.de/media
www.siemens.de/communications/presse
www.bcg.de/presse/aktuell/index.jsp
The Boston Consulting Group The Boston Consulting Group is the world's leading strategic management consultancy. Together with its customers, BCG develops and implements innovative strategies that create major competitive advantages and improve corporate results in the long term. BCG was established in the USA in 1963 and currently has 59 offices worldwide, seven of which are in Germany with additional branches in Vienna and Athens. BCG generated revenue of 246 million euros with 550 consultants in these nine offices in 2004. BCG is a partnership owned by the managing directors and provides companies in all industries with consulting services.
Siemens Communications Siemens Communications is one of the world's largest service providers in the telecommunications industry. The company offers a complete portfolio of innovative solutions for voice and data communication. Its extensive range of services and products extends from terminal equipment to complex network infrastructures and services for companies and mobile and fixed network operators. The largest division of Siemens AG is represented in more than 160 countries and generated revenue exceeding 13 billion euros with approx. 54,500 employees in the 2005 financial year (ending September 30). Visit http://www.siemens.de/communications for more information on Siemens Communications.