Innovation Policy for SMEs in Germany actual trends

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1 Innovation Policy for SMEs in Germany actual trends Alexander Eickelpasch, German Institute for Economic Research (DIW Berlin), Berlin, Germany Korea-Germany National Competitiveness Forum 2012 Seoul, 24 May 2012

2 Agenda 1. SMEs: An important part of the German Innovation System 2. Innovation and Technology Support for SMEs: Primarily technology neutral 3. Volume of Funding: Strong increase 4. Conclusions 2

3 1 SMEs: An important part of the German Innovation System 3

4 1 SMEs: An important part of the German Innovation System R&D and Innovation Activities in German Manufacturing 2010 (%) Source: MIP. Companies with... employees 1000 and more Continuous R&D Occasional R&D Innovation activities R&D expenditure: Share of SME on BERD: nearly 11% of 49.9bn Euros Growth 2010 vs. 2007: SME +12%, LE: +9% 4

5 1 SMEs: An important part of the German Innovation System R&D Expenditure in % of Value Added in Manufacturing 25 Companies with... employees 250 and more Source: Federal Statistical Office, DIW Berlin. R&D intensity of SME with R&D significantly lower R&D Outsourcing rate lower (SME: 15%, LE: 19%) Reasons for lower R&D activities in SME: constraints in external financing, indivisibility of R&D, information shortcomings,... 5

6 2 Innovation and Technology Support for SMEs: Primarily technology neutral 6

7 1 Innovation and technology support for SMEs Innovation and technology support for SMEs System of innovation policy in Germany Innovation and technology support for SMEs Mission oriented programmes e.g. biotech, nanotech, aviation, transport, energy, environment, IT (BMBF, BMWi, BMU) Research institutions (BMBF, BMWi, partly in cooperation with the Regions) Innovation-friendly framework conditions (BMBF, BMWi, BMF) Part of the High-Tech Strategy 2020 for Germany of the German Government 7

8 2 Innovation and technology support for SMEs BMWi BMBF Länder Funding of R&D projects o SME Central Innovation X Programme (ZIM) o ERP Innovation Programme X o KMU-innovativ X o Funding of R&D projects (X) Promotion of Hightech start ups o HighTec Start up Fund X o EXIST X Promotion of technology transfer o Collective Industrial Research (IGF) X o INNO-KOM-Ost X o Technology transfer organisations (X) o Innovation assistent (X) Cluster policies o Enterprise Region X o Competence networks Germany X o Regional cluster policy (X) Most SME programmes by the BMWi are technology neutral (BMWi) Mostly complementary state specific support schemes (Länder) European Union (Framework programme, Eurostars ) 8

9 2 Funding of R&D projects: SME Central Innovation Programme Objectives: Market oriented R&D Reduction of technical and economic risks Rapid implementation of R&D results Improvement of Innovation and Co operation skills in SMEs Funding module: ZIM-KOOP R&D cooperation projects between SMEs or SMEs with research organisations Funding module: ZIM-SOLO Single-company R&D projects Funding module: ZIM-NEMO Network projects between innovative SMEs Project agency: Project agency: Project agency: 9

10 2 Funding of R&D projects: SME Central Innovation Programme Conditions: Open to all technologies and industries Open call International co-operations possible Grants of up to 50 % (SME) and 100 % (research institutes), max. 350k Euros, in addition grants of up to 25k Euros for innovation services Fast administrative procedures Results: About projects per year (mainly SMEs, only few micro) Main Technologies: Engineering (production, materials, electrical, sensor) and IT High customer satisfaction (Survey of the German Chamber of Commerce DIHK) Further information at: 10

11 2 Funding of R&D projects: KMU-innovativ Objectives and conditions: Target group: Research intensive cutting edge SME with no funding experience in mission oriented programmes Facilitation and acceleration of the regular application procedure of the mission oriented programmes for SMEs 8 thematic areas: Biotechnology, Nanotechnology, Information and Communication Technology, Production Research, Resource and Energy Efficiency / Climate Protection, Optical Technologies, Microsystems, Research for Civil Security Results: Mobilised a substantial part of the target group One third of the submissions are first-time applicants Further information at 11

12 2 Promotion of Hightech start ups (HighTec Start up Fund) Objectives and conditions: Private/public venture capital fund for investments in young technology firms Support: In the start-up phase: 500k Euros (share holding and loans); Follow-up funding possible up to 1m Euros; Coaching Launched in August 2005; Fund: Euros 272m thereof Government (240m Euros) Further participants: KfW banking group, and 3 (since ) LEs Results: Within the first 5 years approx. 250 companies funded from the high-tech sector Gründerfonds II started in October 2011 (288m Euros, thereof 200m Euros Government) with KfW and 12 LEs Further information at 12

13 2 Promotion of technology transfer: Collective Industrial Research Objective and conditions: Since 1954: Facilitating of access to applied R&D by funding of pre-competitive R&D 101 self organized research associations of all kinds of industrial disciplines and technologies, R&D conducted by about 700 research groups located universities and non-profit research institutes Grants of up to 100% for research projects Research results for use of all members of the associations and beyond ( open innovation ) Budget 2011: 135m Euros Project agency: AiF Results: 2011: projects funding approx. 200k to 300k Euros Further information at 13

14 2 Innovation and technology support for SMEs Further information about R&D funding Federal Research and Innovation Funding Advisory Service Central point of contact for any questions concerning research and innovation funding (funding programmes, the persons to contact, ) Supported by 5 Federal Ministries Federal data bank on Funding Comprehensive and up-to-date overview about all kind of funding programmes of the Federal Ministries, the Länder, and the European Union 14

15 3 Volume of Funding: Strong increase 15

16 3 Volume of Funding Funding of R&D in and for SME by the Federal Government 2005 to 2009, m Euros Funding of business R&D, total Funding in and for SME, total Technology neutral programmes Mission oriented programmes Source: Federal Report on Research and Innovation 2010, calculations by DIW Berlin. Clear focus on SME: 40% of the funding of the business sector overall (1.1bn out of 2.2bn Euros in 2009) and 0.8% of the overall funding (11.9bn Euros) 10% of the innovation budget of SME is funded

17 3 Volume of Funding Budgets 2012 for Selected R&D and Innovation Programmes for SMEs Other Programmes Entrepreneurial Region INNO-KOM-Ost SME Central Innovation Programme (ZIM) Collective Industrial Research (IGF) EXIST High-tech Start-up Fund KMU-innovativ Sources: BMWi and BMBF. ERP Innovation Programme Budget about 1bn Euros (without Länder) ZIM will be the most important programme in the coming years 17

18 4 Conclusions 18

19 4 Conclusions Summary Variety of programmes corresponding to the needs of the SMEs Division of labour between different promoters Integrated into the High-Tech Strategy 2020 for Germany Conclusions Still need for streamlining Continuously adapting to changing framework conditions 19

20 Thank you very much for your attention Alexander Eickelpasch DIW Berlin German Insitiute for Economic Research Mohrenstraße 58, D Berlin, Germany 20

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