Amidst increasingly fierce international competition, Germany is maintaining its position as one of the world’s most research-driven and innovative economies. The foundation for this is a strong research and innovation system in which stakeholders and support mechanisms act in a coordinated manner.
Roughly two thirds of research and development (R&D) activities take place within companies. One third takes place at higher education institutions or at public and publicly funded R&D organisations. The Federation and the Länder have specific individual and joint responsibilities within the German research and innovation system. They provide direction and establish a consistent framework. The Federation and Länder jointly finance research institutions and funding organisations, as well as research programmes and projects. Higher education institutions, non-university research institutions and departmental research institutions carry out both excellent basic research and application-oriented R&D. A number of other stakeholders are also involved, such as the German Research Foundation, foundations and funding organisations, and the European Commission. All of them make vital contributions to supporting research.
The Federation and Länder use a variety of tools to support research and innovation. These include, first and foremost, the project funding and institutional funding provided to Germany’s four major non-university research organisations (the Fraunhofer-Gesellschaft, Helmholtz Association, Leibniz Association and Max Planck Society) and the German Research Foundation (DFG), among other organisations. Other tools include the award of research contracts to third parties and more recent approaches, such as tax incentives for R&D and innovation agencies.
According to provisional calculations, 137.1 billion euros was spent on R&D in 2024, up 3.8% from 2023. With R&D expenditure as a percentage of gross domestic product at 3.17%, Germany has once again met the EU’s target of three per cent. In 2024, 840,000 people (in full-time equivalents) were employed in research and development in Germany.
More detailed information can be found in Chapter 2 of the Federal Report (in German).