Continuing Rise In IT outsourcing - National Providers Benefit Most

German companies extensively use the option of outsourcing information technology services to external providers (IT outsourcing). In 2009, the share of outsourcing companies was 78 percent - a tremendous increase of 14 percent compared to 2006. This is the finding of a recent representative survey among manufacturing companies with at least five employees in certain service branches, conducted by the Centre for European Economic Research (ZEW). A total of 4,400 companies were surveyed.

The more employees a company has, the more likely it is to outsource IT services, such as installation of hardware and software or system support. Almost every company in the largest size group, measured in number of employees, already outsources all or parts of its IT service – 95 percent of the surveyed companies in manufacturing and 92 percent in the services sector. However, firms in the smallest size group are quickly closing the gap in both manufacturing and the services sector. The share of companies in these size groups outsourcing IT services rose by 11 percent and 16 percent, respectively, after 2006.Thus, the share was 75 percent in both size groups in 2009. "This increasing demand of small companies for IT services indicates that there now are products tailored to their needs," says Jörg Ohnemus, researcher in the research group Information and Communication Technologies at ZEW.

German firms primarily outsource IT services to providers with seat in Germany. Only 3.4 percent of the companies received IT services from foreign providers in 2009. Effects of size become visible in this area as well. While small companies rarely use foreign services providers, manufacturing companies rely on them more often. After all, almost one in five companies practices offshoring.

For further information please contact

Dr. Jörg Ohnemus, Phone: +49 (0)621/1235-354, E-mail: ohnemus@zew.de