Germany’s IT Industry: Could it Withstand the Current Crises?

While some niches are facing an acute crisis due to raw material shortages, energy crises and supply delays, the information technology industry has proven relatively resilient in the face of the crisis. This is reflected in the ever-increasing market capacity and shortage of skilled workers. It can be assumed that the most important areas of information technology – IT services, hardware and software – will continue to gain in importance in the future. The driving force is increasing digitization with all its consequences.

Market capacity of IT sectors: Here, too, there is an immense shortage of skilled workers

Germany’s IT industries are relatively balanced in terms of market size – as measured by analyses from 2005 with forecasts up to 2023. The frontrunner is the IT services industry with a market size of 41.4 billion euros in 2021. These figures alone show the enormous importance of the IT industry for Germany. It permeates all sectors of the economy, which is also reflected in the labor market. By the end of 2022 alone, the number of employees in the IT industry was over 1 million. However, demand is significantly higher. There is a serious shortage of skilled workers. As a rule, it takes more than 7.1 months to fill an IT position. IT security experts, data scientists and software developers are the most in demand. The skills gap is growing more and more and is additionally fueled by new government measures and legal regulations to regulate online business. The online gambling industry is a case in point.

Internet regulation as a sales driver

The Internet is growing by the day. With it, technical achievements and capabilities have increased, as well as the number of Internet users worldwide. All these developments are not without positive and negative consequences. In many cases, the state finds itself forced to create regulatory bodies. For example, it took until April 2022 for the European Union to agree on digital laws against hate. In addition, the European Union and the German state are dealing with illegal online gambling. The goal is to better protect minors and players from gambling manipulation. An important instrument for this is the so-called IP ban or network blocking. Blocking IP addresses in gambling increases staff requirements.

The preferred method of legally enforcing the provisions of the new State Gambling Treaty (July 1, 2021) is being discussed in terms of blocking industrial property rights.  Accordingly, gambling service providers may hold a German license. However, the position of EU suppliers in this regulation is not yet clear. The joint gambling supervision of the federal states wants to remove suppliers of illegal casinos from the market, which requires sophisticated technical measures such as IP blocking. To achieve them, increasingly powerful IT service providers are needed who are able to fulfill this concern conscientiously and comprehensively.