Industrial research
German companies are among the most innovative in Europe. Industry-based and -financed investments account for more than two thirds of all R&D funding in Germany.
Companies are especially involved in applied research and work closely with universities, universities of applied sciences and non-university research institutes. Examples of successful technology transfer can be found in the areas of environmental research, resource-efficient production and new materials.
Organisational details
German companies are affiliated to different, usually industry-specific associations to effectively represent their collective interests. The Federation of German Industries (BDI) is the umbrella organisation for more than 40 affiliated industrial associations that represent the interests of over 100,000 companies with more than 8 million employees. The BDI coordinates the views and recommendations of its members and provides business support, such as information covering all fields of economic policy.
Cooperation between industry and research
Industry and research cooperate in many areas. For example, there are numerous joint programmes and research projects involving companies as well as research and research-funding organisations.
Many different forms of cooperation are possible here:
- Contract research for industry carried out by universities and non-university research institutions
- Joint staffing and funding of research projects
- Industry-funded research groups
- Donations and sponsorship for specific R&D institutes
- Establishment of endowed professorships by companies
- Jointly funded research structures or institutes
- New collaborative models in networks, clusters or public-private partnerships/research campuses
The Deutsche Forschungsgemeinschaft (German Research Foundation, DFG) also supports knowledge transfer between research and industry. One example is a transfer project on OLED technology in which the University of Augsburg and lighting manufacturer Osram are jointly researching ways of increasing the energy efficiency and operating life of this promising technology.
Facts & figures
- Approx. 451,000 R&D personnel, including 262,000 researchers (2018)
- R&D expenditure by the private sector as a proportion of GDP: 2.2% (2018); annual budget for internal R&D expenditure: approx. 75.6 billion euros; additional external R&D expenditure: 21.6 billion euros (2019)
Research activities
The largest investments are made by the automotive sector: carmakers and their suppliers spend almost 40 billion euros on research and development (internally and externally). That is well over one third of the total amount invested in R&D by German industry. Accordingly, this is also where the largest number of people are employed: almost 132,000 employees work in R&D for the automotive engineering sector.
Electrical engineering companies also engage heavily in research. They spend more than 12 billion euros on R&D and employ nearly 80,000 people in the research sector.
The German mechanical engineering sector is also strong in research: companies here invest almost 8 billion euros and employ 50,000 R&D personnel.
Among the world leaders
In an international league table of companies with the highest R&D investments, German companies rank among the world leaders. The car manufacturers Volkswagen and Daimler are in the top ten.
© 2018; source: OECD; deviation in the total amount is due to rounding
Research budget
German industry’s annual spending on research and development reached 75.6 billion euros in 2019 for internal R&D expenditure, more than ever before. Industry is responsible for carrying out and funding over two thirds of R&D activities in Germany.
Industrial research associations
Small and medium-sized enterprises (SMEs) play a central role in research and development (R&D) in Germany. It is also important for SMEs to pool their R&D resources because as a rule these businesses have insufficient or no research capacities of their own, especially with regard to more basic research.
Research-based companies and independent private research institutes have joined forces with the aim of carrying out industrial research especially for the SME sector.
Find out more about these industrial research associations:
Industrial research in Germany
2018, 32 pages
What makes German industrial research so successful? And what opportunities does it offer talented researchers? Find out in this brochure.
Bundesverband der Deutschen Industrie e.V. (BDI)
The BDI is the umbrella organisation of German industry and industry-related services. It represents more than 40 trade associations and over 100,000 enterprises with roughly eight million employees.
BDI websiteGermany Trade & Invest (GTAI)
Germany Trade & Invest promotes Germany as a business and technology location and supports companies based in Germany with global market information.
GTAI websiteGerman Centre for Industry and Trade
German Centres are based in China, Mexico, Russia and Singapore. They offer offices, services and networks and bring together German and local businesses with foreign trade development agencies of German industry, the German states and the Federal Government under one roof. The German Centres are primarily open to German enterprises.
German Centre website