Young businesses driving research, finds German study
New figures from Germany illustrate the extent of the contribution that new businesses make to research. A study by the Centre for European Economic Research, commissioned by the German Ministry for Education and Research, has shown that almost one third of new businesses (younger than six years old) are conducting continuous research, whereas only one fifth of older enterprises are doing the same. The study covered the period 1998 to 2003. The study found that whether or not a business invests continuously in research depends on the reason for the founding of the company. Of those businesses that are set up in order to conduct some initial research, 70 per cent are still involved in research five years later. It is a different story for those businesses that are not created with research in mind, as one may expect. Of those that conduct no research in their first year, only ten per cent do so in the second year. 'Lots of start-ups focus more in the first years on research and development in order to develop new products. Later, production and marketing become more important,' states the German ministry. It also appears that new businesses are conducting more research now than previously. Whilst in 1998 some 35 per cent of new businesses were investing in R&D, this figure had grown to 42 per cent by 2002. 'Without the dynamic development of R&D [research and development] investment among young businesses, the proportion of businesses carrying out research in Germany in the last five years would have fallen,' says the ministry. It is therefore likely to support the study's conclusion that supporting the growth of innovative enterprises is an imperative part of innovation policies. Another priority must be to create the conditions in which new businesses can partake in research from the outset.
Countries
Germany