Contract research: Revenue and budgeted expenditure 2013–2017

Accounting for about 90 percent of business volume, contract research is the mainstay of the Fraunhofer-Gesellschaft’s business activities. In accordance with the organization’s mission statement, contract research includes research conducted on behalf of industrial and service enterprises, publicly funded projects and pre-competitive research financed with base funding. Base funding for the contract research segment is provided by the BMBF and the state governments in a ratio of 90 : 10. New project groups and research institutions generally receive initial funding from their host state during their first five years.

Budgeted expenditure for the contract research segment grew by 6 percent year over year to reach €1992 million in 2017. Of that total, the operating budget accounted for €1832 million, up 5 percent, and current capital expenditure for €160 million, up 24 percent. In line with Fraunhofer’s funding model, two-thirds of budgeted expenditure is financed through project revenue, which rose at a similar rate to budgeted expenditure (up 6 percent), reaching €1466 million. Fraunhofer was able to post substantial increases in both contract research and public-sector projects as sources of project revenue.

Revenue from the EU was the only source of funds to record a steep decline in 2017. The reason for this decrease was that, for the first time, the funds stemmed mainly from the Horizon 2020 framework programme launched in 2014, and the annual budget set at the start of this programme was considerably lower than that of the previous framework programme. Nevertheless, Fraunhofer remains the third most successful organization in Europe when it comes to securing EU project funding – beaten only by CNRS of France and the Helmholtz Association, both much larger institutions.

Industrial revenue thus rose by 4 percent overall to €711 million. Revenue from industrial and service enterprises, which Fraunhofer succeeded in growing by 5 percent, accounted for €568 million of the total. At €143 million, license-fee revenue matched the high figure of the previous year. 

Revenue from project funding granted by the federal and state governments grew 10 percent, coming in at €537 million. This increase was due entirely to project funding from the German Federal Ministry of Education and Research (BMBF) and the German Federal Ministry of Economics and Energy (BMWi).