GI & GIS Market Characteristics

Section Index

Readers are invited and encouraged to comment on the information presented here, to inform us of other market information which may exist and to be critical of these data and assumptions. Comments, corrections or additions should be supported by a reference against which corrected or new information can be checked. Comments can either be sent to the GI discussion forum. This document will be updated as often as new information is brought to our attention.

Introduction

Estimating the size of the market for GI (data) and GIS (GI systems software and hardware) has never been an easy task. The major IT market research firms periodically attempt to estimate the size to the "GIS marketplace" based on a range of (usually different!) market sector definitions across various geographical regions. In recent years, these firms have also started to include figures for "data and data related services". These tend to be even more variable in definition than the GIS component of the market estimate. The market projections are almost always "global" in scope, based heavily on supply-side information from the USA/North America GI/GIS vendors and less so from other geographic regions of the world, including Europe.

In this section of the GI2000 Web site, we attempt to look at GI market place figures which have been forecast for different parts of Europe and other regions around the world, from various viewpoints (based on different definitions of the "market for GI"), in order to try to better understand the overall market place. Just as there is seldom agreement (except in scope) on the North American or global GIS market size projections from the competing market research firms (for a variety of reasons), so too we often find considerable variances in GI market predictions even within Europe.

Readers please note: The information presented on these pages is NOT a formal survey or forecast of European GI/GIS market size. Rather, it is an attempt to bring together in one place the many different sets of numbers, assumptions and predictions being made in regard to the "GI market" from across Europe and from around the world.

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Pitfalls to be aware of in predicting GI Market Size!

Forecasting "market size" is a complicated and often inexact process - considered by many to be more "art" than "science". This is especially true when trying to put numbers to a market which is poorly defined or which is defined quite differently by different researchers. In the case of geographic information, or "any information which can be referenced to a location on earth", which exists in raster (image), vector and text formats, across a wide range of industries and disciplines, the possibilities for confusion, making poorly qualified assumptions, etc. are rife.

Obvious mistakes to be avoided include:

  • Double (or even triple!) counting of product sales, whether this be data, software, hardware or services.
  • How do you define "public sector" and "private sector" - especially where public sector expenditure on GI data or services involves private sector sales or purchases - or where organisations which are officially in the "public sector" are required to perform as though they were in the private sector?
  • Comparing apples and oranges. Many reported statistics bundle hardware and software together, especially when the user is acquiring a complete GI "system". Many such sales today also include a certain amount of data - yet it may be quite difficult to differentiate the data component from the hardware and software component using sales figures alone.
  • Confusing the "book value" of GI (its value as an asset to a company or public organisation) with sales figures or expenditure on collection and maintenance or the "economic value to society" allocated to the use of GI (compared to the cost to society of the absence of such GI, i.e. for disaster prevention or management).
  • Assigning the economic or monetary value to any one GI transaction or, in some cases, even whole classes of transactions. This concept is explained in the GI-BASE study report of "volume versus value measures of demand" and the "economic characteristics of informaiton".
  • Allocating market sizes to individual countries by apportioning a larger, regional sum (for all Europe, say) according to population (as a percentage of the total regional population). This very simple statistical ploy takes no account of the varying states of readiness of different countries' economies to take up or otherwise implement a new technology.

There is also the question of what "value" does one assign to GI in relation to benefits to society, commerce and governments, over and above the actual sales value of data, if appropriate GI is available and properly used. For example, what is the "value", in terms of employment alone, of the GI collected by thousands of local and national government agencies which may never be "sold" on the information market in the commercial sense, but yet is very necessary for the functioning of government in relation to providing much needed services to citizens.

The EC launched a study (GI-BASE) in 1996 to attempt to better define the data component for the GI market place, specifically in Europe. The contractors defined the European market for digital geographic information " ... as the annual value of sales, to end-users, of digital geographic information that is separable and distinct from any system in which it is used". Following an extensive questionnaire survey, telephone and face-to-face interviews, culminating in Delphi approach among senior European GI actors, the contractors concluded that the European market for GI "base data" was on the order of 550 million ECU (ranging from 460 MECU to 750 MECU), growing at approximately 14% per annum.

This estimate is a very narrowly defined, purely sales oriented figure, which does not take into consideration GI sold as part of software packages (such as many travel or route planning products or "pre-packaged" demographic data such as Mosaic). It does not consider the "total economic expenditure" on GI, which has been estimated to be as high as 10 billion ECU, i.e. 20 times the size of the purely "data sales, market-oriented" figure propsed by the GI-BASE study. Nor does it take into account the "overall value to society" of having and using good quality GI. This latter measure of the value of GI, which is even more difficult to define and to evaluate than sales or economic expenditure, may perhaps never be assigned a value based on assumptions acceptable to all.

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Date last updated: 18 August 1998