Macroeconomic measurement of the German project economy

Transcription

1 Macroeconomic measurement of the German project economy Meet the Experts - International Project Management Conference Lisboa, March 27, 2017 Prof. Dr. Yvonne Schoper, University of Applied Sciences Berlin

2 Agenda 1 Background, objective and methodology 2 Results 3 Summary, restrictions and outlook 1

3 Background Popular conventional wisdom tells us that the prevalence of projects is on the increase and everyone can observe that the society that surrounds us is already profectified, at least in a partial sense. (Lundin/Söderholm, 1998: 13) [ ] projects have become a common form of work organization in all sectors of the economy during the last decades. (Packendorff/Lindgren, 2014: 7) We develop our argument in the context of the increasing reliance on projects in organizations [ ]. (Hodgson/Cicmil, 2007: 432) Therefore a phase of "projectification" is now under way to adapt these permanent processes to the new context. (Midler, 1995: 363) 2

4 Objective of the study Hypothesis: the projecification of the economy is steadily increasing. However the extent of the projectification of German companies in comparison to the regular line-work has never been systematically examined. The objective of this study is to measure the extent of the projectification of the overal German economy holistically, both for all industrial branches and forms of projects to be able to make a statement for the current and future development of the project economy. 3

5 Research process: two research phases Desk Research Concept development Qualitative pre-study Quantitative large scale survey Data analysis Reporting Exploration Large scale survey Mrch Apr May Jun Jul Sep Nov Jan Mrch May Oct

6 Variants of macroconomic measurement: output vs. input oriented methodology Input factors Value creation process Output factors Ressources I monetary I people I material Quantity I Amount I Turnover Quality I Product and service quality I Stakeholder satisfaction 5

7 Methodological challenge Variance of projects leads to a variance of project results. Monetary values (= project results) are not captured in the organisations and/or cannot be allocated. Even project-oriented companies do not show the project-related expenditures and returns neither systematically nor complete in their cost calculation sheets. 6

8 Concept for measurement of the projectification Entities (companies, organisations) Economic sectors (Classification follows WZ 2008 code) Macroeconomic total account (DESTATIS) Measurement of the projectification in individual companies Determination of average value per economic sector Calculation of the total value based on the data of the Federal Statistical Office 7

9 Selection process: layered random sample Economic sector Size in employees up to 500 over 500 overall Production industry Finance and insurance services Public admin / Education / Health Other service providers Trade, traffic, hospitality industry Information and Communication Overall

10 Agenda 1 Background, objective, methodology 2 Results 3 Summary 9

11 Internal projects represent the major project type with a share of 84% Internal projects External Projects [ Statements in % ] Organisation/ HR projects IT Projects R&D/new product development projects Marketing/ Sales projects Infrastructure Projects Customer Projects Production industry Finance and insurance services Public admin / Education / Health Other service providers Trade, traffic, hospitality industry Information and Communication Overall % 16 % So far the focal point of PM researcher was on external projects which represent the minority of projects 10

12 The projects have a comparatively large extent Average amount of employees in projects Average budget of projects Average duration of projects Average workload (people months) of projects Production industry 10,3 2,7 10,5 107,5 Finance and insurance services 9,9 0,7 9,2 90,5 Public admin / Education / Health 6,3 0,6 10,9 68,7 Other service providers 6,8 0,4 7,0 47,8 Trade, traffic, hospitality industry 12,1 1,7 8,1 98,0 Information and Communication 9,5 1,1 9,0 85,2 Overall 9,2 1,3 9,3 84,7 [ Mean values] [ in Mio. ; mean values] [ in months; mean values ] [ Person months; mean values] In average the projects consisted of 9,2 employees for a duration of 9 months, in other words 85 person months per project. The average project budget was 1,3 Mio. Euro. The size of projects in the production industry is the largest because of the higher material input, the size of projects in the other service providers is the smallest. 11

13 The share of the projectification in Germany is 34,7 % Share of project work on the overall working time in ,9 23,0 17,8 23,0 42,0 37,7 34,7 46,1 Share of turnover by order projects (external projects) in ,6 6,9 10,8 29,9 32,1 27,4 Prod. industry Finance & Insurance providers Public admin/ Education/ Health Other Service providers Trade/ Traffic/ Hospitality Information & Communication Overall* n = 100 n = 70 n = 100 n = 70 n = 90 n = 70 n = 500

14 Share of working time in projects The projectification will further increase by 2.9% annually 29,3 CAGR +4,3 % CAGR +3,5% 34,7 CAGR + 2,9 % 41,3 The amount of projectification grew from 2009 to 2013 by 4,3% every year. The companies interviewed forecast for the next years a further increase of projectification Data in % CAGR = Compound annual growth rate (= annual growth rate) 2019 (Forecast) However the growth rate will be with 2,9% annually smaller than in the previous years (4,3 %). 13

15 Branche specific differences Economic sectors Share on GDP Share of working time by projects F 2009 to 2013 Increase 2013 to 2019 The highest share of projectification has the construction industry (80 %) and Corporate service providers (60 %). Producing industry with construction 26,1 35,7 41,9 47,3 17,2 12,9 Public Admin, Education, Health 18,1 11,6 17,8 21,4 54,3 19,9 Trade, traffic, hospitality 15,6 29,8 42,0 58,6 41,2 39,6 Real estate* 11,1 2,0 2,0 2,0 0,0 0,0 Corporate service providers* 10,7 60,0 60,0 60,0 0,0 0,0 The lowest share of projectification has agriculture, forest and fishing industry (4 %) and the real estate business (2 %). Construction industry* 4,6 80,0 80,0 80,0 0,0 0,0 Other service providers 4,1 16,6 23,0 28,7 38,6 24,6 Finance and Insurance providers 4,1 17,9 23,0 26,7 28,5 15,8 Information & Communication 4,7 30,8 37,7 45,8 22,4 21,5 Agriculture, Forest, Fishing* 0,9 4,0 4,0 4,0 0,0 0,0 Germany Overall 100,0 29,3 34,7 41,3 18,4 19,0 [ * Estimations ] Date in %; The overall values were weighted corresponding to the share of the economic sector on the gross domestic product; F = Forecast Even supposed project distant branches as Public Administration shows a shore of nearly 20 %. The Public Sector shows the highest increase in projectification in the last years (54,3 %). 14

16 Expansion of the study in Norway and Iceland in 2016: Country-specific comparison of projectification NACE Code Share of project work 2013 Share on GVA 2013* Share of project work 2014 Share on GVA 2014** Share of project work 2014 Share on GVA 2014** A Agriculture, forestry and fishing 4.0 % 0.9 % 28.6 % 1.7 % 4.0 % 7.0 % B-E Manufacturing industry (excluding construction) 41.9 % 26.1 % 47.2 % 32.6 % 3.4% 8.9 % of which manufacturing % 8.8 % - oil and gas activity % 23.9 % - F Construction 80.0 % 4.6 % % 6.3 % G-I Retail / transport / hospitality / tourism 42.0 % 15.6 % 13.4 % 13.9 % 18.2% 20.3 % J Information and communication 37.7 % 4.7 % 48.0 % 3.8 % 47.8% 5.3 % K Financial services & insurance 23.0 % 4.1 % 21.4 % 5.1 % 34.2% 8.8 % L Real estate 2.0 % 11.1 % % 11.1 % M-N Corporate service providers 60.0 % 10.7 % % 5.3 % O-Q Public sector, education, health 17.8 % 18.1 % 14.2 % 22.0 % 33.3% 22.1 % S Other service providers 23.0 % 4.1 % % 42.7% 4.9 % S + F + L + M-N Sector Other service providers + construction +real estate + corporate service providers * Source: Statistisches Bundesamt ** Source: Eurostat, Statistics Norway *** Total value weighted by the proportion of ecomonic sectors to gross value added (GVA) Values printed in italics are estimated values Germany Norway Iceland % 20.9 % - Total *** 34.7 % % 32,6% % 27.7 % %

17 Agenda 1 Background, objectives, methodoly 2 Results 3 Summary, restrictions and forecast 16

18 Summary The extent of projectification in Germany was 34,7% in 2013 measured in the overall working time. The extent of projectification in Norway was 32,6% in The extent of projectification in Iceland was 27,7% in Assumption: this corresponds to a gross domestic product in Germany of 877 bln. that was created by the organisational form of projects. The share of projectification increased from 2009 to 2013 by 18,4%. For 2019 a further increase to 41,3% is forecasted however with a slower growth rate. 17

19 Restrictions in the German study Only 6 of 10 industrial sectors were measured in the study. Limitation to 500 cases, heterogeneous economic sectors (e.g. production industry) could not be further analysed. Availability and exactness of the data: Project-related activities are not completly and systematically captured and displayed in the cost accounting systems. Consequently the share of projectification on the GDP could not be measured directly but by input-oriented (share of working time in projects) and output-oriented (share of turnover created by projects) indicators. The data is based on the subjective evaluation of the experts interviewed in the companies. 18

20 Further research areas Inclusion of all economic sectors in the quantitative measurement. Breakdown of the heterogeneous economic sectors in specific branches. This requires an enlargement of the sample size. Periodic repetition of the measurement to analyse further developments. Carry out the methodology in more countries, also in emerging and developing countries to learn more about the impact of projectification on macro-economic success 19

21 Publications Research report Wald, A./Schneider, C./Spanuth, T./Schoper, Y. (2015) Makroökonomische Vermessung der Projekttätigkeit in Deutschland. Nürnberg. Book chapter Wald, A./Schneider, C./Spanuth, T./Schoper, Y. (2015) Towards a Measurement of Projectification : A Study on the Share of Project- Work in the German Economy. In: Wald, A./Wagner, R./Schneider, C./ Gschwendtner, M. (eds.): Advanced Project Management: Flexibility and Innovative Capacity. Volume 4. GPM: Nürnberg, Paper in PMaktuell Wald, A./Schneider, C./Spanuth, T./Schoper, Y. (2015) Die Projektifizierung der deutschen Wirtschaft: Ergebnisse einer Studie zur Messung der Projekttätigkeit. Projektmanagement aktuell. Paper for IRNOP 2017 Schoper, Y./Wald, A./Ingasson,H., Fridgeirsson, Th. (2017) Projectification in Western Economies: A Comparative Study of Germany, Norway and Iceland 20