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Germany

Invest in Production, German IT Firms Told

The computer and technology trade fair, Systems, has opened its doors in Munich with a warning to German IT firms: Secure more production in Germany, or risk falling further behind economically.

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IT experts at Systems hope firms in Germany will be inspired to invest

Given the decreasing numbers of visitors at computer fairs worldwide, Systems Munich, the trade fair for IT, media and communications, can be pleased: With 1,300 exhibitors this year, it's still going strong.

Systems director Klaus Dittrich said he is convinced that's because the fair has focused on the distinct goal of serving the "business to business" market.

"We see ourselves as the conference room of the technology sector, not the shop window," Dittrich told Deutsche Welle.

But on the fair's opening day, the head of Germany's national association of IT, telecommunications and new media companies (BITKOM) told industry representatives that they would have to widen their focus beyond innovation if the technology sector is to grow.

No production, no profits

Willi Berchtold Präsident BITKOM Porträtfoto

BITKOM President Willi Berchtold .

"Something has gone wrong if you consider that important product ideas, such as flat screen technologies or mp3 encoding technologies, have come out of Germany, but that the products are being produced in other regions such as Asia," said BITKOM President Willi Berchtold (photo). "We had the ideas, but other countries are making the profits."

Berchtold said German technology firms suffer from a blind spot -- they invest a lot of money in research and development, but then fail to invest in production at the same level. And while the same phenomenon has been observed in other economic sectors in the past, it's hit the IT sector particularly hard.

Ambitious goals

The IT industry in Germany now has some catching up to do. Their goal, according to Berchtold, should be to turn Germany from an import country into a country that also exports. Above all, the industry has to not only invent the technology of the next five to fifteen years, it has to be in a position to produce new products, so that Germany can compete with the world's leading IT nations.

Berchtold also stressed that German IT companies are in a position to create jobs and contribute to the country's economic recovery if they set themselves high enough goals internally.

"Our particular industry should really be focused on growing twice as much as industry generally," he said. "If Germany is looking at a growth rate of two percent, then the IT industry should be aiming at growth of four to five percent."

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