Public research and industrial innovations in Germany

This paper deals with the effects of publicly funded research at universities, polytechnics and federal research laboratories on industrial innovations in Germany. We discuss the characteristics of companies that benefit from the findings of public research institutions. In questioning 2300 companies, we found that less than one-tenth of product- or process-innovating firms introduced innovations between 1993 and 1995 that would not have been developed without public research. These new products amount to approximately 5% of all new product sales. Universities are cited by firms with publicly supported innovations as the most important source, although publicly financed laboratories get almost as many citations. Big science laboratories are almost invisible, suggesting that their technology transfer to industrial firms still lacks effectiveness. Firms also tend to cite research institutions that are located close to the firm. But contrary to the widely held opinion that proximity to public research institutions does promote collaboration between firms and public research and increase the amount of received knowledge spillovers, we found no higher probability of publicly supported innovations for firms in Germany that an located near universities or polytechnics. However, the firm's own R&D activities instead support the ability to absorb the fndings of public research and turn them into innovations. Additionally, firms with high R&D intensities cite remote public research institutes more frequently than less R&D-intensive firms, suggesting that in Germany, high-technology does not depend on co-location of public and private research. (C) 1999 Elsevier Science B.V. All rights reserved.