Innovations in Germany: Research funding stopped

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Experts repeatedly recommend targeted research funding.

(Photo: imago images / Westend61)

Berlin Since Thursday, 8 p.m., the Federal Ministry of Economics has stopped accepting applications from SMEs for innovation funding under the ZIM program. The “Central Innovation Program for SMEs” (ZIM), endowed with 620 million euros for 2021, is the largest innovation funding program for small and medium-sized companies. Overall, the share of SMEs in research and development in Germany has tended to decline for years.

Experts therefore repeatedly recommend targeted funding. That was also the reason for the introduction of the new tax research subsidy, which was initially only intended to benefit companies up to a certain size.

Reason for the first acceptance freeze in the history of the ZIM: German medium-sized companies are too innovative and have already submitted so many applications that the pot is likely to be exhausted. Applications that have already been received are still being processed. In the corona pandemic, the program to stimulate the economy was increased from 550 to 620 million euros annually.

Stop endangers the innovation performance of smaller companies

The innovative medium-sized companies are alarmed: “The application ban must be lifted immediately”, said the managing director of the Association of Innovative Companies (VIU), Klaus Jansen, who also heads the Zuse community, in which the research institutes of medium-sized companies are organized. The medium-sized business association BVMW also asked the government to provide additional funds at short notice.

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The application freeze “massively endangers the innovation performance in medium-sized companies” Jansen told the Handelsblatt. It is also “inappropriate that university basic research is funded with growing billions in contributions and that medium-sized companies are left alone as the backbone of our economy”.

The ZIM is one of the few technology-open, low-threshold programs in which small and medium-sized companies can carry out research “which is characterized by a high risk, an expansion of the state of the art and a broad, practice-relevant, thematic openness”.

According to the Zuse boss, medium-sized businesses are dependent on research in order to survive in international competition. Therefore, he could not “switch them on and off ad hoc” because they had to be strategically planned, partners found and financed. “A month-long break in funding would therefore be a catastrophe for medium-sized research-based companies,” said Jansen.

The Ministry of Economic Affairs told the Handelsblatt that it was not unusual for funding programs to be closed towards the end of the year due to excessive demand. However, this has not yet happened with the ZIM.

DIHK calls for funding to be continued

In a position paper, the DIHK had just urged research and business to be more closely linked in the future in order to increase Germany’s innovative performance. That must have priority and receive sufficient financial support. To this end, tried and tested funding instruments such as the ZIM, but also “INNO-KOM” or “KMU-innovativ”, as well as tax research funding, would have to be permanently consolidated.

The President of the Stifterverband der Wirtschaft für die Wissenschaft, Andreas Barner, also pointed out that in view of the challenges posed by the transformation, science and research needed “new impulses and resources” to “further strengthen excellent basic research and innovation orientation”.

“The high demand for funding from the ZIM shows how high the innovation potential is in medium-sized companies,” said the association’s vice-general secretary, Volker Meyer-Guckel, now to the Handelsblatt. “I therefore expect that the suspension of funding will only be a temporary measure.”

However, the Zuse community is already looking to the future with apprehension, because the federal government’s financial planning for 2022 again earmarked only 550 million euros for the ZIM. The Federal Ministry of Economics refers to the next government: They must then decide in the budget deliberations how to proceed.

More: Research funding was also controversial during the election campaign: The Liberals in particular are pushing for more control over the success of taxpayers’ money.

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