Geography Reference
In-Depth Information
software i rms. The institutional regulations cause disadvantages for German i rms in
the rapidly changing markets of high-technology and hamper the necessary fast market
entry and exit.
Education system
The closely knit connections between industry and the university
system and the interconnected further education and occupational training systems are
considered to be a major strength of the German innovation system (Naschold, 1997;
Soskice, 1999; Streeck, 1997). Overlapping, interrelated qualii cation structures of skilled
workers, technicians and engineers have been built up by the dual training system, which
ensures the transfer of technology-oriented knowledge and technical capabilities to the
production system. For the software industry, such interlocking structures are missing
(Broy et al., 2006).
Furthermore, it is emphasized that the failure of the standardized education system to
adjust to the dynamic changes and requirements of the software branch was a factor that
slowed the growth of this industry. The complex voting processes within the corporate
structures meant that it took a long time for changes in qualii cation requirements to be
carried over into new job descriptions by way of new education regulations. The orienta-
tion of the education system towards clearly dei ned areas of activity and job descrip-
tions means that there are no interdisciplinary application-oriented training courses and,
subsequently, that there is a shortage of qualii ed employees (BITKOM, 2007; BMBF,
2007; Friedewald et al., 2001).
In sum, it can be stated for Germany that the national institutional settings and the co-
evolved specii c competencies in certain technology i elds have resulted in specialization
of the production structure in the core industrial sectors that constitutes a disadvantage
for the genesis of strong, growing, new high-tech industries like the software industry.
Path plasticity: the customized business software in Germany
Despite the unfavourable institutional environment caused by the institutional arrange-
ments of the dominant path of the German innovation system for the software industry,
a sub-sector -
customized business software
- has been able to position itself internation-
ally on the world market.
6
The growth dynamic of the application software in Germany
with a rate of 13.6 per cent outperformed that of the European Union in the years 2003
to 2006 although there is a lack of system software (EITO, 2006, pp. 199-207) (Figure
19.1).
In 2006 the broader sector of computer and related services (NACE 72) consisted of
65,440 i rms, over half of the i rms focusing on software development. In absolute terms,
with 402,311 employees the computer and related services industry has nearly as many
employees as the chemical industry - one of Germany's core industrial branches. Around
a third work in the software industry, which is highly concentrated in Germany with only
a few large international companies and a large number of small and very small, mostly
single, i rms. The structural survey of the National Statistical Oi ce for 2005 shows that
87 per cent of software companies employ up to nine employees. Only around 6 per cent
of the i rms have more than 20 employees, but these are producing 80 per cent of the
turnover of the whole branch. Since the mid-1990s the software branch has been charac-
terized by a dynamic continuous growth in software companies. The number increased
from 5700 i rms in 1994 to 19,000 in 1999 and to 35,700 in 2006 (see Figure 19.1 and
