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Research-Based Companies Perform Better

Economic Bulletin of October 8, 2012

Research-Based Companies Perform Better

By: Alexander Eickelpasch in: DIW Economic Bulletin 10/2012.

The past ten years have seen an expansion in industrial research. There has been a significant increase in the number of research-based companies, as well as in employment in research and development, and in expenditure in this area. Growth has been observed predominantly in companies in less research-intensive sectors and in small and medium-sized enterprises. Consequently, over the last decade, industrial research in Germany has become more widespread.

There has been steady growth in the contribution made by research-based companies to total manufacturing output and to employment. Moreover, these companies are considerably more efficient than non-research-based companies—in terms of per capita productivity—and have increased their lead over the course of time. Political support may have also been a contributing factor to the expansion of research and development, particularly in medium-sized industrial enterprises.