Basics 4/6: Strong innovation capacity

In general, the emphasis German companies put on research and development (R&D) is above average, especially within the “Mittelstand” as mentioned in the previous article. This results in a strong domestic innovation capacity.

Germany`s spending on R&D as share of GDP is higher than the EU average, at 2.9 versus 2.1 percent in 2015. Whereas France spent 2.2 percent of their GDP, and the UK spent only 1.7 percent. Among the G7 countries, Germany ranks second behind Japan. Looking at the figures in absolute terms, Germany spends almost as much on R&D as the UK and France together.1

Germany is home to a number of the world’s most prestigious non-university research institutions, such as the Helmholtz Association, the Fraunhofer-Gesellschaft, the Max Planck Society or the Leibniz Association. Combined, these non-university research institutions had an annual R&D budget of around 9.2 billion euros in 2014.2 For these institutions, R&D is not limited by national borders.

About the author: Mark Pfeiffer is a German based retail professional, piloting nonfood consumer goods of international companies into German retail.

1 OECD: Research and Development (R&D), 2016
2 Germany Trade & Invest: Invest. Innovate. Internationalize. Industry Clusters in Eastern Germany, 2015