“International exchange of knowledge”
Economist Heike Belitz explains why German companies’ research investments abroad can benefit all concerned.
German companies invest billions in research and development at sites abroad, too. Economist Dr Heike Belitz of the German Institute for Economic Research in Berlin explains what research is being done abroad and why both sides benefit from it.
Ms Belitz, how much money from Germany goes into research abroad?
The scale of research and development operations pursued by German companies abroad can only be roughly estimated. There are no exact statistics. But my guess is that expenditure abroad is slightly on the rise. The top 100 German companies spent at least 90 billion euros on research worldwide in 2021. Some 65 billion euros of this went into domestic research and development, so more than 25 billion was spent in other countries. This means that about 30 per cent of research expenditure goes abroad.
What is this research focused on?
We know that the big multinationals generally do research very close to the market. The share of basic research is low – in fact it’s declining slightly. The main focus is on development. Our investigations revealed that the companies predominantly conduct research abroad in areas in which they’re heavily involved in research in Germany, too. If the foreign site specialises in these fields as well, this is known as supplementary research. About 50 per cent of patent-related research by German companies abroad can be described as supplementary research of this kind.
Who benefits from this?
This research and development in other countries gives rise to an international exchange of knowledge. It results in an expansion of know-how within the corporation, enabling the knowledge to be used at other sites, too. There are often links with local universities and research institutions – which is where the staff come from. This creates an international or even global research network that will typically benefit all concerned.