World's largest IT gathering hopes to spark growth

About six and a half thousand businesses from 69 countries gathered at the world's largest IT exhibition in Germany recently, hoping to reinvigorate the market.

The majority of companies who made the trip to CeBIT 2003 in Hannover had come to assess what investments IT users would be making.

Most of the businesses in attendance were large suppliers. There was a marginal showing of small to medium-sized enterprises.

Keynote speakers at the conference said they had hoped for more representation of small businesses and start-ups, with many blaming over-regulation for the decline in numbers over the last 12 months.

Large shifts in origins of IT companies

Opening the exhibition, Dr. Herbert Schmalstieg, Mayor of Hannover and Chairman of the Supervisory Board of Deutsche Messe, said while he was glad to see so many exhibitors, "it would be wrong to ignore the fact we are lagging behind last year's figures."

Dr Schmalstieg noted Chinese exhibitors had almost doubled to 114 compared to 62 in 2002.

About 40 per cent of the companies in attendance were non-German, he added.

"There are significantly more participating companies from Asia, but fewer exhibitors from the US, the UK and Germany, mainly due to a smaller turnout of small to medium-sized enterprises (SMEs) participating in group presentations this year," Dr Schmalstieg said.

Prominent themes at this year's CeBIT included broadband communications; mobile communications; wireless LANs; IT security; data storage software and e-Government.

The hardest year in IT yet

Dr Volker Jung, President of BITKOM – the German Association for Information Technology, Telecommunications and New Media, spoke of the pain the industry had experienced in recent months.

He said: "For most of us, the past twelve months have not worked out as we anticipated, and many of us would like to quickly forget what happened.

"At the start of 2002 we knew that things were going to be difficult, but we could not imagine just how difficult it was going to be. Last year saw the American ICT market stumble along to record a fall of 2.7 per cent, while the German market also slipped into the red, marking up a minus of two per cent. Neither the USA nor Germany had ever experienced this before. In the EU we had zero growth. Only Russia, Eastern Europe, China and some Asian countries experienced growth."

Dr Jung said where network operators were still enjoying high growth rates; hardware and software suppliers were experiencing a decline in turnover of over 10 per cent.

"Many people in our sector have had their dreams brutally interrupted," he continued.

"Having listened to hymns of praise and jubilation we are now subjected to mournful laments. We will need people who are prepared to take entrepreneurial risks and operate with total flexibility to move freely in highly volatile markets."

Fostering small businesses is critical to future success

Dr Jung said it was critical not to make a bad situation worse by constraining the growth of small IT companies with excessive red tape.

He explained the current market for both large and small businesses as "between two growth cycles."

"The first cycle lasted until the year 2000 and was dominated by the liberalisation of telecommunications, Internet and mobile telephones. Broadband applications will characterise the forthcoming growth cycle, which will focus on the convergence of information systems and communication systems," he said.

According to Dr Jung, key areas of European growth this year will be e-commerce - forecast to grow from €309 billion in 2002 to over one thousand billion euros in 2003 - and increased spending on modernising national health sectors' IT infrastructures.

One area he said his own country, Germany, had failed in was e-government, citing results from a recent global study that showed Germany lagging in 32nd place, behind Tunisia.

He added there was an opportunity for businesses to assist in the development of chip-card technology in the form of citizen ID cards.

"The digital citizen's card will come about – either it will be forced upon us, or we can be involved in its creation," he said.

Deutsche Messe, CeBIT 2003's organisers, said they were confident the impetus provided by the exhibition would make "a major contribution to economic recovery on an international scale."