Saxony witnesses a nearly 10% rise in investments focused on innovation - Increase in Research and Development Investment in Saxony Approaches Nearly 10 Percent
In a recent report by the Center for European Economic Research (ZEW) on behalf of the Federal Ministry of Education and Research, Saxony has been highlighted for its outstanding performance in research and development (R&D) activities. Economics Minister Dirk Panter (SPD) praised the innovation power in the Free State, stating that innovating means investing in the future.
The top sectors investing in R&D in Saxony are the electrical industry/instrument technology, mechanical and vehicle engineering, and information and communication sectors. Together, these three sectors accounted for almost 60 percent of total R&D expenditure in Saxony in 2023. Notably, the electrical and instrument engineering industry alone was responsible for 40 percent of the R&D spending.
Regarding R&D intensity, the electrical and instrument engineering sector in Saxony had an R&D intensity of around 7 percent of turnover, which is above the state average and also above the national average in Germany. Saxony’s proportion of companies with continuous R&D activities stood at 15 percent, slightly higher than the national average of 13 percent.
In terms of comparison, Saxony’s R&D expenditure was about 1.9 billion euros in 2023, with total innovation expenditure (including preparation, production, and market launch of innovations) reaching around 4.6 billion euros, marking an increase of nearly 10 percent over the previous year.
Minister Panter also mentioned that small and medium-sized enterprises (SMEs) contribute significantly to the innovation dynamics in Saxony. The positive R&D investment trend in Saxony is driven strongly by SMEs, which invest an above-average amount relative to their turnover and benefit notably from national funding instruments such as the German research allowance or tax credit for R&D.
Occasional R&D activities were recorded more frequently in Saxony, at 11 percent compared to the federal average of nine percent. Nine percent of Saxon companies awarded research contracts to third parties in 2023, a slight increase compared to previous years.
The survey on the innovation behavior of the Saxon economy is conducted annually by the Ministry of Economics, and the report on the innovation behavior of the Saxon economy is evaluated annually by the Ministry of Economics. This is the first year that the innovation activities in the electrical industry/instrumentation, machinery and vehicle construction, and information and communication sectors have been analyzed in the report.
In summary, Saxony performs notably well in its R&D intensity and continuous innovation activities, particularly in the electrical and instrument technology sector, compared to both state and federal averages. The R&D ecosystem in Saxony benefits from strong SME involvement supported by federal funding, helping sustain this above-average investment level.
- The employment policy in Saxony should focus on attracting and retaining skilled workers in the top sectors investing in research and development (R&D), such as the electrical industry/instrument technology, mechanical and vehicle engineering, and information and communication sectors, which together accounted for almost 60 percent of total R&D expenditure in 2023.
- To further strengthen the innovation ecosystem in Saxony, it is essential to implement a community policy that advocates for the support of small and medium-sized enterprises (SMEs), as they significantly contribute to the innovation dynamics and invest an above-average amount in R&D relative to their turnover, benefiting notably from national funding instruments like the German research allowance or tax credit for R&D.
