Publications: Science Omega Review Europe Issue 1

Small and mighty - an article from Yvonne Proppert

Industrial machinery turn ideas into products, SMEs need a market driven approach of funding schemes that can help them to bridge the gap between research and the market – often called the ‘death valley’ – to develop technological breakthroughs into viable products with strong commercial potential.
Yvonne Proppert
Yvonne Proppert, President of the German Federation of Industrial Research Associations, describes how the power of SMEs can be harnessed to push innovation...

Entrepreneurial innovation is Germany’s most valuable resource, and is the key to employment and job creation, prosperity and economic growth. At the same time it contributes to the main current and future societal challenges we face, such as climate change, shortages in the global food supply, and the finiteness of fossil raw materials and energy sources. Viable solutions for these urgent questions of the 21st Century can only be provided with the help of research and new technologies and through the dissemination of innovation.

Perhaps more than in any other European country, in Germany, small and medium enterprises (SMEs) are the backbone of the economy. As such, they play a vital role in innovating activities to open up promising lead markets and to use their value creation potential. But as research and development (R&D;) is becoming increasingly complex and interdisciplinary, SMEs need special support to make up for disadvantages due to their size. In order to enhance the innovative strength of SMEs, the German government provides public funding for R&D; projects. This enables SMEs to tackle financial risks of R&D; activities.

Aside from financial aspects, another central element for the successful creation of innovations for and in SMEs is a continuous cooperation with other businesses and research institutions. To stimulate such cooperations, the German Federation of Industrial Research Associations (AiF) was founded almost 60 years ago. The innovation network consists of 100 industrial research associations with approximately 50,000 businesses, mostly SMEs, 1,250 associated research institutes, and affiliates in Cologne and Berlin.

As an industry-driven organisation, alliances are built with partners from industry, science and the German government in order to turn ideas into successful products, processes or services. In addition to permanent staff, several hundred representatives and experts work on a voluntary basis to help initiate applied R&D; for SMEs, to qualify the new generation of academics in innovative fields, and to organise the distribution of scientific knowledge.

One core technique in mobilising SMEs is Industrial Collective Research (Industrielle Gemeinschafts-forschung, IGF). Collective research is a mechanism that enables businesses to solve shared problems through shared projects. This kind of pre-competitive research closes the gap between basic research and industrial application and is funded by the German Ministry of Economics and Technology. The results are publicly available and provide the basis for individual adaptations within enterprises.

Collective research is based on industrial research associations. Each association represents a certain business sector, mostly SMEs from specific branches of the economy or fields of technology, e.g. mechanical engineering, the food industry, or information and communication technologies. The research associations form scientific committees and boards with representatives from both the industry and research institutions. Those committees collect and create ideas for research projects and develop projects representing common research needs within an industrial branch or field of technology, before submitting them via AiF for public funding.

By joining a research association and taking an active part in its committees, SMEs directly influence the association’s research agenda and priorities. Project monitoring committees consisting of industrial representatives are established to monitor each project and to ensure its continuing focus on industrial needs. Thus, Industrial Collective Research gives SMEs access to a continuous stream of new knowledge that can be used to develop own products, processes and services. Moreover, it provides an opportunity to build up individual innovation networks by creating sustainable links between different SMEs, with companies along the entire supply chain, and research institutions.

This persistent meeting ground and communication platform for all participants in the innovation process encourages interdisciplinary projects and enhances companies’ innovative strengths. However, to turn ideas into products, SMEs need a market driven approach of funding schemes that can help them to bridge the gap between research and the market – often called the ‘death valley’ – to develop technological breakthroughs into viable products with strong commercial potential.

Last but not least, to provide sufficient scope and incentives for invention and innovation, companies need a positive innovation climate and planning security in order to being able to take far-reaching investment decisions. Both factors depend on individual political measures. That is why governments should constantly review the innovation-friendliness of legal and extra-legal parameters, at first on a national level. As R&D; activities continue to become more international, governments should additionally take the European level into account. The EU has the objective to strengthen its scientific and technological bases by creating a European research area in which researchers, scientific knowledge and technology circulate freely, and encouraging it to become more competitive – including its industry. The EU should enable SMEs to take part in these developments by considering their specific needs.

SMEs can and will substantially contribute to solve the great challenges of our time, because for a growing number of them, constant innovation and its management are central elements of their business policy.

Yvonne Proppert
President German Federation of Industrial Research Associations (AiF)

[This article was originally published on 9th April 2013 as part of Science Omega Review Europe 01]


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