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Research and Development in German Industry: High Intensity, Low Growth

DIW Weekly Report 51/52 / 2022, S. 329-338

Heike Belitz

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Abstract

Research and development (R&D) expenditure in Germany decreased by 5.3 percent overall in 2020 compared to 2019. While the OECD countries actually slightly increased their R&D expenditure on average for the first time in a crisis-ridden year, it declined more sharply in Germany compared to the financial crisis of 2009; German industry, and here the automotive sector, suffered particularly. The decline in R&D personnel, however, was lower. Even before 2020, German industrial research was not growing particularly dynamically in an international comparison. R&D intensity, the ratio of R&D expenditure to output, increased over the years, but still remains beneath the level of the USA and Japan. Initial data for 2021 show while top R&D-spending German companies spent more on R&D than in 2020, growth remained under the average of international competitors. Globally, R&D is growing primarily in sectors that major German companies do not specialize in, such as software and computer services, hardware production, and pharmaceuticals and biotechnology. To secure the wide variety of technologies required to transform to a digitalized and climate-neutral economy, industrial companies are becoming increasingly dependent on knowledge gained internationally, for example through their own research units abroad or through international research collaborations.



JEL-Classification: O25;O30;C33;O50
Keywords: Research and Development, Manufacturing, International Comparison
DOI:
https://doi.org/10.18723/diw_dwr:2022-51-1

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