German biometrics market poised for strong growth

Here is a case of Fingerspitzengefühl (literally): The German market for biometrics will grow by more than 200 percent in the years to come — from about 120 million Euros in 2006 to 300 million Euros by 2010. Fingerprinting remains the most important technology, but face recognition biometrics is also growing (German business professors would say that this growth gives new meaning to the concept “Betriebsführung mit Fingerspitzengefühl”).

The study was carried out by the German Association for Information Technology, Telecommunications and New Media (BITKOM). It predicts that the share of face recognition technology in the total biometrics market will grow from currently 20 percent to 30 percent.

Currently there are about 100 German companies employing thousands of people which operate in the field of biometrics or work on systems integration. Most of these companies are located in Bavaria and Baden-Wurttemberg. Next on this list are Hesse and North-Rhine Westphalia as well as Berlin. Here is an opportunity for nimble investors: Given that most of these companies are small and medium-sized entities, they quite often do not have sufficient capital in order to finance research, development, and international marketing.

The German market for biometrical technologies is strongly influenced by political decisions, as is the case in other countries. It is estimated that the share by government in demand for biometric solutions would amount to 45 percent of the total German biometrics market by 2009. The importance of public demand also explains why biometrics is so hot an issue in the United States, where turnover in the biometrics industry amounts to 0.05 percent of GDP, which is almost three times as high as in Europe. According to estimates by the New York-based International Biometric Group, global turnover in the biometrics industry will rise from 1.8 billion Euros in 2006 to 4.8 billion Euros in 2010.