Published 12 June 2015

The interplay between innovation and trade promotion

– Germany at home and in the field

The responsibility for the German trade and innovation promotion is divided between a large number of actors on federal level and on “bundesländer” level.

The decentralized German model, with many actors in the promotion system, means a large part of the promotion is carried out at other levels, and by other actors, than by the federal government.

Some key stakeholders in this context is the German International Chambers of Commerce (AHK), the German research institutes for example Fraunhofer and Max Planck, universities, and regions which largely follow “their” companies and seek know-ledge abroad for its research. The German government sees this as an advantage, in that the system is flexible and tailored for what business and science needs.

However, there is a link between trade promotion and international research and innovation cooperation. In the strategies and action plans for research and innovation a central point is that partnerships should be prioritized in areas where German companies have a comparative advantage and where they can benefit from being linked to leading international research and innovation. Strategies and action plans have parallel objectives – both an outward (to promote German foreign trade and spread German innovations and standards in the world) and an inward (transfer knowledge to German scientists and companies). These efforts seem to act together and reinforce each other. In this context it can be mentioned that India has made substantial investments in the German research infrastructure, EUR 30 million was invested in the FAIR project (Facility for Antiproton and Ion Research) in Darmstadt, Germany.

The interplay between innovation and trade is governed by the Ministry of Research and Education (BMBF). BMBF has during the past decade developed and updated two key strategies (High-Tech Strategie für Deutschland and Strategie der Bundesregierung zur Internationalisierung von Wissenschaft und Forschung) and developed an action plan for international cooperation. The high-tech strategy involves all ministries and agencies at all levels; national, regional, and local. The strategy makes the connection between innovation and trade with various promotion deals for cluster organizations and individual companies. The focus is “der deutsche Mittelstand”, medium-sized companies, and to encourage them to participate in international networks in order to develop their innovations. The strategy also aims to establish German norms and standards internationally which is done through close collaboration with the country’s embassies.

The federal promotion activities are organized in a number of different ways. BMBF is the central player in promoting the internationalization of German innovation. This is done through bilateral dialogues and agreements or through the establishment of institutes and knowledge centres abroad. One example of this is the German Centres for Science and Innovation (DWIH), which is an initiative driven by the BMBF, the German Foreign Ministry and the German organization for academic exchange. There are six of these centres located in New York, Tokyo, São Paolo, New Delhi, Cairo and Moscow. One of the centres’ tasks is to bring about cooperation between German and foreign organizations and companies. iMove, another example of the connection between research and export, is a program in which BMBF promotes exports of German vocational training. This benefits German training companies, but also works as a marketing strategy for the high-tech industry in Germany. Vocational training is for example an area of high priority to the Indian government with several MoU’s signed between the countries.

The Ministry of Economy and Energy (BMWi) has a more export-emphazised focus and provides general information regarding export credits, international trade fairs, laws and regulations for trade, as well as the opportunities for support for exporting. The BMWi website is also a portal which brings together Germany’s various actors working to promote trade (about 70 organizations). Moreover, BMWi funds German Trade and Invest (GTAI) which has 50 offices and approximately 60 representatives abroad. GTAI is focused on the analysis of new development in technology, market, and policy, particularly with German small and medium-sized businesses as stakeholders.

Germany abroad

Promotion in Japan is clearly divided between national actors and interest-driven organizations from German institutes, industries and states. The independent organizations often have their own offices in the country. Japan is not a prioritized country of the German Government regarding cooperation in science and innovation, but collaboration is very much alive through institutes such as Fraunhofer and Max Planck. An example of innovation cooperation is the annual German Innovation Award, which stimulates cooperation between German industry and Japanese research. The prize is coordinated by German Research and Innovation Forum, and is a showcase for German businesses in research and innovation in Japan.

The German trade promotion in South Korea rests on three pillars: Germany Trade and Invest which early captures new trends, the local Korean-German Chamber of Commerce which helps German companies to take advantage of these trends, and the embassy, including the science and technology office, which monitors trade barriers and works for exchanges in research, development and education. The focus areas for Germany in South Korea are automotive, chemicals, machinery, medical equipment and construction. The embassy’s science department has since 2010 worked together with several German universities creating conferences to present German research. In 2013 more than 600 people from both public and private organizations attended. The conference acts as a catalyst for partnerships, and is one of the best opportunities for German researchers to find partners in South Korea. This approach is in line with the goals of the federal strategy.

In China, an annual dialogue concerning trade and innovation with Germany is held at the highest political level. The strategy for cooperation is shaped in direct dialogue with the Chinese government and affects the direction of promotion. For example, partnerships with the Chinese Ministry of Science and Technology (MoST) are set up in such areas as innovation policy, life sciences and water treatment. Strategic cooperation on vocational training and higher education is set up with China’s Ministry of Education (MoE). The federal actor responsible for the promotion and coordination of science, education and innovation is the Office of Science at the embassy. German Centres for Industry and Trade (DIHZ) are located in Beijing and Shanghai. DIHZ is a hub for various German organizations in China such as businesses and support functions, for instance AHK. DIHZ also provides opportunities for German small and medium-sized enterprises to lease office space.

Germany is an important partner for India in engineering and science, and has several collaborations established. The research policy cooperation between the countries has been institutionalized through the Indo-German Science and Technology Centre (IGSTC) intended to promote industrial research. Both countries contribute two million euros each year for the centre’s projects which are exclusively partnerships between private and public actors. So far, 14 projects received funding. The Centre aims to involve small and medium-sized enterprises in the research projects. A German House of Research and Innovation (DWIH) is located in India which brings together 15 German scientific and research bodies, including several universities and institutes. Germany’s extensive educational and research cooperation towards India plays an important role ensuring the German industries skill supply. It is estimated that over 1,000 Indian PhD students are being educated in Germany. Germany also has a comprehensive aid and development policy towards India of more than one billion euros per year. The development policy is an important instrument and an opportunity for Germany to bring together trade and research policy conducted in India, as for example in a project on renewable energy in the state of Tamil Nadu where the German KfW Development Bank collaborated with German companies in the implementation.

Brazil is as prioritized country in the German high-tech strategy. For trade and export promotion a number of areas are defined; energy and climate issues, digitization and industry development (Industry 4.0), security, innovative industry and support for small and medium-sized enterprises to establish in Brazil. However, there is a limited public representation at the embassy regarding these issues. The Chamber of Commerce (AHK) in São Paulo, with its more than 1000 members, is the hub for the German trade and innovation efforts in Brazil particularly by the German House of Research and Innovation (DWIH) which is coordinated by AHK.

Germany has launched a number of initiatives to address the fragmented promotion work in the United States. The German Centre for Research and Innovation (DWIH) creates a physical location where different actors come together. Another initiative is the biannual roundtable on research and innovation between German stakeholders, with the ambition to get a more comprehensive picture of Germany’s engagement in the United States, and coordinate the German offer. German Accelerator is a third initiative that focuses on up scaling businesses and finally the work on the “Internet of Everything”, an initiative where the German Ambassador brings together American and German actors to a dialogue. This dialogue gathers eleven of Germany’s top software companies in talks on unmanned vehicles, robotics and digitization of manufacturing. This is an example of how the priority areas of research and trade in the high-tech strategy are brought together, in line with the strategies at home.


Title
The interplay between innovation and trade promotion – Germany at home and in the field

Serial number
Direct response 2015:10

Reference number
2015/033

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