German Innovation Survey 2012 - Large Companies Expand Innovation Budgets Significantly

In 2011 the innovation expenditures of German companies increased by 9.2 per cent and reached a new all-time high of 131.9 billion euros. It was the larger companies which accounted for the major part of the increase. Despite the robust economic situation, small and medium-sized companies were reluctant to invest. The share of companies which introduced innovations hence dropped below 40 per cent. The share of turnover created with new products reached 14.2 per cent in 2011, thereby falling slightly below the value of the previous year. These are central findings of the recently published “German Innovation Survey 2012”. The survey is conducted by the Centre for European Economic Research (ZEW) in Mannheim in cooperation with the Fraunhofer Institute for Systems and Innovation Research as well as the Institute for Applied Social Sciences (infas) on behalf of the German Federal Ministry of Education and Research (BMBF).

Expenditures on innovation are higher than ever

In 2011, the companies of the German economy spent 131.9 billion euros on innovation activities. The innovation budget of the German economy was thus about 1.9 billion euros higher than the planning figures for 2011 of the previous year’s survey. Companies in the sector of the research-intensive industry and other industries had the largest increases in expenditures. Especially the vehicle manufacturing and the electrical industry contributed a significant share to the increase of the innovation budget. Furthermore, especially companies of the engineering, chemical and pharmaceutical industry as well as the energy sector accounted for the growth of the budget. High innovation expenditures are a prerequisite for success with new products and improved production methods, and they are also important to secure competitiveness.

A note on the innovation expenditures of the German economy: innovation expenditures include all expenditures for research and development (R&D) as well as further expenditures for machines, devices, software, the protection of intellectual and industrial property rights, advanced training, marketing, design, construction, and further activities regarding the development and introduction of product and process innovations. Total innovation expenditures are about twice as high as the expenditures on R&D.

Further increase of innovation budgets expected for 2012 and 2013

The planning figures of the companies from spring and summer 2012 indicate that expenditures on innovation will increase further in 2012 and 2013. It can be expected that the companies will spend 138.0 billion euros on innovation activities in 2012. In 2013 a further increase to 140.7 billion euros is likely.

Decreasing Share of Innovators

“Innovators” are companies which introduced product or process innovations. Their share of the total number of companies decreased to 39.5 per cent in 2011, thereby falling three percentage points below the level of 2009 and 2010, which had already been low. An especially low rate of innovative firms exists in the sectors of mining and energy supply, water supply and disposal, as well as the transport sector. In contrast, IT and telecommunication, chemical and pharmaceutical industries, as well as the engineering and electrical industry are the sectors with particularly high rates of innovative firms.    

No sales increases through innovations

In 2011, the returns on investments in innovative products and production methods in the German economy remained more or less on the previous year’s level. Product innovations of the German economy generated a sales volume of about 728 billion euros in 2011. This is equal to 14.2 per cent of the total sales of the German economy. The share of sales hence ranged slightly below the previous year’s level of 14.8 per cent. Regarding process innovations, a shift from cost-reducing to quality-improving process innovations can be observed. In 2011, some 18 per cent of the companies were able to achieve quality improvements by means of new procedures (16 per cent in the previous year). These quality improvements led to an increase in sales of 2.6 per cent (2010: 1.7 per cent). For 12 per cent of the companies, new procedures led to decreasing costs, the same values as in the year before. Cost savings due to process innovations amounted to 3.5 per cent on average in 2011; in 2010 this rate was at 3.7 per cent.

The German Innovation Survey

The presented results are figures from the German Innovation Survey. This representative survey is conducted yearly by the Centre for European Economic Research (ZEW) in Mannheim in cooperation with the Fraunhofer Institute for Systems and Innovation Research and the Institute for Applied Social Sciences (infas) on behalf of the Federal Ministry of Education and Research (BMBF). It is the German contribution to the Community Innovation Survey of the European Commission. Some 12,300 companies from industrial and service sectors participated in the German Innovation Survey 2012.

For further information please contact

Dr. Christian Rammer, Phone +49 621/1235-184, E-mail rammer@zew.de