Industrial research expensive, but pays off

Jakarta/Jena – When Indonesian President Joko Widodo visited Germany in April, he took time to learn about the country’s dual training system, which allows students to attend classes and reiceved on-the-job training at a company the same time.

Foreign Minister Retno Marsudi said the president was interested in exploring the job-oriented program because the government is convinced that the system is the answer to demands of the job market and tougher competition in the Asean economic integration.

Shaping vocational training outside of schools in cooperation with the federal states is one of the main tasks of the German Federal Ministry of Education and Research (BMBF), said Christoph Wannek, an official from BMBF Regional Innovation Initiatives division.

But Joko may want to consider emulating other policy, such as funding research from basic research to cutting edge technology that the BMBF is also in charge of, apart from vocational training, to boost competitiveness.

“The BMBF allocated 16.4 billion euros out of its 2016 budget to increase competitiveness in research and innovation system and the education system in East Germany,” Wannek told a group of international journalists in the east German town of Magdeburg.

Germany’s reputation for fostering research and innovation is also possible due to substantial support that allows them to thrive, such as its GDP allocation for research expenditure and public funds for numerous research institutions in the country.

“Data from 2013 showed there were almost 1,000 publicly funded research institutions in Germany, with research expenditures of 80 billion euros or 2.84 percent of GDP and 605,000 people in the research and development sector,” said Katja Lasch, the head of international research marketing of the German Academic Exchange Service (DAAD).

This is in stark contrast to Indonesia, whose research spending is only 0.08 percent of GDP in 2013 and most of its research and development was performed by public research organisations, making Indonesia’s innovation performance appeared weak on various measures compared with its Southeast Asian neighbors that spent more than 0.1 percent of GDP on research and development, according to various data from OECD, World Bank and Unesco.

According to BMBF data, around 2/3 of research and development in East German states is from the public sector, with nearly 3 percent out of Saxony state’s GDP is allocated for research and development while other eastern federal states have much lower allocation at 1.4 to 2.2 percent out of their GDPs.

DAAD’s Lasch said the majority of research expenditures in Germany came from the industry sector, which accounted for 67% of the spending, while the rest were from universities and non-profit public and private institutions.

Industrial research has proved to be the backbone of growth for a company like Carl Zeiss AG, which relies on research and innovation for its cutting-edge optical technology.

“Technology doesn’t come for free,” said Ulrich Simon, senior vice president of corporate research and technology of the company in its sprawling office compound in Jena, Thuringia, which is the birthplace of optics and photonics technology thanks to its two most famous residents, Carl Zeiss and Ernst Abbe, who founded the company in 1846.

IMG_7906
The office compound of optical systems manufacturer Carl Zeiss AG in Jena, Thuringia, which includes research facilities and a planetarium. Photo: The Parrot/Ismira Lutfia Tisnadibrata

The company invested about 10 percent of its revenue for research and development conducted in its 30 research centers around the world, he added.

Zeiss and physicist Abbe’s research in optics and physics are the origins of the company’s vision care division, which produces lenses for eyeglasses.

“Every two seconds people buy eyeglasses now,” Simon said in his presentation.

The division experienced growth in all regions and saw a satisfactory trend for their consumer optics in difficult market environment with 1,007,000 euros of revenue in the fiscal year 2014-2015. It was an increase of 7 percent from 946 million euros in the previous period. The company generated total revenue of 4,511,000 euros with 5 percent increase from the 2013-2014 period and 88 percent of it came from outside Germany.

“Southeast Asia is one of our most important markets with its stable economy,” Simon said.

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