The long road to sustainable success
Today, 60 years after its founding, Fraunhofer is characterized by undiminished vitality. The Gesellschaft zur Förderung der angewandten Forschung, or Society for the Promotion of Applied Research, was founded in the Bavarian ministry of the economy on March 26, 1949. After the destruction caused by the war, the idea was to develop new structures for research and to spur reconstruction of the economy. But it was not easy for the young organization: treated with hostility by representatives of other scientific organizations, the Fraunhofer-Gesellschaft had to fight hard during the first years for its right to exist. Applied research was seen as unscientific and was frowned upon as an Americanization of the science system. It additionally had to fight the bad image it had acquired as a result of having been appropriated by the politicians and military during the time of National Socialism. The awarding of funds from the European Recovery Program, a job that was given to Fraunhofer by the German federal ministry of the economy, provided a certain stability, because a large portion of this funding was intended to be used for the promotion of application-oriented research. But a good five years after its founding, the Fraunhofer-Gesellschaft was facing its end, “when it was not able to complete the nationally important task that the Stifterverband innovation agency and the DFG (German Research Foundation) had in mind for it: setting up a placement office for contract research,” Prof. Helmuth Trischler reports in his essay “The Fraunhofer-Gesellschaft in the German Innovation System”. Help came from the Land of Baden-Württemberg, which at that time was starting to expand its position in applied research. The Land government supported Fraunhofer financially, as well as in the founding of its own research institutes. The Gesellschaft received a further boost from a cooperation agreement with the German federal ministry of defense (BMVg). This cooperation agreement was born of necessity for both sides. The Fraunhofer-Gesellschaft needed steady income and a stable network in the federal ministries and German innovation system in order to ensure its survival. The BMVg financed four defense-related research institutes, and so made it possible for Fraunhofer to forge ahead with the founding of its own civilian institutes. The goal was for it to establish itself as a facility for contract research, against all expectations. The Gesellschaft consolidated in this form over the course of the next ten years. But its reputation at that time was anything but good; it was labeled by the public as a secret military research body and called “scavengers” by the scientific community, and had a very disorderly mixture of institutes that only partially carried out the job of research with close ties to the economy. But fundamental changes began for the Fraunhofer-Gesellschaft at the end of the 1960's; the basis was a recommendation from the German Council of Science and Humanities “to expand Fraunhofer, as planned, into that sponsor organization for applied research that was still missing in the national innovation system,” Prof. Trischler explains in his essay. Across the course of a number of years, a joint commission from the German federal ministry of science and Fraunhofer-Gesellschaft developed new structures for Fraunhofer's work. With the “Fraunhofer model” for performance-based basic financing, completely new approaches were developed for research funding. The spiritual fathers of the “new” Fraunhofer-Gesellschaft were Prof. Max Syrbe, at that time director of the Fraunhofer Institute for Information and Data Processing in Technology and Biology and later president of the Fraunhofer-Gesellschaft, Prof. Helmar Krupp, who was director of the Fraunhofer Institute for Systems and Innovation Research, which was founded in 1972, and Klaus Schroeter, at that time the newly appointed planning officer at the central office. With their concept, they laid the foundation for Fraunhofer as a “multidisciplinary contract research organization, which was intended to provide the state with flexible research potential while simultaneously ensuring a transfer of technological knowledge by means of contract-based research for industry,” Trischler writes. “Within a few years, Fraunhofer developed from a much-criticized scavenger into the hope of the German innovation system”. As steady as the success since the 1970's may superficially appear to be, in the following decades Fraunhofer had to rise to difficult challenges; precisely because the Gesellschaft and its institutes were able to establish themselves as the hope and driving force for innovation in the economy, the political desire to promote weaker regions by settling Fraunhofer institutes as the nucleus for economic growth grew. Fraunhofer’s research strategy plans did not always match the regional political goals. Added to this was the demand for further increases in the earnings for the economy, which were to compensate for the weaknesses in public funding. The 1990's progressed against the background of German reunification, and this was true for the Fraunhofer-Gesellschaft as well. When the Berlin Wall fell in 1989, the Fraunhofer-Gesellschaft immediately strengthened its scientific and personal contacts with colleagues in the disintegrating German Democratic Republic. The diverse relationships that were already in place with the eastern institutes and individual researchers now proved to be extraordinarily helpful. The official restructuring process began in the former East German Länder in 1990, with the goal of a unified research community in Germany. This called for quick action; East Germany's economic decline meant that the process for unifying the two German states had to proceed rapidly, leaving no time for tedious systematic studies by either side. With dedication and courage unmatched in any other research organization, the Fraunhofer-Gesellschaft already dared to take in 19 institutes and facilities in the former East Germany in 1991 – a colossal show of strength by all those involved, both in the east and west. Professor Max Syrbe, president of the Fraunhofer-Gesellschaft at the time, supported this step with great personal commitment. Thanks to generous start-up funding from the German federal ministry of research and special financing from the German Länder, it was quickly possible to create competitive framework conditions and a powerful infrastructure for the eastern institutes. They were included in the group of Fraunhofer institutes and integrated amazingly rapidly. Here again, the method of largely focusing on the existing potential and acquiring western institutes as partners, advisers and mentors, paid off. It took only a few years for these institutes to establish themselves. Since then, an additional ten institutes have been added in the former East German Länder. All are working successfully and enjoying sustained growth. One milestone in Fraunhofer’s changeable history was the system evaluation. In 1996, the heads of the federal and Länder governments had decided to evaluate all jointly funded research institutes. The Fraunhofer-Gesellschaft was the first organization to come under scrutiny. The research ministry appointed an eight-member evaluation committee, primarily experts from industry. A fundamental aspect was the examination of the technology portfolio: a mirroring of the Fraunhofer-Gesellschaft technology fields in the global trend descriptions of the Delphi Study showed that Fraunhofer was covering the fundamental innovation fields in the top-selling markets in the medium term. In the long term, the committee recommended that Fraunhofer involve itself “even more strongly in the communication technologies, materials sciences, and, particularly, in the life sciences.” Recommendations that were powerfully put into action in the following years. But the organization and structure were also scrutinized. The committee judged the decentralized structure, in which the institutes largely had powers of self-determination, to be fundamentally positive. The inter-institute structures, which were built up parallel to the decentralized structure and which allowed individual offers to be coordinated and aligned to market requirements, was also approved. However, the institutes' measures for “management clearly led more by strategy” with a periodic evaluation of the areas of expertise and business fields of the institutes and the institutes’ uniformly structured plans for strategy and the future did not go far enough for the committee. This deficit was offset by the introduction of a standardized strategy process at the institutes, and by the establishment of the Presidential Council, an advisory committee in which the group chairs discuss current research policy topics with the executive board. In summary, the report established that “With its clear mission, the Fraunhofer-Gesellschaft is an indispensable element in the German research community.” Its success almost became a pitfall for Fraunhofer in the new millennium, when there was a merger with the Gesellschaft für Mathematik und Datenverarbeitung GMD, a large-scale research institute financed by the German federal government. This was because the job of consolidating eight institutes of basic research under the umbrella of applied research, with its very different financing requirements, was extremely painstaking. Thanks to the help of two outside mediators, Prof. Dr.-Ing. Tom Sommerlatte and Prof. Dr. Arnold Picot, many rounds of discussions, and the concerted efforts of the Fraunhofer Executive Board, it was possible to integrate the GMD institutes in a process that took a number of years. Persistence, an inquiring mind, and assertiveness, but also a healthy portion of defiance – these traits were necessary in order to prove that applied research can be successful. These are the characteristics that have distinguished Fraunhofer throughout the last 60 years – characteristics that secured the Gesellschaft’s survival in the difficult early years and made possible its journey to success.
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