Germany's Non-Profit R&D Groups Boost Private Sector Manufacturing as Slowdown Looms

Article excerpt

Economic slowdown has now spread to Germany, braking domestic government and corporate R&D spending. But despite cutbacks in such big areas as machine tools, aerospace and other defense-related programs, Bonn and German industry are making sure that a key element in the country's applied research infrastructure remain intact--the non-profit institutional research groups serving all of German industry.

"More than ever before, smaller and medium-sized companies without sufficient in-house R&D resources need to cooperate with research institutions," says Claus Zelle, an official at the Federal Ministry for Research and Technology in Bonn. "Also, big companies continue to rely heavily on our state-supported research infrastructure for trained experts and sophisticated equipment."

The infrastructure has been quietly built up during the postwar era, enhancing production technologies in practical ways. It has helped establish German companies as world-class producers of quality products.

Today, an extensive network of non-profit R&D institutions supports both large-and medium-size German companies in refining existing manufacturing technologies for key markets and spreading this know-how among as many companies as possible.

The German research system is uniquely structured to serve the needs of individual industries while providing a bridge for cross-cutting technological developments to many different industry sectors. Smaller firms, like tool-maker Guildemeister AG and the precision instruments supplier Carl-Zeiss GmbH, benefit from sharing information and resources to gain a competitive edge. Similarly, big-name companies like Siemens AG and Daimler-Benz AG can tap expertise at the contract research facilities as well as at smaller, sophisticated supplier firms. This information sharing applies to technology for manufacturing only--not to individual products.

The exception is German's powerful chemical industry, which keeps almost all of its RD in-house for competitive reasons. "The pharmaceutical companies are very competitive," says Helga Franz, a spokesperson for the Confederation of Industrial Research Associations (Arbeitsgemeinschaft Industrieller Forschungsvereinigungen, or AIF) in Cologne. "Traditionally they have conducted their own basic and applied research to maintain a competitive edge."

CONTRACT OR COOPERATIVE RESEARCH

Firms that need to supplement their technology development can choose between two main channels: contract research facilities, notably the non-profit Fraunhofer-Gesellschaft, or cooperative industrial research associations, such as AIF.

In its recent report Germany Technology Policy-Incentive for Industrial Innovation, the Washington D.C.-based Council on Competitiveness says contract and cooperative research institutes offer five specific advantages to German companies:

* Supporting research by selecting and pursuing projects that companies have labeled as priorities.

* Encouraging an exchange of information between industrial and academic communities.

* Providing commercial assistance. …