Excellent Research and Development
A number of excellent universities, research and development centers, and business partnerships has significantly increased the attractiveness of the new federal states for international investors. A broad range of industry clusters – covering everything from renewable energies, optics, biotechnology, chemicals and electronics to nanotechnology, aerospace, and automobile assembly – provide promising opportunities.
Investors can profit from the know-how of more than 40 Leibniz Association institutions, 22 Max-Planck Institutes, 26 Fraunhofer Institutes, and 4 Helmholz Association institutions. The 23 universities and 36 colleges located in Eastern Germany also play an important role in training the region’s highly qualified workforce as well as in research.
Innovation – The Key to Future Prosperity
Germany is a major global innovation player, accounting for around nine percent of OECD member country total R&D expenditure. Public and private R&D spending is significantly above the OECD average – thanks to a progressive innovation policy and the country’s longstanding specialization in research-intensive industries. In 2015, a record EUR 14.9 billion in public R&D funding was made available – a EUR 261 million increase on the
previous year’s spending and equivalent to a 65 percent increase on 2005 R&D public funding levels.
The new federal states are rightly recognized the world over as a highly competitive and innovative industry and technology location within Germany. Constant investment in innovation has been the key to sustained economic growth and international competitiveness. By building on the traditionally strong industrial heritage of the region, Eastern Germany has become an international force in the technology fields of the future.
Research and development intensity levels in the new federal states compare with the world’s best. Eastern Germany’s R&D GDP share of 2.5 percent is significantly higher than the EU-28 average, and almost equivalent to US R&D share of GDP. R&D spending levels in the new federal states are equivalent to the national R&D budgets
of a number of central European countries. Public sector commitment to innovation in the region is further reflected in a public-private R&D spend ratio of 60:40. As a country, Germany also belongs to the select first
group of innovation leaders in the European Commission’s Innovation Union Scoreboard 2015 whose innovation performance is significantly above the European Union average (i.e. more than 20 percent). In 2014, German innovation performance was 22 percent higher than the EU average.
Home to a thriving Mittelstand of SMEs, Germany also leads Europe in terms of company innovation activities (both for science-based activities and non-R&D innovation activities including investments in advanced equipment and machinery); contributing more than one third of total EU business R&D and non-R&D innovation expenditure.
Only China exports more research-intensive goods than Germany, with the country ahead of both the USA and Japan.
The high density of innovative networks, research organizations and academic institutes in the new federal states provides the foundation for a market-driven, knowledge-based economy which makes close working partnerships between science and industry possible. Optimized innovation management measures and partnerships with world-class research providers allow companies to significantly reduce their R&D costs. These
factors, and an array of innovation-supporting instruments, have helped establish Eastern Germany as one of the world’s most attractive future-technology investment regions.
Investing in Research and Education – Creating a Knowledge Economy
Central to the region’s dynamic transformation into an innovative industry economy has been the presence of an extensive scientific and research and development infrastructure. At last count Eastern Germany was home
to 24 universities, 53 universities of applied sciences and around 200 non-university research institutions. The Higher Education Pact 2020 to promote higher education uptake has resulted in significantly increased university
matriculation levels, with the new federal states (excluding East Berlin) recording an 118 percent increase in university enrolment levels during the period 1989 to 2012.
The federal government set aside more than EUR 7 billion in funding for the Higher Education Pact 2020 for the period 2011 to 2015, with complementary research funding of EUR 1.7 billion made available to universities through the German Research Foundation. Substantial non-university research funding made available through the Pact for Research and Innovation, which enjoyed EUR 4.9 billion additional funding for the period 2011 to
2015, intensifies and accelerates the development of non-university research activity; allowing the country’s major applied and fundamental research institutions to consolidate their leading international positions.
Germany is committed to further strengthening working partnerships between universities and businesses. This will allow leading-edge clusters, future projects and comparable networks to expand their strategic cooperation activities with other innovative regions in the world.
Germany’s Fundamental and Applied Research Institutes
The Fraunhofer-Gesellschaft is Europe’s largest application-oriented research organization. Founded in 1949, the research organization undertakes applied research that drives economic development and serves the wider benefit of society. Its services are solicited by customers and contractual partners in industry, the service sector and public administration.
The Fraunhofer-Gesellschaft currently maintains 66 institutes and research units. The majority of the nearly 24,000 staff are qualified scientists and engineers who work with an annual research budget of more than 2 billion euros. Of this sum, around 1.7 billion euros is generated through contract research. More than 70 percent of the Fraunhofer-Gesellschaft’s contract research revenue is derived from contracts with industry and from publicly financed research projects. Almost 30 percent is contributed by the German federal and Länder governments in the form of base funding, allowing the institutes to work ahead on solutions to problems that will not become acutely relevant to industry and society until five or ten years from now.
The Fraunhofer-Gesellschaft plays a prominent role in the German and European innovation process. Through their research and development work, the Fraunhofer Institutes help to reinforce the competitive strength of the economy in their local region, and throughout Germany and Europe. They do so by promoting innovation, strengthening the technological base, improving the acceptance of new technologies, and helping to train the future generation of scientists and engineers. International collaborations with excellent research partners and innovative companies around the world ensure direct access to regions of the greatest importance to present and future scientific progress and economic development.
The Fraunhofer-Gesellschaft has institutes and research establishments in all six of the new federal states. Highlights in the organization’s history include the integration of one thousand personnel from the research landscape in the former East Germany, and the creation of ten new Fraunhofer institutes and branch offices in the region during Max Syrbe’s presidency. Today, the Fraunhofer-Gesellschaft has 20 institutes as well as numerous branch offices in the new federal states. Fraunhofer-Gesellschaft received a “Top 100 Global Innovator” award from Thompson Reuters for the second year in succession in 2014.
The Fraunhofer-Gesellschaft is a recognized non-profit organization that takes its name from Joseph von Fraunhofer (1787–1826), the illustrious Munich researcher,
inventor and entrepreneur.
Established in 1995 as a successor organization to the Arbeitsgemeinschaft der Großforschungseinrichtungen (“syndicate of large-scale research institutes”), the Helmholtz Association is dedicated to pursuing the long-term research goals of society, and to maintaining and improving the quality of life of the population. In order to accomplish this, the Helmholtz Association carries out top-level research to explore some of the major challenges facing society, science, and the economy. Research work is covered in six strategic fields: Energy; Earth and the Environment; Health; Key Technologies; Matter; and Aeronautics, Space and Transport.
With nearly 38 thousand staff in 18 research centers and an annual budget of almost EUR 4 billion, the Helmholtz Association is Germany’s largest scientific organization. Around two thirds of funding is provided as institutional support by the federal government of Germany and the German states (in a 9:1 ratio between federal and state contributions). The individual Helmholtz Centers are responsible for attracting more than 30 percent of their research budgets from a variety of funding organizations and sponsors. Targeted funding policies have allowed the Helmholtz Association to develop and expand a number of prominent research institutions for the systematic promotion of research activity in the new federal states. The research landscape in Eastern Germany – for example in Leipzig, Dresden, Potsdam, and Berlin (Buch) – has been significantly enriched by the presence of Helmholtz centers as well as former East German research institutions incorporated into existing Helmholtz centers. Working closely with international, national and domestic partners, the Helmholtz Association’s large-scale facilities and infrastructure are used to conduct research into complex systems to develop innovative applications and services. Helmholtz transforms scientific knowledge into market innovations, thereby contributing to create the technological basis for a modern and competitive society. The Helmholtz Association carries the name of the German natural scientist Hermann von Helmholtz (1821-1894).
The Leibniz Association is a non-profit association made up of 89 basic and applied science and research institutions. Non-profit organized in nature, the Leibniz Association promotes science and research objectives among its member institutions with specific significance accorded their scientific, legal and economic independence. Member activities include knowledge-based and applied basic research, scientific infrastructure maintenance, research-based service provision, and eight research museums.
German reunification saw the assimilation of notable East German research institutions into the “Blue List” of science and research organizations compiled by the Science Council. In 1990, the 81 institutions in total awarded “Blue List” status – in Eastern and Western Germany – formed the “Blue List Partnership” formally granting federal and state governments the constitutional right to cooperate on projects beyond regional and state boundaries and in the national scientific interest.
Renamed the “Gottfried Wilhelm Leibniz Science Association” (WGL) in 1997, but more commonly known as the Leibniz Association, the interdisciplinary association promotes partnerships between wholly autonomous research bodies including universities, other research organizations, and the public and private sectors at the domestic and international levels.
The creation of the Joint Initiative for Research and Innovation in 2006 provided significant financial stimulus allowing the Leibniz Association to establish an annual competition with EUR 30 million being made available to outstanding research projects and member institutions. Knowledge transfer is central to Leibniz Association activities, with members identifying areas of research focus for transmission to academic, policy maker, and public and private stakeholders.
Since German reunification, the Leibniz Association has helped numerous innovative business start-ups set up operations in the new federal states. With a workforce of around 18 thousand (including more than nine thousand researchers) in 2014, the Leibniz Association had a federal and state-allocated budget of more than EUR 1.6 billion for the same year.
Max Planck Society
The Max Planck Society (MPG) is an independent, publicly funded research organization focused on basic research. Established in 1948 as the successor organization to the Kaiser Wilhelm Society (founded in 1911), the Max Planck Society consists of 83 institutes and research facilities (including four institutes in other European countries and one Max Planck Institute in the USA). Each institute is assigned to one of three designated research areas: Chemistry, Physics and Technology; Biology and Medicine; and the Humanities.
The Max Planck Society counts among the world’s most successful research organizations, boasting 18 Nobel laureates from its ranks since the association’s inception. Max Planck Institutes (MPIs) focus on innovative research fields, as well as funding – and time-intensive research areas. New departments or institutes are established to address new and forward-looking areas of scientific inquiry. This process of ongoing renewal allows
the Max Planck Society to quickly react to scientific and technological developments. Max Planck Institutes are built up solely around the world’s leading researchers. They themselves define their research subjects, operate
in optimal working conditions, and have a free hand in the staff selection process. More than 21 thousand people work and conduct research on behalf of the Max Planck Society, of which more than five thousand are contractually employed scientists. In 2014, around 7,600 junior and visiting scientists were working in Max Planck Institutes.
In 2014, the Max Planck Society had an annual budget in the region of EUR 1.6 billion. The financing of the Max Planck Society is predominantly comprised of basic financing from the public sector. In addition, third-party
funding contributed to basic financing.
Max Planck Institutes are active in more than 4,200 cooperation projects with almost 5,600 partners across the world. The creation of international Max Planck Centers is further expanding the association’s research
spectrum in close cooperation with global research partners. Max Planck Centers have been set up in Canada, USA, Great Britain, Denmark, Israel, India, South Korea, Japan, France, and Switzerland. The Max Planck
Society is represented by Max Planck Institutes in all six new federal states.