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Technology Neutral Public Support: An Important Pillar of East German Industrial Research

Author

Listed:
  • Heike Belitz
  • Alexander Eickelpasch
  • Anna Lejpras

Abstract

Industrial research in East Germany mostly takes place in small and medium-sized Enterprises (SMEs) and non-profit external industrial research institutions, whereas in West Germany industrial research mainly takes place in large companies. The German Federal government, along with Länder governments, subsidize industrial research in East Germany-within the framework of technology neutral public support programmes-spending about half a billion EUR annually. This approach, which subsidizes a broad spectrum of product and process innovations through project grants, has been proven, by and large, successful. Publicly supported industrial SMEs increased employment, gained access to new markets, as well as improved their productivity and profit situation. This is the finding of a study for the Federal Ministry of Economics and Technology conducted by the German Institute for Economic Research (DIW Berlin). In order to promote the growth of East German businesses, priority should be placed on research and development (R&D) and innovation. For this reason, the German government-which has expanded SMEs support to West Germany-needs to continue preference to East Germany.

Suggested Citation

  • Heike Belitz & Alexander Eickelpasch & Anna Lejpras, 2011. "Technology Neutral Public Support: An Important Pillar of East German Industrial Research," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 7(9), pages 63-71.
    • Handle: RePEc:diw:diwwrp:wr7-9
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    More about this item

    Keywords

    East Germany; Manufacturing; Innovation; R&D; Research policy;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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