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Wealth of invention

Economic hiccups aside, Germany's knack for turning ideas into commercial triumphs looks unstoppable. Nicola Jones reports

WHEN it comes to translating basic research into industrial success, few nations can match Germany. Since the 1940s, the nation鈥檚 vast industrial base has been fed with a constant stream of new ideas and expertise from science. And though German prosperity has faltered over the past decade because of the huge cost of unifying east and west as well as the global economic downturn, it still has an enviable record for turning ideas into profit.

Much of the reason for that success is the Fraunhofer Society, a network of research institutes that exists solely to solve industrial problems and create sought-after technologies. The organisation has created everything from commercially important lasers for cutting out car parts to the popular music format MP3. But today the Fraunhofer institutes have competition. Universities are taking an ever larger role in technology transfer, and technology parks are springing up all over. These efforts are being complemented by the federal programmes for pumping money into start-up companies.

Such a strategy may sound like a recipe for economic success, but it is not without its critics. These people worry that favouring applied research will mean neglecting basic science, eventually starving industry of fresh ideas. If every scientist starts thinking like an entrepreneur, the argument goes, then the traditional principles of university research being curiosity-driven, free and widely available will suffer. Others claim that many of the programmes to promote technology transfer are a waste of money because half the small businesses that are promoted are bound to go belly-up within a few years.

While this debate continues, new ideas flow at a steady rate from Germany鈥檚 complex assortment of research networks, which bear famous names such as Helmholtz, Max Planck and Leibniz (see 鈥淕ermany鈥檚 research jungle鈥). Yet it is the fourth network, the Fraunhofer Society, that plays the greatest role in technology transfer.

Founded in 1949, the Fraunhofer Society is now Europe鈥檚 largest organisation for applied technology, and has 59 institutes employing 12,000 people. And it continues to grow. In 2001, it swallowed up the GMD National Research Centre for Information Technology, which is made up of eight institutes in Bonn, Darmstadt and Berlin. Last year the Fraunhofer gobbled up the Heinrich Hertz Institute for Communication Technology in Berlin. Today, there are even Fraunhofers in the US and Asia.

The centres are proving grounds for the young researchers who feed academia and industry. 鈥淕ermany is fantastic at giving students practical experience, especially in engineering,鈥 says Axel Bauer of the Fraunhofer Institute for Laser Technology in Aachen. Many students use the Fraunhofers as springboards into industry, while many established researchers at Fraunhofers also hold positions at universities.

Only 20 per cent of the Fraunhofer Society鈥檚 鈧900 million annual budget comes direct from government. The institutes have to compete for contracts to supply the remainder. Commissions come from small companies that can鈥檛 afford to do their own research, big ones that appreciate the specialist knowledge and equipment of the Fraunhofers, and from the state and federal governments too.

Some Fraunhofers have seeded clusters of companies around them. In Stuttgart, five Fraunhofers service the thriving car and construction industries in the area. In Freiburg, just down the road from the sunniest spot in Germany, sits the Fraunhofer Institute for Solar Energy Systems, Europe鈥檚 biggest solar research institute. It pioneers work in photovoltaics, miniature fuel cells and environmentally friendly buildings. Meanwhile Aachen, while best known for equestrian competitions, has become the country鈥檚 centre for laser technology (see 鈥淟aser city鈥).

You can see the Fraunhofer鈥檚 success in the number of patents it gets 鈥 449 last year. That put it 27th in the list of Europe鈥檚 top patent winners, and it鈥檚 the only 鈥渟ociety鈥 among giant companies such as Siemens and Volkswagen. But if the Fraunhofer Society is Germany鈥檚 best-known route for converting blue-sky ideas into practical products, it is not the only one. The Max Planck institutes, for example, which are famous for basic research, have their own conduit to industry, called Garching Innovation. Founded in 1970 and based in Munich, the organisation now manages about 100 patents a year. Researchers who worked in Max Planck institutes before moving to industry, such as Peter Pack, CEO of the Heidelberg-based biotech company Molecular Tools in Medicine (MTM), say Garching Innovation is 鈥渇antastic鈥 at what it does.

The universities too are getting in on the act of technology transfer, though praise for their systems is not so forthcoming. It used to be that university staff who invented novel technologies had sole claim to any patents. That changed in February 2002.

Now inventors have to offer their ideas to the universities first, which have four months to decide whether to take the invention on. If they do, they get patent rights and 70 per cent of any income. Universities have begun opening up offices to deal with this new aspect of their job, but they have a long way to go. 鈥淭echnology transfer at the universities is immature. You go to the tech transfer office with a patent idea and they don鈥檛 know what to do,鈥 says Magnus von Knebel Doeberitz, joint founder of MTM and LION Bioscience, one of Europe鈥檚 biggest biotech success stories.

Fortunately they鈥檒l have the help of one of Germany鈥檚 most experienced patent offices 鈥 the Fraunhofer Society鈥檚 Patent Centre for German Research (PST). This February the PST announced it will be taking a more active role in the 鈥渢echnology alliance鈥, which links a variety of organisations from patent lawyers to universities. The PST will help university offices to assess the novelty of their inventions and potential markets, and negotiate contracts with industry. The PST already has one such project for Bavarian universities. Now it is opening up nationwide programmes for university clinical and engineering patents.

For now it is unclear how university tech transfer programmes will develop. One problem is that they are funded for only a few years by federal government, after which they are supposed to make a profit, says J枚rn Erselius, licensing manager for Garching Innovation. 鈥淭hat鈥檚 extremely unlikely, unless they鈥檙e very lucky,鈥 he argues.

But while universities look at cashing in on their academics鈥 ideas, some researchers argue that universities shouldn鈥檛 get involved with technology transfer at all. 鈥淎 lot of them believe that鈥檚 what the Fraunhofers are for, and that getting the universities involved is somehow immoral,鈥 says Pack. 鈥淚t鈥檚 still a big debate.鈥

Researchers such as Ulrich Platt, director of the environmental physics department at the University of Heidelberg, wouldn鈥檛 go so far as to say that business has no place in the university. But he does think that all these technology transfer offices are symptomatic of a bigger problem 鈥 that Germany has become too focused on applied science. 鈥淲e鈥檝e stopped producing new knowledge 鈥 we鈥檙e just mining it,鈥 Platt says.

That has inevitably deprived basic research of some funding. While that鈥檚 a common complaint in most countries, many believe the situation is worse in Germany. 鈥淭he input into research in Germany is not sufficient at this stage,鈥 says Harald zur Hausen, vice president of the Helmholtz Association of National Research Centres. 鈥淏oth the US and Japan increase funding into basic research in these hard economic times. Germany does the opposite.鈥

In recent years, funding per researcher for cancer research has gone up four times as much in the US as in Germany, zur Hausen says. The federal government says funding is going up, but that it is being eaten up by things like salary increases.

Frank Florian, a spokesperson for the federal ministry of education and research (the BMBF), which sets the national science agenda and distributes federal funds, seems to confirm this emphasis on applied science. 鈥淭he most important projects we have promoted in the last four years are things that are of practical use to people,鈥 he says 鈥 projects that emphasise health rather than space technology, for example.

The ministry is also keen to promote the formation of new companies that pursue practical, applied science. That happens through programmes such as BioChance, a 鈧50 million project that has launched 52 companies in the past three years. The BMBF says this scheme and others will keep Germany ahead in the worlds of biotech and high-tech, and provide jobs for smart researchers to stop them heading off to the US and elsewhere. Eventually, it will also deliver a badly needed fillip to the German economy.

The government has supported links between science and industry in other ways too. In the mid-1990s the BMBF launched a DM150 million ($100 million) competition to designate three areas as biotechnology hot spots. Universities, companies and research institutes madly scrambled to forge links and prove their worth as a 鈥渂ioregion鈥 in an effort to win part of the pot. That project ended in 2002, but the winning bioregions 鈥 Munich, Rhineland, and the Rhine-Neckar area that includes Heidelberg 鈥 are still going strong.

Local governments have got involved too. In Heidelberg, a giant technology park that is majority owned by the city nuzzles next to the university. With 50,000 square metres of space, it houses subsidiaries of giant companies including Merck and Abbott and 90 smaller companies. In a brand-new building, 10,000 square metres still wait to be filled. With 1500 biotech workers in the Rhine-Neckar region, it may be a far cry from the 22,500-strong workforce in San Francisco鈥檚 Bay area, but it isn鈥檛 a bad start.

With government encouragement, the private sector is playing a key part in the creation of new companies. Many of the companies born in the Rhine-Neckar area were given a helping hand by Heidelberg Innovation, one of the leading German venture capital companies. Back in 1997, it had 鈧12 million to seed 12 companies, of which LION Bioscience was one. Only one of this dozen has folded so far, a remarkable success rate given the economic climate.

But will the others survive? 鈥淭he capital in biosciences has dropped by 90 per cent since 2000. I鈥檝e never seen anything like it,鈥 says Klaus Pate, managing director of Heidelberg鈥檚 technology park. Still, he expects the park to be sheltered from the looming biotech bubble burst. 鈥淲e were really picky in deciding who would come here. Some people criticised us for this and said we could have more people here already. But in Berlin up to half of the biotech companies might fail. That won鈥檛 happen here,鈥 he says.

Others aren鈥檛 so sure. 鈥淭here are too few companies with actual products on the market,鈥 says von Knebel Doeberitz. 鈥淎ll the programmes for start-ups is just burnt money.鈥 He says part of that problem stems from the explosion of investment companies that came along with the biotech growth 鈥 these often have too little experience to properly judge which ideas will fly and which will sink without trace. 鈥淭he investors suffer from a lack of vision 鈥 they have no perception of the true market. There were millions of companies set up to build chips, and only one or two of these will survive,鈥 he says.

But the rest of the world is facing these challenges as well. At least in Germany, if the biotech bubble makes a mess when it bursts, the country will have lasers, solar cells and a host of other technologies to help see it through. And, of course, the Fraunhofers will still be keeping the links between science and industry strong.

Wealth of invention

Germany鈥檚 research tangle

鈥淵es, it鈥檚 confusing,鈥 laughs Markus Egg, head of the Romano-Germanic Central Museum in Mainz. Despite its name, the museum is more of an archaeological research centre than a tourist attraction. And the confusion goes deeper. The museum is part of the Gottfried Wilhelm Leibniz Association of German Research Institutes, one of Germany鈥檚 four major government-funded research networks, which are interlinked in complex ways with each other, with companies, universities, technical colleges and Fachhochschulen 鈥 universities of applied research, for which there is no equivalent term in English. 鈥淭here wasn鈥檛 some great plan. It just evolved this way,鈥 continues Egg with a grin.

But has it evolved in the best way? 鈥淧ersonally I鈥檝e always felt the arrangement to be sub-optimal,鈥 says Harald zur Hausen, vice president of the Helmholtz Association, another of the networks that even zur Hausen has a hard time defining. It consists of 鈥渘ational research centres鈥 that do science of national relevance and so are funded primarily by the federal government.

The centres are also on a grand scale: they have big buildings, big brains, and often big 鈥渢oys鈥 鈥 including the nuclear fusion facilities at the Max Planck Institute for Plasma Physics at Garching, near Munich, and at Greifswald in the east, which, confusingly, is also part of the Max Planck network. One of the best known Helmholtz centres is the German Cancer Research Centre (DKFZ) in Heidelberg, where zur Hausen was chairman for 20 years. About 2000 people work on its campus near the university.

Leibniz in the middle

Like the Helmholtz centres, the Leibniz Association of German Research Institutes are defined as national research centres. There are, however, some subtle differences between the networks. In its philosophy, the Leibniz Association sits somewhere between the fundamental Max Planck and the applied Fraunhofer. Its institutes work on basic research with clear applications, so they have strong links with universities and industry. This objective dovetailed neatly with what most of the academies in the former East Germany were trying to do, so after reunification in the early 1990s all the rescued science centres from the eastern half of the country were assigned to the Leibniz Association. It is now one of the major forces trying to rescue industrial research in eastern Germany.

Specialist focus

Most of the Leibniz centres focus on a central topic. The Romano-Germanic Central Museum, for example, is one of the world鈥檚 top centres in conservation of archaeological finds, and has a thriving business in making copies of such objects for research and display. The centres tend to be multidisciplinary 鈥 most of the German research on climate change, marine sciences and tropical diseases takes place at a Leibniz centre.

The association encompasses humanities as well as science and is funded 50:50 between the federal and local state governments. This differs from the Helmholtz institutes, which get most of their money from federal sources. A more noticeable difference between Helmholtz and Leibniz centres is their size 鈥 the Mainz Museum has only about 30 people working in it. But like the Helmholtz centres, all are of international standing.

Zur Hausen argues that the boundaries between these two networks are fairly arbitrary, and says in cases where the science overlaps, as it does in health, such boundaries could be detrimental. Some 17 per cent of the Helmholtz centres, 20 per cent of Leibniz institutes and between 5 and 10 per cent of the Max Planck centres deal with health-related research, for example, yet they are all ruled and funded differently.

鈥淭he basic organisational structure makes no sense,鈥 zur Hausen says. 鈥淲e should be combined with the Leibniz institutes at least to form some sort of national institute of health.鈥

Henning Scheich, vice-president of the Leibniz Association, agrees that there is some overlap between associations. But he think there are advantages to keeping them separate, particularly as it means the state governments can have a say in which problems get tackled. 鈥淭he basic idea to concentrate health research isn鈥檛 bad, but practically it鈥檚 difficult,鈥 he adds. 鈥淎 lot of clinical research is in the universities and they wouldn鈥檛 like a controlling body.鈥

The government does have some initiatives to interlink science by topic rather than by institution, through a series of 鈥渃ompetence networks鈥. There is one of these for nanomaterials, for example, and another for genomics. In the latter, five organisations were established as 鈥渃ore facilities鈥 that are linked to five areas of study 鈥 environmental, cardiovascular, neurological and infectious diseases, and cancer 鈥 which in turn are each linked to five cities. This isn鈥檛 the broad vision zur Hausen has in mind and, more worryingly, it might not survive the next few years.

鈥淲e hired a lot of people for these platforms. But we don鈥檛 see where the money will come from when the current funding ends in March 2004,鈥 says Peter Lichter, a scientist at DKFZ.

鈥淚t鈥檚 a first step to get these groups to take a close look at each other,鈥 says Scheich. 鈥淏ut these networks will have to stand the test of time. Politicians seem to think if you link several weak centres together you get a strong network, but it doesn鈥檛 work like that.鈥 In the genomics network, Lichter points out, many of the cities are included more for political reasons than for scientific ones.

If they could start again from scratch, a lot of people would piece together German science in a totally different way. As it is, they have to work with what they have. 鈥淚 wouldn鈥檛 advise having all these institutes outside the universities in other countries,鈥 says Scheich. 鈥淭his isn鈥檛 the ideal solution. But because of Germany鈥檚 history, it works here.鈥

Laser city

鈥淒on鈥檛 look at that, that鈥檚 top secret,鈥 says Ulrich Russek as he shows me around the Fraunhofer Institute for Laser Technology (ILT) in Aachen. It鈥檚 a common refrain. Several big businesses have sponsored research here, including Siemens and BMW, and they wouldn鈥檛 look kindly on my prying into their secrets.

The ILT is the biggest laser research centre in Europe, working on 200 projects and producing about two companies and 20 patents a year. Nearby, there is a Fraunhofer institute for production technologies, Germany鈥檚 biggest technical university, the research labs of Philips, Ericsson, Ford and a dozen more specialised companies. The ILT calls it 鈥淟aser Region Aachen鈥, though it admits the moniker hasn鈥檛 yet caught on.

Germany has real strength in optical technologies, which the government is keen to encourage. From 2002 to 2006, it has earmarked 鈧280 million for projects investigating optical techniques for use in medicine, telecommunications, astronomy or materials processing. Fifteen per cent of jobs in the German manufacturing industry rely on such technologies, most of them in the car industry. The country also has 40 per cent of the world market for making lasers that cut, weld or shape the surface of materials 鈥 the speciality of the ILT.

The ILT is the institution that brought us affordable lasers that can carve out a picture inside a clear piece of glass 鈥 a trick now popularly used to make 3D images of buildings or flowers inside paperweights. They also developed a technique for welding coloured plastic boxes together without roasting any electronics inside. The main application is making plastic keys for top-of-the-range cars 鈥 a surprisingly big market.

There are plenty of more serious problems being tackled at the institute. It is the only European member of an international research effort to develop extreme ultraviolet lasers, which have such short wavelengths they should be able to carve out details on the next generation of computer chips. It is also looking at using lasers to cut precision holes in banknotes as an anti-forgery device, to melt together metal powder as a 3D printing technique, and to drill holes inside glass to make tiny 鈥渓aboratories鈥. Then there are any number of other intriguing projects lurking behind those doors marked 鈥渢op secret鈥濃

Who鈥檚 Who

MAX PLANCK SOCIETY

鈥79 facilities doing basic research. Funded jointly by the federal government and individual states.

FRAUNHOFER SOCIETY

鈥59 facilities doing applied research. Funded 80 per cent by commercial contracts, the rest from federal government.

HELMHOLTZ CENTRES

鈥15 giant national research centres. With 24,000 employees, it is the biggest science organisation in Germany. Three-quarters of their funding comes from government, a quarter from other public and private sources. (German only)

LEIBNIZ ASSOCIATION

鈥80 national research centres that combine basic and applied research in both the sciences and humanities. Funded jointly by the federal government and the individual states.

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