SIEMENS

A well-developed, properly functioning infrastructure is the prerequisite for prosperity and sustainable growth. Roads in disrepair, data and power networks with inadequate capacity, and defective sewer networks cripple the economy. Modernizing the infrastructure and providing roads, rail lines, water and power supply systems in emerging economies will require investments totaling $41 trillion worldwide in the next 20 years. That’s what experts from Morgan Stanley Investment Management conclude in a February 2009 study.
The European Union sees a need for $900 billion for expansion of transport infrastructure alone — from high-speed rail lines to satellite navigation. The EU is planning to realize a cross-border network of rail, highway and water infrastructures by 2020, with a growing number of seaports and airports. A major portion of the stimulus programs intended to invigorate the European economy in coming years encompasses infrastructure projects for transport and communication networks, energy efficiency, building modernization, and hospitals. These measures add up to a total of about €42 billion in Germany, France, and Italy.
The single most important factor in reducing energy consumption and costs will be improving the energy efficiency of buildings. This is because the largest share by far — 95 % — of the energy used to provide heat, hot water, air conditioning, lighting, and ventilation for buildings in Europe is consumed by structures that were built before 1980, says an analysis developed by TH Projektmanagement GmbH in Berlin.
The U.S. stimulus package — the American Recovery and Reinvestment Act — calls for infrastructure expenditures amounting to the equivalent of about €253 billion for energy, transport, buildings, health, water supply networks, security, and IT. Development of intelligent energy networks, known as smart grids will be supported along with expansion of high-speed rail lines and digitization of data and processes in healthcare.
The government of China has also launched various programs for infrastructure measures — with total funding equal to €250 billion, including €166 billion from programs that existed before the economic crisis, and €84 billion in the form of additional economic stimulus elements. China is earmarking €73 billion for development of the nation’s rail system alone. Also slated for extensive upgrading are the drinking water and waste removal infrastructures in Chinese cities and the energy efficiency of buildings. Market experts from Morgan Stanley predict that China will account for approximately 80 % of the total infrastructure expenditures in East Asia.
Worldwide, stimulus programs for recovery from the economic crisis with a total volume of about €2 trillion have been announced and are already being implemented in part. Roughly one third of this sum — €700 billion — will be in the form of infrastructure investments, with the rest to be used for measures such as tax breaks for private households. For Siemens, analyses show that the market volume relevant to the company in terms of planned spending on infrastructure in the three fiscal years from 2010 to 2012 is about €150 billion. The largest share of this total, more than €85 billion, will be spent in the U.S., followed by China with €25 billion and Germany with about €5 billion. In all these countries, plans call for devoting major shares of the stimulus programs to green technologies. In China the figure is about 52 %, in Germany it amounts to 60 %, and in the U.S. it adds up to 31 %. Based on Siemens’ current share of the global market, calculations indicate that the markets served by Siemens could generate a potential contract volume of approximately €15 billion for the company, including about €6 billion, or 40 %, for environmental technology.