R&D Collaboration: Growing Vital Links
While the importance of U.S.-German trade and investment is broadly recognized, the vital R&D links between the United States and Germany are less well known even though they are key drivers of innovation and scientific breakthrough. Ernst & Young's 2008 European Attractiveness Study, for example, found that the United States and Germany were rated as the first and third most dynamic countries in terms of innovation. Recognizing that scientific research and product development have enormous economic multiplier effects globally, this increasing collaboration is not only vital to German and U.S. economic growth, but to worldwide prosperity.
High tech is a growing component of bilateral trade. Germany purchases more biotech from the United States — $2.34 billion in 2007 — than any other country. By the same token, Germany is second only to Ireland in selling biotech products to the United States ($1.24 billion versus $1.48 billion, respectively, in 2007). Only Japan surpasses Germany as a market for American opto-electronic products ($775 million versus $716 million in 2007).
Asian manufacturers dominate in information and communication technologies, but Germany is the United States’ biggest European supplier ($1.43 billion in 2007).
Germany is also the United States’ sixth largest export market for such products ($3.22 billion).
Public R&D investment supports basic scientific research carried out in university-affiliated research laboratories, but it is in the private sector where these ideas are transformed into innovations that increase productivity and support the high standard of living we enjoy. A long tradition of scientific exchange programs and foundations further supports joint R&D efforts. Germany and the United States have made particular progress in the fields of alternative energy, the life sciences, and engineering.
In the 21st century, energy security will be defined by environmental responsibility and innovation. German-American cooperation in the field of wind and solar energy has resulted in an estimated $1 billion in cross investment, the implementation of alternative environmental technologies, and the creation of good jobs in both countries.
German and American researchers are working together on projects to advance the treatment of cancer, diabetes, muscular dystrophy, immune deficiencies, and other diseases. Advances in bioinformatics, computer tomography, and embryonic cell replacement add momentum to these research achievements.
Germany’s R&D investment in the United States is particularly noteworthy. German-owned corporate affiliates lead in R&D by foreign firms in the United States, accounting for 2.8% of the R&D spending there. They contributed $6.3 billion in U.S. R&D expenditures in 2005 alone, and corporate Germany's R&D activities in the United States have also become critical to continued German economic vitality. Conversely, U.S. firms consider Germany to be a good or very good location for their R&D activities. According to a 2006 American Chamber of Commerce survey, American businesses value the high standards of university-level education in Germany and non-university research facilities in the private and public sector, Germany’s outstanding infrastructure (telecom and transportation routes), and its geographic position in the heart of Europe. A decisive factor for U.S. investors regarding the transformation of knowledge into innovation is Germany's supply of well-qualified employees, who are valued as competent, professional and goal-oriented.
