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Research and Technology
Factsheet No.5 (April 2002)

The Fraunhofer Society (Fraunhofer-Gesellschaft, FhG)

The Fraunhofer Society (FhG) is one of Germany’s four non-university research organisations. It focuses on applied research. After the merger with the Research Centre for Information Technology (GMD) in Spring 2001, the number of FhG institutes has increased to 56. They undertake contract research for the public sector, government and industry, including small and medium-sized enterprises (SMEs), which lack the critical mass to carry out their own R&D. Members of the institutes play an important role in the promotion of young scientists through university teaching. The FhG also acts as an adviser to government and industry on research-related issues, particularly on the commercialisation of new technologies.

Structure and Priorities

The Fraunhofer Society’s headquarters are based in Munich. Professor Hans-Jürgen Warnecke chairs the Executive Board of the FhG. The Senate, which comprises representatives from industry, science and government, sets research priorities and determines the allocation of resources to the institutes on the basis of advice from the Scientific and Technological Council (WTR). The Fraunhofer Institutes focus on eight priority areas:

materials technology and component behaviour;
production technology;
information and communications technology;
microelectronics and microsystems engineering;
sensor systems and testing technologies;
process engineering;
energy and construction technology, environmental and health research;
technical and economic studies and information transfer.

In order to maximize their potential, the FhG institutes form cooperative alliances, thus jointly offering their services on the market. Currently, there are seven cooperative alliances formed by 48 institutes, which also advise the Executive Board on structural and business development within their research field. They are:

The Information and Communication Technology Alliance
The Microelectronics Alliance
The Surface Technology and Photonics Alliance
The Production Alliance
The Materials and Components Alliance
The Polymer Surfaces Alliance
The Life Sciences Alliance

The recent merger with the GMD, a former Helmholtz Research Centre, resulted in the formation of the largest IT research group in Europe, the Fraunhofer Information Technology and Communication Group, which includes 15 institutes. It improved the FhG’s and also Germany’s competitive strength in the IT area. The Federal Ministry of Education and Research supported the merger financially.

Another emerging research priority of the FhG is the life sciences area. Four of the Fraunhofer Institutes pooled their biotechnological expertise in a "Life Science Alliance" in December 2000. They conduct research in the field of bio- and genetic engineering, medical technology, pre-clinical and clinical research and environmental research and protection. The goal of the alliance is to promote the industrial development of biotechnology and thus link basic research and industry production. The revenue generated by the new alliance in 2001 amounted to € 50 million.

Facts and Figures about the Fraunhofer Society

The Fraunhofer Society’s 2001 budget was € 977 million   (£1=€1.6), an increase of € 217 million over the previous year. Some € 100 million was revenue generated by the former GMD institutes. The Fraunhofer Society has three main sources of income:

institutional funding provided by the federal and states (Länder) governments on a 90:10 basis, (a total of € 320 million in 2001 plus an additional € 36 million from the Federal Ministry of Defence)

public-sector project grants from the EU, federal and states sources

Industry funding from contract research (some € 278 million in 2001).

Some two thirds of the FhG’s annual budget of almost € 1 billion is covered by contract research carried out on behalf of industry, the state and public institutions. Following the merger with the GMD, the Fraunhofer Society employs close to 12,000 staff.

Technology Transfer

Fraunhofer Institutes focus on applied research and development but an amount of strategic and precompetitive research is also undertaken. Research is usually conducted in the form of projects funded from public-sector grants or by industry, mainly SMEs. The latter include customer-specific solutions to companies’ problems, for instance the adaptation of specific processes or technologies in accordance with company requirements. With an annual staff fluctuation rate of 12%, the Fraunhofer Society continuously transfers technologies and expertise into industry. The FhG has introduced three mechanisms to promote the transfer of research into industrial applications:

Application Centres (Anwendungszentren) are based at individual institutes and form a platform for contract research for the specific needs of industry.

Innovation Centres (Innovationszentren) seek to bridge the gap between applied R&D and the introduction of new products on the market. Two innovation centres, both located in Bavaria, specialise in telecommunications engineering and recyclable polymers.

Demonstration Centres (Demonstrationzentren) combine the expertise of several Fraunhofer Institutes to improve the R&D infrastructure in priority areas. These centres also provide training opportunities and consultancy services for SMEs.

FhG Institutes generally offer university graduates training opportunities in various technological areas.

Patent and Licensing Activities

In 2001, the Fraunhofer Society was granted 166 new patents, raising the total number of active German patents of the FhG to 1372. Most of them come from the engineering and microtechnology areas. In 2000, the FhG’s central patent and licensing agency (PST, Fraunhofer Patentstelle) had an annual budget of close to € 5m. Its role is to advise and support Fraunhofer Institutes on patent and licensing matters. It is also responsible for providing consultancy on patent and licensing issues to independent investors, universities and non-university research facilities. The centre runs three technology transfer projects: an initiative to promote patent activities in Bavarian universities (Bayern Patent); the Patent and Licensing Agency of the German Human Genome Project (PLA), which assists industry and publicly funded institutes with the commercialisation of research resulting from the German Human Genome Project; and the Technology Transfer of the National Genome Research Network (TT NGRN), a project promoted by the Federal Ministry of Education and Research.

Spin-offs from Fraunhofer Institutes

Some 300 companies have been spun off from the Fraunhofer Society since 1992, mainly in such areas as information technology, life sciences, material research and environmental engineering. The Fraunhofer Venture Group was established in 1999 to support spin-offs by providing consultancy on start-up funding and business plan design. It also offers access to a network of consultants, venture capitalists and banks. The Fraunhofer Venture Group takes out partnerships, usually by providing technology licences. To a very limited extent, it also provides seed capital. In the year 2000, there were 48 spin-offs from the FhG. The Venture Group was involved in about half of them.

International Activities

The Fraunhofer Society has two subsidiaries in the US, which operate centres from five locations. They focus on computer graphics, biomedical engineering, materials research, production technology and software engineering. The centres aim to transfer local expertise into the Fraunhofer Society and to increase its customer base overseas. The FhG has also established four Representative Offices in South East Asia focusing on marketing and business expansion. In April 2001, a further Fraunhofer Representative Office officially opened in Brussels. The FhG also maintains Liaison Offices in China and South East Asia, which aim to establish R&D collaboration projects, win R&D contracts for the affiliated Fraunhofer Institutes, provide technology consultancy for local companies and to support German companies expanding research and production activities to the region. The FhG’s revenue acquired from foreign contracts increased in 2001 to some € 82 million. Its income from European partners accounted for 70% of this income. Business with UK companies accounted for some € 2 million in the year 2000.

Further Information and Literature

English-language information on the Fraunhofer Society with links to all institutes is available on the Internet at http://www.fhg.de. The FhG publishes a number of English-language brochures, including a guide to its research establishments and sectoral publications on priority research areas. The Society also publishes a regular newsletter "Research news" and a bilingual German/English guide to its institutes on CD-ROM. The annual report 2001 is only available in German. Copies of these may be obtained via the Internet or from:

Fraunhofer-Gesellschaft e.V.
Leonrodstr. 54
80636 Munich, Germany
Tel: +49 89 1205 459
Fax: +49 89 1205 317
E-mail: fraunhofer.presse@zv.fhg.de
Internet: http://www.fhg.de

 

Research and Technology Section
British Consulate-General Munich
Bürkleinstrasse 10
D-80538 München

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© 2001 British Embassy Berlin