Factsheet No.5 (July 2007)
By Muzinée Kistenfeger (mailto:email@example.com)
The Fraunhofer Society (FhG) is one of Germany’s
four non-university research organisations and focuses on applied
research. The current number of FhG institutes has increased to
56. They undertake contract research for the public sector, government,
and industry, including small and medium-sized enterprises (SMEs),
which lack the critical mass to carry out their own R&D. Members
of the institutes play an important role in the promotion of young
scientists through university teaching. The FhG also acts as an
adviser to government and industry on research-related issues,
particularly on the commercialisation of new technologies and innovation.
The Fraunhofer Society’s headquarters are based in Munich.
Professor Hans-Jörg Bullinger, the Society's President, also
chairs the Executive Board of the FhG. The Senate, which comprises
representatives from industry, science and government, sets research
priorities and determines the allocation of resources to the institutes
on the basis of advice from the Scientific and Technological Council
(WTR). Since April 2006, the FhG also has a Managing Director for
Research Planning, Dr. Ulrich Buller.
The Fraunhofer Institutes focus on eight priority areas:
- materials technology and component behaviour;
- production technology;
- information and communications technology;
- microelectronics and microsystems engineering;
- sensor systems and testing technologies;
- process engineering;
- energy and construction technology, environmental and health research;
- technical and economic studies and information transfer.
In order to maximise their potential, the FhG institutes form cooperative
alliances, thus jointly offering their services on the market.
Currently, there are seven
cooperative alliances, which also advise the Executive Board on structural
and business development within their research field. They are (figures for
- The Microelectronics Alliance is by now the largest strategic alliance
within the FhG (10 institutes, total budget 221 million Euro)
- The Materials and Components Alliance (12 institutes, total budget close
to 204 million Euro, a 5% increase over 2005)
- The Information and Communication Technology Alliance (the largest IT
research group in Europe composed of 16 institutes, with a total annual budget
168 million Euro )
- The Production Alliance (8 institutes, total budget ca.140 million Euro)
- The Surface Technology and Photonics Alliance (6 institutes, total budget
86 million Euro)
- The Life Sciences Alliance (5 institutes, total budget 57 million Euro,
almost 9% increase over 2005)
- The Defence and Security Alliance (6 institutes, 39 million Euro additional
funding from the Federal Ministry of Defence)
The FhG, formerly focusing mainly on engineering sciences, has
also developed research capacities in the area of life sciences.
Five of the Fraunhofer Institutes
pooled their biotechnological expertise in a “Life Science Alliance”.
They conduct research in the field of bio- and genetic engineering, medical
technology, pre-clinical and clinical research and environmental research and
protection. The goal of the alliance is to promote the industrial development
of biotechnology and thus link basic research and industry production. In June
2005, the Fraunhofer Centre for Molecular Biotechnology CMB in Newark, USA,
received a grant of $ 1,2 million from the Bill & Melinda Gates Foundation
for the development of a vaccine against the African Trypanosomiasis (sleep
In terms of research strategy, the Fraunhofer Society is directing its efforts
toward as-yet-undeveloped markets for products that might take over five years
to mature. In the area of nanotechnology, the FhG institutes focus their research
on nano-scale materials, nanophotonics, and nano-analytics. The Fraunhofer
Centre Nanoelectronic Technologies CNT in Dresden is member of a newly established
research platform for nanoelectronics, which received € 232.5 million
of public funding from the European Commission. Other priority areas of research
are mobility and energy technologies. Since 2003, the FhG started playing a
key role in an initiative of the German Federal Government to promote innovation.
FhG experts selected and made public a series of twelve leading-edge technologies
assessed as having a good future market potential. They also pinpointed areas
of activity meant to facilitate innovation and the quick translation of ideas
into high-quality products.
The Fraunhofer Society’s 2006 budget was 1,186 million Euro (£1=€1.45),
67 million less than in 2005. The Fraunhofer Society has three main sources
- Institutional funding provided by
the federal and states (Länder) governments
on a 90:10 basis, (a total of € 330 million in 2006 plus an additional € 39
million from the Federal Ministry of Defence. )
- Public-sector project grants from
federal and states sources and the EU (€ 303
million, an increase of € 14 million over 2005. EU projects accounted
for € 51 million)
- Industry funding from contract research
(some € 399 million in 2006.
Industry research provides close to 39% of the FhG total income).
- Others (investments, assets etc. €115
Close to two thirds of the FhG’s annual budget of over € 1,186 million
is covered by contract research carried out on behalf of industry, the state
and public institutions. Public-sector project grants have only marginally
increased in 2006 (some 5%), a trend which, the FhG management believes, will
continue in 2007. Income from industry contracts however stagnated after a
hefty increase by 35% in 2005. This included the high revenue from the MP3
licence (ca. € 100 million in 2005). The budget difference for 2006 is
due to the decrease of this MP3 licence-related income. The Fraunhofer Society
employs 12,775 staff.
Fraunhofer Institutes focus on applied research and development
but an amount of strategic and precompetitive research is also
undertaken. Research is usually
conducted in the form of projects funded from public-sector grants or by industry,
mainly SMEs. The latter include customer-specific solutions to companies’ problems,
for instance the adaptation of specific processes or technologies in accordance
with company requirements. With an annual staff fluctuation rate of 10%, the
Fraunhofer Society continuously transfers technologies and expertise into industry.
The FhG has introduced three mechanisms to promote the transfer of research
into industrial applications:
- Application Centres (Anwendungszentren) are based at individual institutes
and form a platform for contract research for the specific needs of industry.
- Innovation Centres (Innovationszentren)
seek to bridge the gap between applied R&D and the introduction
of new products on the market. An innovation centre located
in Bavaria specialises in telecommunications engineering.
- Demonstration Centres (Demonstrationszentren)
combine the expertise of several Fraunhofer Institutes to improve
the R&D infrastructure in priority areas.
These centres also provide training opportunities and consultancy services
In 2006, the Fraunhofer Society raised its total number of active
German patents to 2211. Most of them come from the engineering
and microtechnology areas.
The FhG also restructured its central patent and licensing agency (PST, Fraunhofer
Patentstelle). The department devoted to advising and supporting the Fraunhofer
Institutes was moved to the FhG headquarters. The remaining PST has an annual
budget of close to € 3 million, less than 30 staff and now offers "patent
services for the German research". Ca. 50 % of the budget is own revenue
from licensing, projects and consultancy activities. The PST is mainly responsible
for providing consultancy on patent issues to SMEs, universities and non-university
In 2006, the FhG reported € 92 million of license revenue.
The most successful license of the FhG is the MP3 licence. Alone,
it generated € 69 million of revenue in 2006 (down from € 100
million in 2005). The Society now decided to set up a Fraunhofer
Foundation in order to manage this revenue. Its role will be to
fund patent-oriented research projects in order to ensure future
competitiveness and support the institutes in setting new trends
of innovative research.
Over 300 companies have been spun off from the Fraunhofer Society
since the early nineties, mainly in such areas as information technology,
life sciences, material research and environmental engineering.
The Fraunhofer Venture Group was established in 1999 to support
spin-offs by providing counselling on start-up funding and business
plan design. It also offers access to a network of consultants,
venture capitalists and banks. The Fraunhofer Venture Group takes
out partnerships, usually by providing technology licences. To
a limited extent, it also provides seed capital. In 2006, the Venture
Group took forward 38 projects and achieved six spin-offs.
The FhG also experiments with a new strategy: the spin-ins. The
FhG Institute for Ceramic Technologies and Systems in Dresden for
example, developed an innovative ceramic SOFC (fuel cell). Two
industrial companies have now set up a joint new company within
the Institute, Staxera, which will help drive the new product toward
serial production. Staxera integrates staff from the FhG and is
100% financed by the project partners.
The FhG’s revenue from international projects increased
in 2006 to € 120 million. EU-funded projects generated € 51
million in 2006 (an increase by 22% over 2005). Revenue from non-EU
European research projects was of € 42.2 million. The Fraunhofer
Society has a US subsidiary, Fraunhofer USA, which operates research
centres from five locations. They focus on laser technology and
laser applications, biomedical engineering, production technology,
manufacturing innovation and software engineering. The centres
aim to transfer local expertise into the Fraunhofer Society and
to increase its customer base overseas. Fraunhofer USA had a rather
constant revenue of ca. € 10-13 million per annum during the
last three years. The FhG has also established five Representative
Offices in South East Asia focusing on marketing and business expansion.
Further Fraunhofer Representative Offices opened in Brussels and
in Moscow. The FhG and its Brussels office were involved in the
development of the EU "Strategic Research Agenda", which
was used as a basis for defining the production technology area
In 2001, the Stuttgart-based Technology Development Group (TEG)
of the Fraunhofer Society initiated a partnership with the UK technology
development and commercialisation agency Pera. TEG and Pera completed
the first of 12 CRAFT (Cooperative Research Activity for Technology)
collaborative projects. In 2002, the TEG also became a partner
of PRIME-Faraday and opened its first UK office in Melton Mowbray.
Several FhG institutes are actively involved in the mechatronics
field of research and will join in the collaboration with UK universities,
SMEs and KTNs.
In order to promote networking and know-how
transfer, the FhG initiated a number of "innovation clusters", networks
built around one or several Fraunhofer institutes and involving
academic research partners and industrial companies, mostly SMEs.
The Fraunhofer Society and the federal and local state governments
jointly fund these networks. The first four clusters cover mechatronics
and machine engineering in Chemnitz, optic technologies in Jena,
digital production in Stuttgart, and medical technologies ("Personal
health") in Erlangen-Nueremberg. Three more clusters were
set up in 2006: "Nano for production" in Saxony, "Automotive
Quality" in the Saar and "Digital Automotive Technology" in
Another priority of the FhG in the next year is consolidating
the beginning cooperation with the prestigious Max Planck society
of basic research in order to better exploit synergies. In 2006,
the two societies have started three long-term jointly-funded cooperation
FhG Institutes generally offer university graduates training opportunities
in various technological areas. In 2006, the Fraunhofer Society
in cooperation with several universities set up a Technology Academy
offering master degrees in technology managing, logistic engineering,
and environmental sciences. It targets young academics, who have
worked at least 5 years in industry and have reached a managing
level. The Technology Academy offers courses as of September 2006.
English-language information on the
Fraunhofer Society with links to all institutes is available
on the Internet at http://www.fraunhofer.de.
The FhG publishes a number of English-language brochures, including
a guide to its research establishments and sectoral publications
on priority research areas. The Society also publishes a regular
newsletter “Research news” and a bilingual German/English
guide to its institutes on CD-ROM. The annual report 2006 is available
in German. Copies of these may be obtained via the Internet or
80686 Munich, Germany
Tel: +49 89 1205 0
Fax: +49 89 1205 7531
For information on the UK office of the Fraunhofer Technology
Development Group please contact:
Dipl. Ing. Harald Egner
Tel: +44 1664 503 780
Fax: +44 1664 501 589
Leicestershire, LE 13 0PB
Science & Innovation Section
British Consulate-General Munich
Tel: 0049 89 21109 112
Fax: 0049 89 21109 166