How do German businesses compare internationally?

German companies are among the most innovative in the world. Business-based and -financed investments account for more than two thirds of all R&D funding in Germany. Around two per cent of gross domestic product is spent on R&D by German companies.

The chart shows R&D expenditure by German companies as a proportion of GDP: 2.1 per cent.

This means they are among the top ten industrialised countries. And when it comes to researchers who work in companies, there is hardly any country with more R&D personnel.

Important role played by research

Research plays an important role for the German economy: research-intensive industries and knowledge-intensive services accounted for 40.7 per cent of total gross value added in Germany in 2022.The German economy is thus specialised in the production of medium-high technology such as vehicles and mechanical engineering products to a greater extent than any other Western industrialised country.

Business R&D is international

Many German companies conduct research abroad and some even have their own global networks, such as the automotive component supplier Continental. It maintains 505 production and research sites in 56 countries and markets. Or the family-owned company Boehringer Ingelheim: with 53,500 employees worldwide, this research-driven biopharmaceutical enterprise has a worldwide research and production network with central facilities in countries including Germany, the USA, Austria, Japan, France and China.

Hidden champions

It is not only the big household names that are researching for the future, however. The “Weltmarktführer-Index” (World Market Leader Index) compiled by the HBM Unternehmerschule at the University of St Gallen in Switzerland lists more than 500 champions in Germany – for example, the technology enterprise ZF Friedrichshafen AG. An automotive supplier, it is one of the companies that files the most patents with the German Patent and Trade Mark Office. This is hardly surprising given that ZF Friedrichshafen spends 7.6 per cent of its annual turnover on research and development.

Facts and figures

Spending more than 2% of gross domestic product on R&D, the German economy is one of the top ten internationally when it comes to business R&D

German research-intensive industries and knowledge-intensive services account for 40.7% of gross value added

Germany is home to more than 500 hidden champions.