Jennifer E Decker and Thomas F Dickert

Collaborative case study

What underpins Fraunhofer's success in Germany?

By Jennifer E Decker and Thomas F Dickert

The Fraunhofer model is recognized internationally as synonymous with successful commercialization of know-how, and Fraunhofer Institutes have a formula for turning knowledge into demand-driven solutions for industry. So what are the key elements of this success?

Firstly, in the context of the German research ecosystem, Fraunhofer is but one of the players in the German innovation "team" which includes the Max Planck Society (curiosity-driven blue-sky research), Helmholtz Association of German Research Centres (large-scale research infrastructures, also targeted at global challenges), Leibniz Association (a union of German non-university research institutes, mixed topics and smaller-scale infrastructure), the universities (largely financed via the German provinces and the German Research Foundation DFG), and the federal research centres.

These players work together like a professional sports team: playing their position, but also collaborating, contributing to each other's mandates when necessary, and effectively filling the gaps in the technology continuum from discovery to commercial product.

The Fraunhofer model has evolved since its creation in 1949. Today, it represents 67 institutes in Germany and several international subsidiaries with an annual research budget totaling more than €2 billion. Fraunhofer continues to lead Germany as the most successful applicant for patents among all state-financed research institutions.

Financing model: For many years, funding from the federal Ministry of Defence accounted for more than half of Fraunhofer's total research budget, and the shared use of defence resources for civilian projects contributed to a sustainable financial future. The current funding mixture for Fraunhofer Institutes is approximately one third base funding from the German federal and provincial governments, one third from publicly-funded projects (e.g. European Commission, or competitive projects of the German research funding organizations), and one third derived from industry contracts.

Base funding allows Fraunhofer to conduct future-oriented research; public project funding allows the organization to engage in pre-competitive research; and industry contracts allow Fraunhofer to transfer research findings to the market. A special bonus system was introduced in 1973: every Euro obtained from industry partners is matched by an additional Euro from the government, to ensure support is directed to areas of strong industry focus.

Also notable, Fraunhofer is the second largest recipient of EU research funding, only behind the French CNRS.

Links to academia: Services provided to industry' is a directive every Fraunhofer Institute follows; nevertheless, each Fraunhofer Institute has autonomy to determine technical directions. Researchers have academic freedom and abide by a few simple corporate rules.

All institute directors are also professors at a university. This dual function offers numerous synergies, including access to students, and the ability to supervise postgraduate work. This way, the organization breathes — a flow of people coming in and going out.

Stakeholder engagement: Fraunhofer's focus is reinforced by strategic planning, and building strong links to networks via advisory boards. The Fraunhofer-Gesellschaft senate includes carefully-selected members with broad variety of backgrounds and expertise (e.g. industry, journalism, technical and social sciences) to remain abreast of societal issues and to spur debate between technology, innovation policy and academia. Institutes undergo regular feedback and peer-review exercises, together with foresighting and strategic audits.

Collaboration among institutes: Intra-Networks are also fostered to enable cooperation and sharing amongst Fraunhofer institutes, constituting a veritable web: systems approaches to projects (electromobility, modern cities), internal alliances with topical focus, SME-focused clusters, internal strategic programs (with internal competition and internal funding), collaborations, contracts, and a variety of international platforms, including subsidiaries abroad. International outposts provide permanent contact to up-and-coming influences, and new competition as global competitiveness demands awareness and cooperation.

Industry benefits: Fraunhofer supports the activities of industry, and in turn the knowledge economy. For example, staff participate in standards development, some of the more notable being MP3 and video formats.

Industry also benefits from a platform of know-how that draws from a spectrum of stakeholders in a particular sector, like automotive. Partnerships between Fraunhofer Institutes, OEMs, and Canadian research partners are combining forces and support quality assurance, reliable supply chains and training for sustainable manufacturing.

The Fraunhofer Project Centre in Canada at Western University concentrates on new methods for manufacturing composite materials. The partnership has refreshed the local automotive industry and created jobs in the region - similarly on the topic of fuel cells and clean energy with the Univ of British Columbia. A follow-up partnership with McMaster University in Hamilton holds promise to boost regional innovation in life sciences.

Fraunhofer has become a strong brand with a strong operational model, including confidentiality of contract research, continuity of key staff, reliable project management, and ISO 9000 series reproducibility. Hallmarks of Fraunhofer include market relevance and highly qualified people.

The Canada-Germany Science and Technology Cooperation Treaty, signed in 1971, provides a context for learning from each other and developing mutually beneficial relationships through technology development. It also provides a platform for focused discussion with Fraunhofer Institutes. Based on current interest and activities, the future of Fraunhofer-Canada partnerships is bright.

Dr Jennifer E Decker is a science and technology counsellor at the Canadian Embassy in Berlin.

Thomas F Dickert works in the International Business Development division at the Fraunhofer-Gesellschaft head office in Munich