“The new government must focus on investment and training,” said the union of digital professionals, arguing that the digital sector has shown resilience and growth during the crisis, which must be relaunched.
The semi-annual conference of Syntec Numérique has just published the 2019 assessment and the 2020 outlook for the digital sector in France. The professional organization presents an inventory of the sector and positions itself in relation to the post-Covid-19 situation, by drawing a perspective which covers, according to its expression, “the last act of the quinquennium”. In summary, for Syntec, digital is the “linchpin of recovery, [et] must irrigate all ministries and industries. Investments and training will be the hallmarks of the recovery ”.
Taking stock of past months, the professional organization believes that the sector has been affected, but has remained resilient thanks to the strength of demand. Like many other sectors, the Covid-19 crisis slowed the dynamism of the sector: in 2019, the latter posted a growth of 4.2%. After the crisis, it forecasts a 6.7% drop in turnover for the entire sector in 2020. The slowdown concerns the three main activities that Syntec Numérique represents: software publishers, digital services, and Technology Consulting (outsourced R&D) which is most affected due to the simultaneous impacts on aeronautics and the automotive industry.
The cloud, a lever for growth
As for the prospects for a rapid restart, they are quite good with slight signs of recovery, thanks to the restart of current projects and the resumption of commercial activity for 86% of companies. In this context, it is the SMACS (Social-Mobility-Analytics-Cloud) that are the engines of the market, with net growth estimated at 450 million euros in 2020, or 3.2% more than in 2019. The cloud is emerging as a lever for growth: for the companies questioned, the demand for purchases of services on the public cloud will increase by 8% following the crisis. In the digital market, 24% of companies plan to invest in the cloud to better exploit their data and 24% will migrate their applications for reasons of availability.
According to Syntec Numérique members, it is the development of new high value-added service offers (development of cloud offers, new cybersecurity offers, development of offers around artificial intelligence and machine learning, etc.) that will constitute the main lever for recovery in the sector in 2020. The development of cloud offers will intensify, reaching 23% of the sector’s market share in 2020, representing growth of 9.1% (19.4% in 2019).
SaaS stays on course: dynamic
Although they are affected by the crisis (-3.6% in 2020 against + 6.6% growth in 2019), software publishers are nonetheless optimistic: more than 8 out of 10 companies expect the recovery of their activity from the second half of this year and 40% of publishers expect their turnover to grow in 2020. The SaaS model remains particularly dynamic: 86% of companies expect either stability or market growth in 2020.
Consulting activities are suffering more than others from the crisis, with a decrease in orders which deteriorated in 83% of cases in the first half of 2020. Only 12% of Technology Consulting companies expect an increase in their turnover. in 2020, compared to 79% growth in 2019.
Overall, the average difference between the 2020 growth estimated before the crisis and that estimated after the crisis will be -11.6% for the least exposed players, and -23.4% for the most exposed players (aeronautics, automobile…).
Digital may be a driver of recovery
To avoid the flight of talent abroad and retain skills in France during this period, the emphasis must be on training, says Syntec Numérique. It proposes to the government to apply a new device, the FMDCI (Training for the Maintenance and Development of Innovation Skills), which will enrich the skills of the 50,000 engineers and senior technicians of R&D outsourced as part of carrying out new innovation projects.
According to Godefroy de Bentzmann, president of Syntec Numérique, “digital has demonstrated its full potential for resilience and growth ”. He believes that the government must take into account that digital is not a business like any other, “it’s a linchpin that accelerates innovation in all industries. Digital must be integrated into all sectoral recovery plans to create jobs and gain competitiveness“, He explains, before adding that”we must remove the regulatory obstacles to the dematerialization of acts and procedures, and perpetuate the good practices put in place during the crisis. We must also invest massively in digital technologies and skills by targeting the talents and technologies of the future.“