Prof. Dr. Peter Gruss: Innovations require inquiring minds and entrepreneurship

A German investment company once ad­­vertised using the slogan “Money grows in your head.” They have a point there: smart heads generate new findings, which clever business people turn into new processes and products. The re­­sulting profits can, in turn, flow into the production of knowledge: either directly into industrial research or via taxes and government budgets into universities and research institutes, where more new knowledge emerges – a perfect cycle, provided science and business cooperate closely.

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Electron-microscopic image of a network of nerve cells .

According to a US study, approximately half of the references in US patent doc­­uments are made to publications result­­ing from government-funded re­­search. In that regard, the greatest significance is attached to research results produced domestically. In other words: new findings are often at the source of new pa­­­tents and, thus, are the foundation of innovation. Fundamentally new things arise from – as the name implies – funda­men­tal research. The transistor is a prime example: without transistors, none of to­­day’s computers or CD players would work, let alone any electronic control system, neither in industry nor in the ubiquitous washing machine. The findings leading to the development of the transistor ac­­­crued during the 19th and 20th centuries. Their originators read like a who’s who of physicists and chem­­ists of the time: Max Planck and Albert Einstein, Ernest Rutherford and Niels Bohr, Werner Heisen­­berg and Erwin Schrödinger, among others. In 1947, Bell Labs finally announced the first applicable patent for a transistor. Nowadays, the transistor is at the base of all digital electronics.

The many such examples demonstrate the caracteristic that innovations and fundamental re­­search are links in a chain and that investing in fundamental research is profitable. What the optimal ratio for investment in fundamental research is for a hightech location like Germany is difficult to determine. However, one thing is clear: the more technologically ad­­vanced a country is, the more expenditure on fundamental research should increase.
Research by Hans Gersbach at the Center of Economic Research of the Swiss Federal Institute of Technology (ETH) in Zurich corroborates that.

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Material scientists at the Max Planck Institute for Iron Research in Düsseldorf have developed lightweight steels which are both very strong and tensile. Their low specific weight and mechanical properties make them an ideal material for the motor vehicle industry.

The knowledge gained from fundamental research on the governing principles of nature or the human body as well as on the structures and correlations of quarks and electrons, on the one hand, and the vast dimensions of the universe, on the other hand, is at the base of revolutionary innovations and provides us with opportunities to meet the challenges of to­­mor­­row and beyond. They include issues related to energy supply, healthcare and nutrition as well as the controllability of the consequences of climate change or population growth. In search of answers to those urgent ques­­tions, chemists are trying to develop new storage technologies, biomedical scientists are researching inno­­vative thera­­peutic approaches, and plant scientists new types of grains.

Internationally, Germany is very well placed with its universities and research organi­­sations. After USA, China and Japan, Ger­­many is fourth among the nations of the world in terms of research and develop­ment spending. Companies, too, are ex­­tremely active in the research field: invest­­ments from German busi­nes­­s­­es account for two thirds of research and development spending. In 2011, these investments are expected to reach the 60 billion euros mark.

At the same time, the Commission of Experts for Research and Innovation set up by the German government states the following in its 2011 report: “In the field of cutting-edge technologies, Ger­many (…) suffers significant shortcomings” while, in Switzerland, France and Bri­tain, for example, cutting-edge tech­nolo­gies have gained in significance over the past few years. As a matter of fact, the gap between findings and app­li­ca­tions poin­ted out in the report is a weak spot in the German innovation system. In 2005 already, the business magazine “brand eins” was criticising that while “international researchers seek something useful, German researchers are seeking the Nobel Prize”. The accusation falls short, however. Actu­ally, fundamental research in Ger­many generates a multitude of high-quality ideas. Only, in general, those findings are just not ripe for application yet. Since further development of a good idea into a marketable product carries the risk of failure besides being pretty costly, many firms shy away from the costs and the risk – even though they may be greatly profitable in the end.

That is why new fundamen­tal research findings are frequently not even given an opportunity to develop their innovation potential.

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High technology for the new fusion experiment Wendelstein 7-X is being set up at the Max Planck Institute for Plasma Physics. With nuclear fusion, science is aiming at replicating solar fire on Earth.

In order to close that gap between funda­mental research and application, the Max Planck Society and the Fraunhofer Society – which is also based in Germany and dedicated to applied research – have in recent years intensified their cooperation specifically in multi-disciplinary areas. The goal of that cooperation is to bring find­­ings gained in fundamental research to application and, thus, contribute directly to the development of new technologies. Max-Planck-Innovation GmbH, a subsid­iary of the Max Planck Society, supports young entrepreneurs in the science field. Since the early 1990s, approximately one hun­­dred successful new companies have sprung from institutes of the Max Planck Society – under substantial guidance by innovation advisors.

 

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However, in spite of all those support meas­­ures, the entrepreneurial spirit in Germany remains too unpronounced. Referring to the entrepreneurship capital of a region, eco­­n­­­­omist David B. Audretsch means the abil­­ity to generate entrepreneurial behaviour. It involves aspects such as social accept­­ance of entrepreneurial behaviour, enter­­prising young business people as well as banks and venture capitalists willing to share not only future benefit, of course, but also the upfront risk. The scarcity of venture capital in Germany remains grave. In that regard, we require new incentives – including on the European level – so that firms as well as private and public inves­­t­­­ors invest more in cutting-edge techno­l­­­­ogies. Everybody would benefit from that. Statistical analyses demonstrate that the bigger the entrepreneurship capital, the bigger the economic productivity. Creating growth, thus, requires structural conditions promoting creative, independent entrepreneurs and innovative thinkers.

A glimpse at the USA reveals why the founder ratio is so much higher there than in Ger­­many – at barely five per cent in this country, it is only about half of what it is in USA: besides economically measurable variables such as low tax rates, small labour costs, little regulation and minimal restrictions, the American public pays a high degree of recognition to any­­one who shows the courage to assume risks and personal responsibility.

What is more, we must find new forms of public-private partnerships, which also enhance our competitiveness. Policy­makers have started new initiatives to that effect. In the wake of the High-Tech Strategy 2020, the “VIP” project was initiated to “validate the innovation po­­tential of scientific research”. The programme precisely aims at reducing the gap between findings and applications – and, since “VIP” includes relevant expert advice as well as financial means, it has the potential to help generate new proc­­esses and applications.

The transfer of new findings towards applications does not pursue the only goal of safeguarding prosperity at home. We must also see to it that our planet remains liveable in the next fifty or one hundred years.

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What is more, we must find new forms of public-private partnerships, which also enhance our competitiveness. Policy­makers have started new initiatives to that effect. In the wake of the High-Tech Strategy 2020, the “VIP” project was initiated to “validate the innovation po­­tential of scientific research”. The programme precisely aims at reducing the gap between findings and applications – and, since “VIP” includes relevant expert advice as well as financial means, it has the potential to help generate new proc­­esses and applications.

The transfer of new findings towards applications does not pursue the only goal of safeguarding prosperity at home. We must also see to it that our planet remains liveable in the next fifty or one hundred years.

Gruss0039The author is president of the Max Planck Society. Prior to that, he was active as director of the Max Planck Institute for Biophysical Chemistry in Göttingen. His work earned several awards, including the Leibniz Prize. For his idea to implement developmental biology as a basis for innovative therapies in the treatment of illnesses, he and Herbert Jäckle were awarded the German Future Prize in 1999.