ICT-Sector in the Greater Munich Area

Tasks

The study is being conducted as part of a commission from the Chamber of Industry and Commerce for Munich and Upper Bavaria to provide objective, science-based economic advisory work. Details

Entitled “ICT in the Greater Munich Area, 2019,” the study examines the structure of the ICT industry in the greater Munich area, as well as the industry’s development over the past five years using three indicators: employees subject to social insurance, number of companies, and revenue. The study also looks at notable developments and differences between various branches of the industry and between the city and its suburbs, and places these in the context of the greater Munich economy as a whole. Furthermore, it evaluates ICT in the greater Munich area compared to other locations in Germany and abroad, and focuses especially on start-up activity.

Methodology

Data Analysis

Data Sources

ifo Business Climate; input-output tables (German Federal Statistical Office); statistical business register (in brief: business register); German Federal Employment Agency statistics; revenue tax statistics; IHK database; business registration statistics; the Federal Employment Agency’s Establishment History Panel (BHP)

Results

The ICT sector has become a central building block in the fabric of the economy. Its interweaving with almost all other sectors can be seen in Munich in particular. The term “ICT sector” includes ICT production, ICT wholesale, and ICT services.

Economic development of the ICT sector in the greater Munich area

• Total number of businesses increased 11 percent over the 2012–2017 period. Of all businesses in the Munich region, 6 percent are active in ICT.
   
• The sector had 118,616 employees subject to social insurance (SI) in 2018 (+36 percent since 2012), representing 8 percent of all SI employees in the greater Munich area. Of ICT employees, 85 percent work in services, the majority of them in programming and IT consulting. The share of female employees in the ICT sector is smaller than that of male employees.
   
• Sector sales in the city of Munich grew 38 percent from 2012 to 2017. In the city, the ICT sector generates more than 7 percent of the total sales of all industries. IT services: sales in Munich are nearly twice as high as in the surrounding area.

Start-up activity in the ICT sector in the greater Munich area

• Of all the new companies in Germany, 5 percent are founded in Munich. Of all the new companies in the ICT sector, 9 percent are founded in Munich.  
   
• Munich start-ups in the ICT sector have on average more employees than ICT start-ups in Germany and more than start-ups in all other industries.
   
• The area with the most start-up activity is ICT services, and within that programming: 43 percent of all start-ups in greater Munich in 2017 were in this sector, of which roughly half were small businesses.

Comparison with other highly innovative regions in Germany

• Greater Munich’s ICT sector also fared well in comparison to other highly innovative regions in Germany: more businesses, more employees, significantly higher sales, as well as start-ups with an above-average number of employees.