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Business research spending reaches all-time high

German companies have broken previous R&D spending records, with expenditure topping €50 billion in 2011, according to the Stifterverband.

The Stifterverband, an association of German research sponsors, says the figure is 7.2 per cent higher than 2010. The number of scientists employed by businesses rose 3.7 per cent, to a total of 350,000 full-time staff.

The increase means that industry spending on R&D in Germany reached 1.94 per cent of GDP in 2011. This has occurred along with a substantial rise in public research spending. Together these expenditures amount to about 2.9 per cent of GDP, almost reaching the EU target of 3 per cent.

“Businesses know about the central role of innovation for the economy of Germany,” said Kurt Bock, the vice president of the Stifterverband and member of the board at pharma company BASF. “But we have to continue to go further, because others have already gone further than us.”

Bock called on the government to create tax breaks for business research, to incentivise spending in this area. In a statement issued by the Stifterverband, research minister Annette Schavan said she would look into the proposal.

The Stifterverband’s dataset, which is drawn up annually, showed that Germany’s car manufacturing industry is the biggest research spender, with €15.8bn in 2011 alone. However, the Stifterverband noticed a 4 per cent drop in research spending by energy companies.

The Stifterverband predicts a more cautious outlook for 2012, with an expected increase in business R&D spending of only 1.9 per cent. But it forecasts spending will increase 3.6 per cent in 2013.

“Businesses are continuing to be careful, because the development of markets and the situation of the eurozone are hard to estimate,” said Gero Stenke, the Stifterverband’s head of statistics.

However, previous R&D spending forecasts have regularly proved too conservative.