Mechanical engineering is increasingly moving research abroad

Four out of ten mechanical engineering companies are already researching and developing outside of Germany - and many of them want to expand their activities there. The VDMA is therefore sounding the alarm and criticizing a planned cut by the Ministry of Economic Affairs.

Germany's mechanical and plant manufacturers are increasingly shifting research activities abroad. 43 percent already organize research and development (R&D) outside of Germany, according to a survey by the Association of German Mechanical and Plant Engineering (VDMA) among 400 member companies. More than two thirds (69 percent) of those who are already conducting research abroad want to expand their research and development activities beyond the borders.

This development is "a clear alarm signal for Germany as an industrial location - also because with 190,000 engineers we are the most important value creation partner for new products and processes in the economy," says VDMA deputy general manager Hartmut Rauen. The companies in mechanical engineering continued to invest at their headquarters in Germany. However, there are declines in sales and high location costs. “Anyone who wants to secure the industrial location and high-tech in this country must now create the conditions for investment and innovation.” Unbureaucratic funding is an important factor.

Rauen therefore criticized the planned cuts in the so-called Industrial Community Research (IGF) in the 2027 budget of the Federal Ministry of Economics as a “fatal signal”. There is no better instrument for building bridges between science and industry. “It is precisely those companies that still rely heavily on Germany as an R&D location that are suffering from the cuts.” Small and medium-sized companies in particular come together at the IGF because they cannot afford their own research departments.

Four out of ten companies already conducting international research expect their share of foreign research to increase by around ten percentage points in the next five years. Another almost 40 percent expect even greater growth. According to VDMA estimates, China and India are likely to become more important.