The paper deals with the effects of publicly funded research at universities, poly-technics and federal and state financed research labs on industrial innovations in Ger-many. In order to understand the current state of public research institutions in Ger-many, chapter two shortly describes its historical context, characterized by the traditional Central European view of natural science as a value in itself, the inertia of public institutions and tensions between federal and state responsibility for science policy.In the third chapter we will deal with the following question: Are innovating compa-nies able to identify the contribution of public research to industrial innovations and trace the source of these innovations? In a postal questionnaire, 2,300 companies were asked whether they had introduced innovations between 1993 and 1995 that would not have been developed without public research. Less than one tenth of product or proc-ess inno-vating firms said that they had introduced public-research-based innovations. The public-research-based products account for approxi-mate-ly 5% of all sales with new products. Even more important are the differences in the effectiveness of technol-ogy transfer between different types of public research institutions. Univer-si-ties are cited by firms with publicly suppor-ted innovations as the most important source, al-though publicly financed labs get almost as much citations. When firms were asked to name the most important public institutes, they most frequently cited the institutes of the Fraunhofer-Society. It seems obvious that their technology transfer is spurred by the higher share of research funds from industry. Big science labs are almost invisible, suggesting that their techno-lo-gy transfer to industrial firms still lacks effectiveness. One of the basic findings is that a considerable share of companies can indeed identify product and process innovations which they would not have developed in the absence of recent research of public institutions. The results are similar to the findings of Mansfield (1991) for the U.S. On the side of the firms, we find that German firms with R&D activities are more likely to profit from public research. Private and public re-search thus complement each other. Proximity may not have the same importance in Germany than in other countries, especially the U.S. The thesis that proxi-mi-ty is im-portant especially for high-tech or R&D-intensive industries is clearly rejected in the case of Germany. Although firms tend to cite research insti-tu-tions that are located in their local area, firms which are closer to the public research have no higher propensity to receive public research spillover. Contrary to the widely held opinion that proximity to public research institu-tion does promote collaboration between firms and public re-search institutions and increases the amount of received knowledge spillovers. Firms with a high R&D intensity cite remote public research institutes more frequently than less R&D intensive firms, sugges-ting that in Germany high-tech does not depend on co-location of public and private research. Yet, polytechnics tend to support small companies within their region, while universities and other research labs transfer knowledge more effectively to larger companies with no regional priority. Still, the most critical success factor for technology transfer is a firm´s own R&D activity.

Beise-Zee, Marian and H. Stahl (1998), Public Research and Industrial Innovations in Germany, ZEW Discussion Paper No. 98-37, Mannheim. Download