Mar 8, 2006, 19:00 GMT
Hanover - Chancellor Angela Merkel opened the world's biggest computer fair in Hanover Wednesday by announcing plans to boost Germany's high-tech business and hold a special IT summit.
A worker sets up an ad for mobile phones few days prior to the beginning of the world's largest computer trade fair CeBIT at the trade fair premises in Hanover, Germany, Sunday 05 March 2006. EPA/Rainer Jensen
Germany has always considered itself a 'future workshop', Merkel said opening the Cebit trade fair, adding that innovation helped to create new products which then led to new jobs.
As the IT sector is an important engine of growth in Germany, Merkel said that the aim of her proposed summit would be to help underpin employment in the country.
Indeed, data released to coincide with the launch of the six-day CeBit fair and drawn up by Germany's information technology and telecommunications industry association (BITKOM) showed the nation's IT sector managing to haul itself out of a series of tough business years.
BITKOM expects sales to grow by 2.4 per cent this year after a similar expansion rate in 2005. But this came after BITKOM had projected a growth rate for last year of 3.5 per cent.
The IT growth rate 'aids the whole the economy', said BITKOM president Willi Berchtold, who warned that labour shortages in the IT sector could hit Germany's image as a place to invest.
That said, however, signs are continuing to emerge that German industry is again investing in both hard and software.
'The readiness to invest is on the rise again not only in cost saving programs but also in the development of new business fields,' said Microsoft Germany chief Juergen Gallmann.
CeBit officially opens its doors to the public Thursday with about 6,260 companies attending this year to show their computer gadgetry and equipment.
More than half the exhibitors are from outside Germany with a large number of the exhibited products underscoring the speed with which the digital revolution and mobility in IT services are changing our lives. Last year, about 480,000 people turned up in Hanover for Cebit.
Merkel's planned IT summit is to be held later this year and the Chancellor said Wednesday her cabinet had decided to draw up a new government program to boost the IT sector in the coming months.
In particular, this would be aimed at further developing the nation's digital infrastructure.
A new Council for Innovation and Growth, which is to be chaired by former Siemens chief Heinrich von Pierer, would begin work in the coming weeks, she added.
Part of the council's job will be to boost the IT business side of Germany's key small-to-medium-size industrial sector.
However, one key problem facing the industry in Germany has been the declining number of students enrolling in IT courses as a result raising the risk of labour shortages.
Adding to the problems have been the number of IT firms expanding their operations in low-cost highly skilled nations, such as in Central and Eastern Europe.
Combined with a round of lay offs in the IT sector, including 32,000 job cuts by telephone giant Deutsche Telekom AG, the German industry's workforce is expected to stagnate this year.
At the end of 2005, the number of people employed in the IT sector stood at 750,000.
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