German market

German Market KPI's

Get to know the German Market
Germany is a financially strong and healthy country. Economic growth in 2021 is expected to be at 2.5% and at 5.1% in 2022. Unemployment in 2021 is at 3.6%. This means the labour market is still tight

There was no World Economic Forum Global Competitiveness Report ranking in 2020. Instead the Transformation Readiness of Germany is compared to the neighboring countries: the Netherlands, Belgium, France and the UK.

Germany comes 3rd amongst its neighbors (scoring 62.9 out of 100) in the aggregated 2020 Economic Transformation Readiness Performance table.

The Netherlands is first with 66.3. Belgium is 2nd (63.6), France is 4th (62.7) and the UK end 5th(61.4).

Growth in IT Services

The IT sector has seen a limited impact from the corona crisis. The industry outlook is positive. In 2021, the IT industry is expected to grow with 6.2%  to €178.2 billion.

Information technology in the German Market will grow with 6.6% to €101.8 billion. This number is split between:

  • IT hardware growing 10.9% to €33.2 billion
  • IT services growing 3.7% to €41.1 billion, which makes this the largest share of the IT market
  • Software growing with 6% to €27.5 billion

Just as in the neighboring countries also in Germany is shortage of qualified IT staff forcing companies to be creative!

German market

German Market: Study IT-Trends 2021

According to a  Capgemini study in Germany, companies have high expectations from:

  • Safety and Security
  • Predictive Analytics
  • Protection against threats from IoT-enabled Devices
  • DevOps
  • Robotic Process Automation (RPA) without AI support

Technologies with low expectations:

  • Chatbots
  • voice control
  • virtual assistants
  • virtual & augmented reality
  • blockchain technologies
  • mobile wallets

Companies have an enormous need for digital and IT service providers​ that bring:

  • High level of IT competence​
  • UX design expertise​
  • Knowledge of development and implementation of customer-centric (product) strategies​
  • Ability to develop digital products and platforms from a single source and as a kind of general contractor​

Supplier preferences

When it comes to Maintenance & Development most CIO’s prefer to hire service providers from Germany. Other European countries come second. Few hire services from the USA or Asia (mainly international corporations).​ A small number wants to deglobalize (proportionally more are moving away from the US than from Asia)

Industry expertise

Germany has a large manufacturing industry. Automotive is the largest with 945 OEMs & Suppliers that have €435.3 billion revenue, followed by Mechanical engineering​ with 6,600 mostly SME businesses and €229 billion revenue. Chemicals consists of 2,000 mostly SME businesses with a total revenue of €198.3 billion.

Products (vehicles, machines, tools, electronic devices) are becoming more digital and networked​

This creates a large and interesting target base for IT companies. Contrary to some other European countries in Germany bringing only IT expertise doesn’t convince. You have to be able to demonstrate relevant IT expertise and experience for your target industry.

What does this information mean to you?

  • Germany is a strong economy with a large manufacturing industry. Companies that want to expand are not able to attract enough trained personnel
  • Germany is a difficult country to enter. Language can be an obstacle. Next to that German businesses have a preference to work with German suppliers. Unless you are able to demonstrate relevant industry knowledge you will not easily be accepted as a supplier. Foreign companies have to outperform the competition
  • The expected growth in the IT industry and the simultaneous acute shortage of well-trained IT personnel indicates that an influx of well-trained IT personnel is needed. 

What can you do to increase your chances?

  • Demonstrate the availability of well-trained IT personnel with relevant industry knowledge(CVs, company profiles, references)
  • Start branding your company in Germany through the German LinkedIn alternative Xing (Building trust takes time)

Additional information