products and industrial processes utilized by the private sector. All of them grapple with the challenges of globalization and seek to ensure that knowledge generated by national research institutions is applied domestically, giving rise to domestic value added and jobs.


The organizations reviewed in this chapter include some of the finest applied research institutions in the world. Germany’s Fraunhofer-Gesellschaft and Taiwan’s ITRI have won widespread acclaim for their achievements and their methods have long been the subject of extensive study. The Catapult and Carnot groupings, although bearing designations that have been established only recently, include storied research institutes of strong reputation in the science and technology community, such as INRIA of France and the UK’s Advanced Manufacturing Research Centre. Canada’ IRAP has been recognized as “one of the best managed and effective government programs to facilitate R&D and commercialization by small and medium enterprises (SMEs).”2

Germany’s Fraunhofer-Gesellschaft

The Fraunhofer-Gesellschaft (Fraunhofer Society) is a not-for-profit association based in Germany comprised of a headquarters organization, 60 research institutes, and 20 other domestic research centers, and international research centers in the United States, Chile, Austria, Portugal, and Italy. Its mission is to perform contract research for public organizations and companies that transforms basic research from university and nonuniversity laboratories into commercial products and industrial processes. Each Fraunhofer institute specializes in a particular technological competency and is paired with a German university that has relevant scientific knowledge. The institutes perform research and development (R&D) on their premises utilizing their own professional staff as well as undergraduate students and postdocs. Pursuant to contractual arrangements with companies, the institutes develop product prototypes and processes and enable companies to test equipment and processes on pilot manufacturing lines and simulation platforms. A byproduct of the institutes’ research for industry is a continual flow of Fraunhofer alumni with theoretical knowledge and practical skills into German industry. The institutes occasionally spin off small start-up companies.

The Fraunhofer derives roughly one-third of its funding from so-called core funds provided by the German federal and Länder (state) governments, one-third from research contracts with government agencies and other public organizations, and one-third from contract research for private companies. Of


2The 2011-2012 Departmental Performance Report for the National Research Council of Canada. Access at

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