Research budgets need to be increased in Germany

There are two major issues which absorb the attention of participants of the “Intelligenter Produzieren – Renaissance der industriellen Produktion” congress organized by the German Association for Mechanical and Plant Engineering (VDMA) which comes to an end today. These two major topics in question are research budgets and the recession. In the opinion of the VDMA president, Dr. Ing. Manfred Wittenstein, research budgets in Germany are completely inadequate, if Germany wants to remain the world’s most attractive industrial site in future. A lively discussion on the current recession was also led and fed by findings of a recent survey carried out by the VDMA.

One third of all jobs in Germany depend on production. Therefore, a budget of 72 million Euros for research on production provided by the Federal Ministry for research is by far not sufficient, was the critical comment by Mr. Wittenstein on the actions by the German government. Mr. Wittenstein demanded that industrial common research be strengthened and research be facilitated through fiscal stimuli in Germany. Taking into account the period between 1981 and 2006 it turned out that businesses in Germany increased their spending on research by 367 % over this period, whereas the research commitment by the German government grew by just 89 % over that period of time. Over this same period of time the financial contribution by the state to private research and development was dramatically reduced from 16.9 to 4.5 percent. In competing countries such as the USA this share amounts to more than 10 %.

However, small budgets for research are not the only important issue. Another big concern is German mechanical engineering which is in the very middle of a recession. Despite some promising early indicators, e.g. some positive signals from China, a real recovery is currently not in sight yet.

Capacity utilisation is currently at 72% according to VDMA. The number of employees in this branch of industry fell by 13,000 people in the period from January to April this year. Another 158,000 people worked short in March.

The most important question in all businesses is the output and turnover levels they can expect in the medium term and the consequences for their production capacities. This is the main finding of a VDMA survey carried out at the beginning of June among member companies.

One third of the 390 businesses which took part in this survey said that they want to use the current crisis for the strategic recruitment of specialists. In medium-sized entities employing between 100 and 250 people and in businesses with over 500 staff this percentage even amounts to 40 %. 16 % of responding businesses even expect the number of their own engineer staff to increase. More than three quarters believe that the number of engineers is going to remain unchanged and just 8 % expect this number to fall. 54 % of mechanical engineering businesses in Germany, however, expect the general number of staff in their companies to be cut.

41 % of businesses plan to take over most of their apprentices and 20% even all of them. 73 % of businesses want to keep the number of apprenticeship posts unchanged in the next year. GERMAN