Kick-off Meeting“New Employment, New E-quality -

Promoting Industrial Relations and Social Dialogue in the IT Sector” 20 March 2004

Thessaloniki

Definition and Structure of the Greek IT Sector

SEPVE-Association of Information Technology Companies of Northern Greece

SEPVE’s role in the IT sector

SEPVE was established in April of 1994 The Association numbers more than 210

members It is the leading association in the Information

Technology sector in the region and the official representative body of Information Technology companies that are located in the geographical regions of Northern Greece

It plays an active role in the implementation of the goals of the Information Society

To keep its current and also the prospective members informed about the recent changes in the information society business world.

To contribute to the development of Information Technology in the region of Northern Greece

To promote the improvement of the Information Technology companies

To engage in any activity that will upgrade the role of Information Technology, will provide innovative technological solutions, and will expand the positive effects of the Information Society.

The Objectives of SEPVE 1/2

The Objectives of SEPVE 2/2

To co-ordinate and submit specific business plans and proposals

To organize co-operations with the various government authorities concerning the good development of members’ growth

To continuously develop the managerial and technical skills of its members by organizing training seminars, workshops and forums

To promote collaborations with other Balkan countries taking advantage of the geographical position of Northern Greece which is the crossroad between Mediterranean and Middle East and the Balkan countries.

IT Sector DescriptionDefinition: IT = ICT

The information and communication technology sector encompasses many very different activities and companies

For manufacturing industries, for inclusion in the ICT sector, the products of an industry must be intended to fulfil the function of information processing and communication, including transmission and display, and they must use electronic processing to detect, measure and/or record physical phenomena or to control a physical process

For service industries, the products of an industry must be intended to enable the function of information processing and communication by electronic means

(Definition agreed by OECD in 1998)

Company activities in the Greek IT

sector Software Hardware System Integration & IT Services Internet Business Solutions – e-Commerce Web Applications & On Line Databases Telecommunications Multimedia Application Education IT Consulting

Sector Profile

Major Basic activities Software (Operational applications and

Internet applications): 32% IT Services: 31% Distribution of office machines and PCs:

16% Trading telecommunication products and

equipment: 8%

Source: IOBE - Ίδρυμα Οικονομικών και Βιομηχανικών Ερευνών

Size of the ICT Sector in Greece

<11 persons : 9% 11-50 : 58% 51-250 : 24% >250 : 9%

<1 million € : 19,4% 1-10 : 57,9% 10-100 : 18,1% >100 : 4,6%

Employees Turn Over

Majority of IT companies are SMEs. Major global IT companies have offices or regional headquarters in Greece: Microsoft, HP, Oracle, SAP, Motorola, Siemens, and IBM

ICT market size

6% increase for 2003 – MEUR 2228 Forecasted 2,5% increase for 2004 Mostly damaged were software and IT services Steadily good performance of PC systems sales Bigger market shares are shifting to

multinationals

Source: Strategic International/ Kataras (January 2004)

The Greek IT market, 1999 – 2003 (Values in M€)

1252

1702

1873

21012228

31,00%

10,10%12,10%

6%

36%

0

500

1000

1500

2000

2500

1999 2000 2001 2002 2003

Value (M.Euro)

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

Growth Rate (%)

Size Increase

The IT market in Greece and W. Europe, 2002 – 2005 (%

Growth Rates)

-1,5%-0,7%

4,4%

12,1%

1,2%2,2%

2,5%6,0%

-4,00%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

2002 2003 2004 2005

Growth Rate

W.Europe Greece

Reasons for the slowdown

Uneven economic progress: Only a small number of big companies take advantage of 3rd CSF and Olympic Games projects

Lack of modernisation Over-loaning of SMEs Etc.

Greek government has put a strong emphasis on the development of the IS

Implementation of OPIS (Operational Programme for the Information Society)is critical for the status of ICT market

Access to considerable EU technology, research and development funds

Good performance of R&D sector Strong scientific support from international universities and

research institutes Country lacks spin-off companies from research PC and Internet usage grow Usage of new technology still on introductory level Deregulation of telecom market

Characteristics of the Greek IT market

Basic sectors of IS development Education Culture/ Digital content (Digitalisation of cultural and historic assets) E-government Agriculture Defense services relating to civilians (meteorology, drafting, military

hospitals) E-justice E-Health Intelligent transport SMEs and digital economy Research in ICT E-skills Eurozone infrastructure and services

Employment in IT sector In 2001 employment in the ICT sector constituted 1.1%

of total workforce Well –trained highly skilled IT specialists Well-trained engineers with postgraduate studies studies

in engineering (and management and economics), foreign languages and computer applications

Many well-respected scholars and scientists have shown strong interest in advanced ICT research (about 1,500 scientists staff the four main IT R&D centres in Greece)

Specialisation of work force Specialisations offered by educational institutions:

IT applications specialist; IT applications with multimedia specialist; Medical IT applications technician; Computer, communication and network technician; IT, networks & office automation application technician; Systems administration and intranet-internet service technician; Computer Systems technician; Computer networks technician; Internet technology technician Telematics technician (communciations)

There is no standardised job profile description in Greece

Differences in Europe

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Greece

Spain

Italy

France

Portugal

Austria

Germany

Belgium

Sweden

Ireland

Finland

UK

Netherlands

Denmark

Total

Teleworkers as % of total workforce

2001

Lack of ICT professionals

in the EU

2003: 1.300.000 Free job opportunities

2004: 1.600.000 Free job opportunities

in Greece:

Information Society - until 2006

40.000 Free job opportunities

In the IT sector – Government & Private

Trends in IT EmploymentThe large majority of enterprises of the sector forecast a smaller or bigger increase of employment within 2004 for the following reasons:

Supply: Increasing investments in new sectors, new activities, Maturation, consolidation, better technical know-how Progressive access to new geographic markets

Demand: Public sector: concretisation of big works of the IS Private sector: Important investments for software changes, import of Information systems, Internet services, etc)

Only 1/5 of enterprises forecast a decrease (although more in auxiliary personnel): Stagnation of demand, critical economic situation of SMEs

Ίδρυμα Οικονομικών και Βιομηχανικών Ερευνών

Computer Training and Work

ICT usage in Greece General population Very small and SMEs (2002)

2001 2002 Growth

Rate1

Πολύ μικρές (1-10)

SΜΕ(11-250)

European Average

SΜΕ2

(11-250)Computer users 20% 28,9% 45% 34% 92% 94%

Internet users 10,1% 19,3%91% (EU

AVG 15,6%)14% 74% 83%

Email users 6,2% 12,5% 100% 4% 39% 52%Company presence in the Internet

NA NA NA 16% 67% 69%

Mobile users (GP Only)

49,8% 63,6%31% (EU

AVG 5,6%)divide Convergence

ΠηγήΠηγή: : Εθνική Έρευνα για τη χρήση Νέων Τεχνολογιών στο Γενικό Πληθυσμό για το 2001& 2002, Εθνική Έρευνα για τη χρήση Νέων Τεχνολογιών στο Γενικό Πληθυσμό για το 2001& 2002, GRNETGRNET1:Ευρωπαϊκός Μ.Ο πηγή1:Ευρωπαϊκός Μ.Ο πηγή EITO 2003 EITO 20032:Πηγή2:Πηγή: e: e Business Watch 2003Business Watch 2003

Fast adaptation to Fast adaptation to computer and Internet by computer and Internet by new generationnew generation

Research and development in the IT sector

40% of IT companies have R&D expenses higher than 5% of annual turnover

Companies with 26-100 peronnel have higher expenses

40% of the companies participated in subsidized research co-operations, while 1/5 of the sector collaborated on R&D issues with private funds: an overall 47% has participated in R&D collaborations

For 2003-2004 60% declare that they will carry out R&D collaborations with other enterprises and institutions of Higher Education

More than 1/3 claim to have a big or very big exploitation of research results

Source: IOBE, 2004

Trends and Perspectives of the IT sector

37% of IT companies feel optimistic 60% feel reserved, with companies <10 people appearing

more optimisticReasons for optimism: Increase of until today low use of ICT and therefore bigger

spreading of ICT to the population and companies (SMEs) Acceleration of IS works, creation of a substantial mass of

users in the business and general public will motivate the until today stagnant/negative market

Cost reduction of infrastructure/ equipment and usage of telecommunication services

Higher standardisation of solutions/products and therefore increase of turnover with parallel cost reduction

Source: IOBE, 2004

Sources for the development of the sector

1. EU Enlargement

2. Spreading of ICT to other developing sectors of the economy, such as tourism

3. Good level of higher and highest technical education

4. Quality of personnel in the labour market for the companies in the sector

5. Improvement of the overall economic climate

6. Finalisation of regulatory framework (mainly telecommunications)

7. Continuation of development of Information Society

8. Customisation of existing software programmes

9. Opening up towards the markets

Ίδρυμα Οικονομικών και Βιομηχανικών Ερευνών

Obstacles for the development of the sector

1. Software piracy 2. Limited size of national market 3. Level of user attitude to the new technologies4. Organisational level of user companies 5. Due to the lack of outside funds the companies’ own

funding is limited6. Approaching foreign markets is not easy, esp. for SMEs7. Still poor infrastructure that limits development 8. The big multinationals are profiting from the

development coming from the Olympic Games

Source: IOBE (March 2004)

IT Companies’ Strategic goals

1. Increase of market share in the existing IT market in the existing markets 2. Sales increase through development of new IT technologies3. Sales increase through introduction of existing IT in new sectors 4. Introduction of existing IT in new geographic markets5. Emphasis on added value of the offered software programmes, adjusted to

the client. 6. Focusing on specified client groups (market niches)7. Emphasis on the organisational flexibility of the company8. Emphasis on cost cutting by reducing staff9. Realisation of mergers and acquisitions

Source: IOBE study 2004