Fraunhofer Institute for
Systems and Innovation Research ISI
Press Release 03.04.2017
The new study "The Economic and Social Impact of Software and Services on Competitiveness and Innovation" explores how Europe’s software and IT industry should position itself in the future in order to remain globally competitive. An impact analysis was conducted for numerous fields like big data, cybersecurity or the Internet of Things (IoT) and examined what share of the international market Europe holds and how the market will evolve in the near future. Based on these findings, the study derives recommendations for how Europe can become a leading provider of software and IT services in the long term.
The future competitiveness of the European economy will be decisively influenced by the digital transformation. Globally, this process will result in many new products and markets with rapidly increasing productivity rates. This is why it is so important for the digital economy in Europe to be able to build on a powerful software and IT industry.
How is this industry
performing at present and how should it position itself in future, above all
with respect to US and Asian competitors? These are precisely the questions
addressed in the new study "The
Economic and Social Impact of Software and Services on Competitiveness and
Innovation", conducted by the Fraunhofer Institute for
Systems and Innovation Research ISI together with Pierre Audoin Consultants
(PAC) and Le CXP on behalf of the European Commission. The study began by
analyzing different market segments, their current and future market and growth
potentials and then derived recommendations for how to make the European
software and IT industry much stronger in terms of its future competitiveness.
The first major finding of the study is that the European software and IT service industry is profiting directly from the digital transformation: The total EU market grew by 1.5 percent each year in the period from 2009 to 2015. The dynamics here will probably increase significantly up to 2020; the study forecasts an annual growth of up to 2.9 percent. Cloud computing is likely to show particularly strong growth, while other segments such as gaming software, application-based IT services or infrastructure software and platforms will evolve at a relatively constant rate. In contrast, the market in infrastructure-related IT services is likely to decline slightly up to 2020.
Fraunhofer ISI’s project team derived five major recommendations for the EU Commission from the insights obtained: First, an online platform should be created for e-skills, where IT experts can offer their services regardless of where they are located and in this way can cushion the effects of the lack of skilled IT workers in Europe. Second, the introduction of information and communication technologies in every economic sector should be accelerated and the creation of a market specialized in the intelligent connection of heterogeneous data of objects, processes and persons.
In addition, the enterprises
and public administrations in Europe should use open source software in the
future and expand their knowledge base here. Another focus should be on the
development of trustworthy cloud computing solutions and IT infrastructures
that respect user privacy and provide a high level of IT security. The fifth
recommendation is that research and development activities should be increased
in the field of information and communication technologies to create the
conditions needed for the software and IT industry to be competitive in future.
Dr. Bernd Beckert, who coordinated the research conducted at Fraunhofer ISI on the project, comments on the derived recommendations as follows: "In comparison to the US and Asia, whose respective strengths are in the development of software and hardware, the European software and IT industry is in a very good position concerning the management of complex systems. Obviously, this refers to the topic of Industry 4.0. But we in Europe need to go one step further and develop digital technologies for all types of objects and systems. We speak of ‘digital representations’ here. This incorporates physical objects as well as production processes or personal mobility patterns".
More and more
processes in business and private contexts are linked to digital data and
produce so called digital twins which are virtual images of physical processes,
according to Beckert. If these data are combined and linked - in order to make
online-shopping more personal or production processes in factories more
efficient, for instance – a huge market could evolve. A specialization in these
digital twins that also considers aspects like privacy protection and IT
security could become increasingly important for the European digital economy
in the future and should get more attention by European
The Fraunhofer Institute for Systems and Innovation Research ISI
analyzes the origins and impacts of innovations. We research the short-
and long-term developments of innovation processes and the impacts of
new technologies and services on society. On this basis, we are able to
provide our clients from industry, politics and science with
recommendations for action and perspectives for key decisions. Our
expertise is founded on our scientific competence as well as an
interdisciplinary and systemic research approach.
© 2017 Fraunhofer ISI