For years, the software and IT service industry has been a strong economic factor in Germany, with an above-average increase in employment even during the economic crisis. The Software-Cluster is a key driver of growth for Germany as a business location, particularly in the south-western region of Germany.
11,000 software companies are located in Germany’s southwestern region, which together generate an annual turnover of more than 25 billion euros. One out of every five employees in the German software and IT service industry works in or around Darmstadt, Kaiserslautern, Karlsruhe, Saarbrücken or Walldorf – the centres of software development. According to the latest ranking of the software and IT industry, eleven of the 25 headquarters for the largest German software companies are located in the southwest of Germany. In addition to companies, the cluster inculde excellent research facilities which guarantee sustainable growth and quality.
The Software-Cluster with its four corporate networks in the sub-regions (North Baden, Rhine-Main-Neckar, Rhine-Hessen-Palatinate and Saarland) includes universities, universities of applied sciences, Max Planck Institutes, Fraunhofer Institutes and, among others, two locations of the German Research Center for Artificial Intelligence (DFKI) with several thousand computer scientists. These research and training institutions enjoy a high level of recognition at an international level – a fact which is corroborated, for example, by the top ranking for IT in the Excellence Initiative of the German Research Foundation (clusters of excellence in Saarbrücken, graduate schools as part of the Excellence Initiative in Darmstadt and Saarbrücken, University of Excellence Karlsruhe). The excellence shown in the field of information science has a long tradition within the universities mentioned: they were among the founders and thus pioneers of the disciplines of information science and business informatics at German universities. Over time, renowned research facilities were established around the universities. All of the three competence centres for IT security that are subsidised by the federal ministry are part of the Software-Cluster.
s a result, the business location of southwest Germany is an area offering a significant amount of knowledge where software research, software development and software sales go hand in hand and build on one another. The strong academic world with its world-class researchers and the critical mass of software companies of all sizes have created a software ecosystem of global importance in the cluster region, which also has repercussions at an international level. The performance of the Software-Cluster region is continually being expanded through start-ups and settlements of scientific and economic organisations.
Innovations are driven forward more strongly within a cluster structure. Fast communication, an intensive exchange of ideas and the transfer of knowledge facilitate progress. Trends can be embraced and implemented faster in cooperation with strong partners. In the Software-Cluster, partners from four different federal states (Hessen, Baden-Württemberg, Rhineland-Palatinate and Saarland) work together – which goes to show that corporate networks are not restricted by political borders. Important IT and software clusters already exist in their own right within each of these four individual sub-regions, and some of these clusters have alternating focal points. However, there is one common element within the overall cluster region: the expertise in the corporate software segment. More than 90 per cent of the turnover is generated with corporate software and business-to-business solutions. The innovations in the corporate software segment have resulted in the region holding a 30-per-cent share in the world market in this segment. The cluster region is quite rightly referred to as the cradle of corporate software, as it contains a large number of innovative companies as well as leading computer science faculties and research institutions, which – according to the EU study “Truffle 100 European Clusters” of the year 2010 – makes it the Silicon Valley of Europe.
This is a huge success for the region. Still, the quest for continued growth is clearly noticeable. There is an increasing number of IT companies who deliberately make a decision to set up their business or subsidiary in the Software-Cluster. Along with them come additional innovation stimuli and new possibilities for cooperation. The standing objective has to be to strengthen the competitiveness in order to also achieve top rankings in future thereby strengthening Germany as a business location. As part of the new High-Tech Strategy, the German federal government has defined “Industry 4.0” as a key research topic. And this is exactly where the Software-Cluster’s strong points are. The region supports the “Industry 4.0” vision through corporate software by offering innovative solutions, for example, for process optimisation, resource efficiency or monitoring – solutions which, in turn, are used in sectors such as the manufacturing industry, traffic and storage as well as agriculture and forestry, thereby being able to stimulate other economic sectors in Germany.
The author obtained a doctorate in the field of computer science from the University of Kaiserslautern. He has been Head of Research at Software AG for a few years and is currently the spokesman of the Software-Cluster. Furthermore, he is a member of the board of NESSI (Networked European Software and Services Initiative), speaker of the Software-Campus and chairman of the BITKOM working group “Industry 4.0 – Market and Strategy”. He works as an expert and consultant for the European Commission and several German federal ministries.