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The paper deals with the effects of publicly funded research at universities, polytechnics and federal and state financed research labs on industrial innovations in Germany. In order to understand the current state of public research institutions in Germany, chapter two shortly describes its historical context, characterized by the traditional Central European view of natural science as a value in itself, the inertia of public institutions and tensions between federal and state responsibility for science policy.In the third chapter we will deal with the following question: Are innovating companies able to identify the contribution of public research to industrial innovations and trace the source of these innovations? In a postal questionnaire, 2,300 companies were asked whether they had introduced innovations between 1993 and 1995 that would not have been developed without public research. Less than one tenth of product or process innovating firms said that they had introduced public-research-based innovations. The public-research-based products account for approximately 5% of all sales with new products. Even more important are the differences in the effectiveness of technology transfer between different types of public research institutions. Universities are cited by firms with publicly supported innovations as the most important source, although publicly financed labs get almost as much citations. When firms were asked to name the most important public institutes, they most frequently cited the institutes of the Fraunhofer-Society. It seems obvious that their technology transfer is spurred by the higher share of research funds from industry. Big science labs are almost invisible, suggesting that their technology transfer to industrial firms still lacks effectiveness.One of the basic findings is that a considerable share of companies can indeed identify product and process innovations which they would not have developed in the absence of recent research of public institutions. The results are similar to the findings of Mansfield (1991) for the U.S. On the side of the firms, we find that German firms with R&D activities are more likely to profit from public research. Private and public research thus complement each other. Proximity may not have the same importance in Germany than in other countries, especially the U.S. The thesis that proximity is important especially for high-tech or R&D-intensive industries is clearly rejected in the case of Germany. Although firms tend to cite research institutions that are located in their local area, firms which are closer to the public research have no higher propensity to receive public research spillover. Contrary to the widely held opinion that proximity to public research institution does promote collaboration between firms and public research institutions and increases the amount of received knowledge spillovers. Firms with a high R&D intensity cite remote public research institutes more frequently than less R&D intensive firms, suggesting that in Germany high-tech d...

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This paper presents an approach to assessing the potential of countries to increase the likelihood that locally preferred innovation designs become successful in other countries, too. The concept suggests that for many innovations lead markets exist that initiate the international diffusion of a specific design of an innovation. Once a specific innovation design has been adopted by users in the lead market chances are that it subsequently becomes adopted by users in other countries as well. Lead markets can be utilised for the development of global innovation designs. By focusing on the design of the innovation which responds to the preferences within the lead market, a company can leverage the success experienced in the lead market for global market launch. In order to follow a lead market strategy of new product development, it is necessary to assess the lead market potential of countries before an innovation is developed and tested in the market. This paper presents an indicator-based methodology that approximates the lead market attributes of countries. This assessment methodology was applied to two innovation projects at the truck division of DaimlerChrysler AG. The method produces information that is of importance for the development phase and the market launch of globally standardised innovations.

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