Service Providers of the Information Society - Decline in Demand is the Most Frequent Consequence of the Economic Crisis

The economic crisis reached the service providers of the information society in Germany at the beginning of the year 2009. By now about 88 percent of all businesses in this economic sector, which comprises the knowledge intensive service providers and the ICT-specialised service providers, report to be affected by the current economic crisis, the negative impact ranging from slightly to very strong. This is the result of a survey among the service providers of the information society which the Centre for European Economic Research (ZEW) Mannheim has conducted in cooperation with the credit reference agency Creditreform, Neuss, in September 2009 (details of the survey are provided at the end of this press release).

"The economic crisis hits businesses most badly by the decrease in demand," says Miruna Sarbu, researcher at ZEW. "The businesses name financial difficulties of their customers as the second most common result of the economic crisis. Still about half of the businesses affected by the crises report investment difficulties which can be attributed, among other things, to problems with the raising of capital," says Miruna Sarbu.

Businesses of the branch tax consultancy and accounting, however, differ from this ranking of the consequences of the economic crisis. In this branch, businesses report to be most affected by the financial difficulties of their customers. The businesses in this branch suffer less from a downturn in demand or investment difficulties.

The ICT-specialised service providers, including software businesses, IT services, ICT-specialized trade and telecommunication services as well as the knowledge intensive service providers, comprising businesses in the branches tax consultancy and accounting, management consultancy, architecture, technical consultancy and planning, research and development and advertising, make use of various strategies in order to cushion the consequences of the economic crisis. About 80 percent try to overcome the consequences of the crisis by establishing a more efficient workflow. To manage the crisis a majority of businesses also rely on strategies like the development and supply of new services, restructurings to reduce costs and the use of connections. On the other hand the businesses affected by the crises rarely revert to short-time work, downsizing or increased internationalisation to combat the consequences of the crisis.

The economy survey by the ZEW/Creditreform

About 900 businesses each participate in the quarterly survey. The ecomonic sector service providers of the information society consists of information and communication technology-(ICT) service providers (businesses of the branches software and IT-services, ICT specialized trade and telecommunication services) and knowledge intensive service providers (businesses of the branches tax consultancy and accounting, business consultancy, architectural offices, technical consultancy and planning, research and development and advertising). An overview of the ZEW/Creditreform business survey is provided on the ZEW project site. For further information in German language only, please consult our homepage at www.zew.de/dienstleister.

Comment on the projection

To ensure the representativity of the analyses, ZEW projects the answers of the participants of the survey onto the number of all businesses in the considered branch.

For further information please contact

Miruna Sarbu, Phone: 0621/1235-334, E-Mail: sarbu@zew.de