Contract research: Revenue and budgeted expenditure 2014–2018

Accounting for about 85 percent of business volume, contract research is the mainstay of Fraunhofer’s business activities. In accordance with the organization’s mission statement, contract research includes research conducted on behalf of industrial enterprises, publicly funded projects and pre-competitive research financed with base funding. Base funding 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 9 percent year over year to reach €2168 million in 2018. Of that total, the operating budget accounted for €1988 million, up 9 percent, and current capital expenditure for €180 million, up 13 percent. Growth was mainly financed through base funding. The funding requirement rose by 30 percent to €682 million. Fraunhofer uses this to implement important initiatives, such as the establishment of Fraunhofer Clusters of Excellence, new lighthouse projects and Key Strategic Initiatives.

In line with Fraunhofer’s funding model, two-thirds of contract research is financed through project revenue, which totaled €1486 million in 2018. Industrial revenue rose by 2 percent to €723 million. Of that sum, revenue from contracts with industry increased significantly, rising by 8 percent to €614 million. At €109 million, license-fee revenue, by contrast, was lower than the previous year’s figure due to expired contracts. Revenue from project funding granted by the federal and state governments grew by 1 percent to €545 million. Of this sum, €395 million came from the federal government and €150 million from the state governments.