The diversity of the German research and innovation system is the foundation of its success. R&D is carried out in a large number of public and private institutions. The funding for this is provided not only by the Federal Government, but also by the 16 state governments, as well as foreign and private contributors. R&D is carried out by public research institutions such as universities, non-university research institutions and institutions with federal and state ministerial research tasks, as well as private companies. In addition, various bodies and intermediaries, such as the DFG and non-profit foundations, play important roles in research funding. Research and innovation are thus in constant interaction with civil society and the private sector.
The Joint Science Conference (GWK) of the Federation and the Länder, established on the basis of Article 91b of the Basic Law, determines joint funding and also serves as a forum for mutual exchange. The respective ministers for science and finance of the Federal Government and the Länder are represented in the GWK with an equal share of votes. The GWK deals with all issues relating to the funding of science, research and education, science and research policy strategies and the science system, insofar as these affect the Federal Government and the Länder jointly. The GWK is responsible in particular for decisions relating to joint science funding in cases of supraregional importance. This includes, among other things, the Excellence Strategy, pacts between the Federal Government and the Länder, and the funding of research infrastructures and large-scale facilities at universities.
Evaluation and advice
Advisory bodies fill a mediating role between research groups, the private sector and civil society. The German Council of Science and Humanities (Wissenschaftsrat, WR) advises the Federal Government and the Länder on issues relating to the content and structural development of science and research and the higher education sector. The WR is composed of scientists nominated by science and research organisations, public figures appointed by the Federal President and representatives of the Federal Government and the Länder. For example, the WR was responsible for the evidence-based evaluation process for the National Roadmap for Research Infrastructures. This serves as a strategic instrument for prioritising policies for future, long-term investments in research infrastructures.
The Commission of Experts for Research and Innovation (EFI) consolidates the interdisciplinary discourse on innovation research in its annual report and advises the Federal Government in a variety of fields. This includes the current status and prospects of the German R&I system, specific priority issues and the task of developing actionable recommendations for the ongoing development of the R&I system. Until the end of the 19th legislative period, the Innovation Dialogue between the Federal Government, business and science formed an additional advisory structure on all aspects of innovation, and the High-Tech Forum advised on the implementation of the High-Tech Strategy 2025. These executive bodies are currently being expanded.
Public funding of science, research and education is mainly provided by the Federal Government and the Länder. Various funding instruments are available for targeted research funding. Medium- and long-term institutional funding, which is jointly financed by the Federal Government and the Länder, covers the entire spectrum of tasks: basic and applied research, research infrastructures and the strategic gearing of the German research landscape. Project funding from the Federal Government and the Länder supports fixed-term research, technology and innovation projects.
The private sector finances about two-thirds of annual R&D expenditure in Germany. These funds are used for both the R&D activities of companies and joint R&D projects among partners from industry and science. Private-sector R&D activities are predominantly determined by large companies. Nevertheless, SMEs play an important role, as do start-ups, as they often produce pioneering innovations.
A smaller proportion of R&D expenditure in Germany is financed from abroad. The European Commission’s funding of research, development and innovation is of great importance for the German research and innovation system. Other funders are international organisations (e.g. OECD, UN, UNESCO, NATO) and foreign companies.
Private non-profit institutions
Organisations that are not predominantly funded or controlled by the state or the private sector account for the smallest share of R&D expenditure. Stakeholders can be, for example, independent professional associations and learned societies as well as welfare organisations. In practice, organisations in this sector are foundations, associations, consortia, joint ventures, non-profit organisations, non-governmental organisations (NGOs) and the like.
Higher education institutions
The differentiated higher education landscape is a key element of the German research and innovation system. The more than 400 higher education institutions in Germany include all state and state-recognised private and faith-based universities and universities of applied sciences. The spectrum of their research ranges from basic research to applied R&D for the private sector. The German higher education system is essentially the responsibility of the Länder and is regulated by their higher education laws. Agreements between the Federal Government and the Länder allow scope for them to cooperate in funding science, research and education projects in cases of supraregional importance.
Federal institutions with R&D tasks
The Federal Government and the Länder maintain their own research institutions in the relevant ministerial departments. They address current social and sectoral policy issues in order to support political action. On the basis of scientific evidence, they act as bridge builders between the realms of science and policy, and innovation and application. The generally problem-specific and practice-based research deals with a broad range of topics. The state and municipal facilities with R&D tasks are institutionally financed from state funds and in some cases from third-party funds.
Private sector research institutions
Industrial research associations play an important role as an interface between the research community and SMEs in precompetitive research. They are organised into groupings such as the German Federation of Industrial Research Associations ‘Otto von Guericke’ e. V. (AiF). In addition, many external research institutions, research companies and so-called associated institutes (An-Institute) joined forces in the Deutsche Industrieforschungsgemeinschaft Konrad Zuse e. V. (German Industrial Research Association Konrad Zuse – Zuse Association).
Policymaking, research and innovation benefit from a lively exchange with society. In this way, the participation and involvement of civil society actors contributes to orienting scientific knowledge towards the needs of society. This can create understanding, trust, open-mindedness and openness to research and innovation. Science, research and innovation can benefit from the knowledge of the many, for example in the context of citizen science. Formats such as hackathons offer open participation opportunities for specific development processes.
Compared internationally, non-university research institutions constitute a characteristic feature of the German research and innovation system. As the cornerstone of public research, they cover the entire spectrum from excellent basic research to socially relevant applied research. Most non-university research is carried out at institutions that are jointly funded by the Federal Government and the Länder. These primarily include the research institutions of the four major research organisations: Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e. V. (Fraunhofer Society for the Promotion of Applied Research; Fraunhofer-Gesellschaft), Hermann von Helmholtz-Gemeinschaft Deutscher Forschungszentren e. V. (Helmholtz Association), Wissenschaftsgemeinschaft Gottfried Wilhelm Leibniz e. V. (Leibniz Association) and the Max-Planck-Gesellschaft zur Förderung der Wissenschaften e. V. (Max Planck Society).
The academies of sciences and humanities in Germany include the state academies of sciences and humanities, the German Academy of Sciences Leopoldina – National Academy of Sciences, and the German Academy of Science and Engineering (acatech). Their key tasks are to advise on political and social discourse, to engage in interdisciplinary scientific dialogue and to promote emerging researchers. In addition, they coordinate and implement long-term basic research projects. The general budget for the state academies of sciences and humanities is financed by the relevant host state.
Research and development in the private sector
Research and development activities are of crucial importance for the international competitiveness of the German economy. For the most part, they are carried out in companies. These activities are for the most part conducted by large, internationally active companies, but research and development is also a key aspect of the innovative capacity of SMEs. Basic research has a lower priority in the private sector. R&D in that context is predominantly application-based and essentially geared towards achieving directly utilisable economic results. It is not just the strong commitment of the business sector itself that spurs the success of innovation in German companies but also intensive collaboration between companies as well as between companies and science institutions. In particular, these collaborations make it easier to translate research results into innovative products and services.
Other R&D-supporting actors
A number of other relevant actors support R&D activities and make an important contribution to the funding of science and research. This includes the German Research Foundation (DFG) as the central self-governing organisation for science and research in Germany, as well as non-profit foundations and funding organisations. Statistically, the majority of publicly financed funding agencies come from the government sector, while actors independent of government and business are part of the private non-profit institutions sector.
The group of intermediaries in the German R&I system essentially comprises stakeholders that support R&D activities through their own funding programmes or represent the interests of the stakeholders. In addition to funding agencies such as non-profit foundations, these also include interest groups and chambers of industry and commerce. Intermediaries can also be understood as mediators between the financing agencies and the implementing providers.