“Fraunhofer’s strong growth record demonstrates the attractiveness of the services we offer in the research and development market, and illustrates the potential for innovation that exists in German industry,” said Professor Reimund Neugebauer, President of the Fraunhofer-Gesellschaft. Together with Senior Vice President Finance, Professor Alfred Gossner, he presented the 2013 financial results of Europe’s largest applied research organization.

The organization’s total business volume comprises budgeted expenditure on contract research, defense research and major infrastructure capital expenditure. In 2013, the volume of contract research grew by three percent to reach 1661 million euros. Approximately 70 percent of Fraunhofer’s contract research volume is derived from contracts with industry and publicly financed research projects. The remaining 30 percent of this budgeted expenditure is covered by base funding provided by the German federal and Länder governments. In 2013, the volume of defense research increased by one percent to 114 million euros. This figure groups together all research activities in the related fields of defense and security. Major infrastructure capital expenditure amounted to 235 million euros, just short of its record level.

Revenue from private-sector research contracts reaches all-time high

Contract research is Fraunhofer’s core activity. “Through their work on research and development projects commissioned by industrial firms and companies in the service sector, the Fraunhofer Institutes help to transform the results of research into real-life products, thus playing a central role in Germany’s innovation process and that of Europe as a whole,” explained Professor Neugebauer. Project revenue from contract research increased by six percent overall to reach a total of 1200 million euros, thus growing at a faster rate than total business volume. This sum includes an amount of 578 million euros attributable to industrial revenue, which was one percent higher than in the previous year. “Contract research for private-sector customers reached a new all-time high of 462 million euros, which is two percent higher than in 2012,” commented Professor Gossner.

Public-sector revenue from the German federal and Länder governments picked up again after last year’s cutbacks, rising by 13 percent to 431 million euros. This increase was particularly marked in the case of the Länder, whose contribution grew by 21 percent to reach 144 million euros. Revenue from the European Commission rose by five percent to 92 million euros.

Investment in new research laboratories

In 2013, Fraunhofer spent a total of 235 million euros on improvements to its research infrastructure. “As a result, major infrastructure capital expenditure increased by 18 percent compared with the previous year, almost equaling the record level of 2011. This is all the more significant in that we no longer had the additional support of the government’s economic stimulus programs,” commented Professor Gossner.

Average of more than two patent applications filed each workday

Fraunhofer is one of the most active and prolific sources of patent applications in Germany. In 2013, its research institutions submitted a total of 733 innovation claims, of which 603 – or over 80 percent – resulted in new patent applications. This equates to an average of roughly two per working day. With annual license-fee revenues totaling 116 million euros, Fraunhofer remains at the forefront of international research institutions worldwide. Moreover, Fraunhofer was one of only three German organizations to be ranked among the “Top 100 Global Innovators” in 2013, an award presented by the Thomson Reuters media group on the basis of the number and quality of patented inventions.

Trusted provider of research and development services to customers around the globe

Fraunhofer’s research services are in demand around the world. In 2013, revenues from contracts with international partners totaled 250 million euros (excluding license fees), which represents a year-on-year increase of over seven percent.

The region with the highest growth rate was Asia, where Fraunhofer generated revenues of 29 million euros, up 19 percent on the previous year. But the most important international market is still Europe, where revenues increased by six percent to a total of 182 million euros. Of this sum, 90 million euros derived from contract research with partners in European countries outside of Germany, an increase of seven percent compared with 2012. Project funding from the EU Commission amounted to 92 million euros. Contract revenue in North and South America grew by almost eight percent to 38 million euros.

“Given the current level of contracts – and on condition that general economic trends remain stable – we expect our industrial revenue to increase marginally in 2014. We also anticipate a substantial increase in public-sector revenue from projects funded by the German federal and Länder governments and the European Commission. All in all, this will enable Fraunhofer to remain on its established growth trajectory in 2014,” said Professor Gossner.