Fraunhofer was founded in 1949 and grew into Europe’s largest application-oriented research organization.
Fraunhofer currently employs over 20,000 members in Germany, is internationally networked, and manages
an R&D budget of over 1,8 Billion Euros per year. An important step for Fraunhofer to become an integral
component of the German innovation system was the introduction of the Fraunhofer Model of financing
based on a performance-related system of financial management. The underlying model of the allocation
and distribution of public funding to Fraunhofer that is subsequently allotted to specific research groups
is one of the success factors of Fraunhofer. Fraunhofer is proud of its decentralized organizational model.
Fraunhofer is comprised of 60 Institutes in Germany working in different fields, under one legal framework,
and with a strong brand value. Every Fraunhofer Institute is affiliated with a German University and every
institute director simultaneously holds a chair at the affiliated university. It is a challenge for the headquarter
organization to balance the intended competition of individual Fraunhofer Institutes with complementarity
cooperation in science among Fraunhofer-Institutes, especially when coming from different knowledge
domains; however, this goal results in a significant advantage. The unique strengths of Fraunhofer offer system
solutions in a world with increasingly complex R&D challenges. While growing to become the largest
organization on Europe to focus on applied research it is the challenge to remain an agile organization that is
flexible in organizational structure. Fraunhofer has reached a well-recognized position in the European innovation
landscape. It is often referred to by science2 and governments3,4 as a role model for innovation policy
and a key element of the latest successes in the German economy that has recovered quicker from the latest economic crisis than most other western economies. The paper explains Fraunhofer as an organizational
paradigm and its underlying management model to elaborate on the challenges of managing a research organization.
We wish to show how it is possible to transfer the management model and philosophy of Fraunhofer
to innovation systems with different framework conditions and challenges. A universal conclusion may be
drawn based on the description of Fraunhofer; however, changes in existing structures and innovation systems
cannot be implemented over night.
This paper is developed from a presentation delivered at the "2012 STEPI International Symposium," held in Seoul, Korea on May 4,
2012. I appreciate the valuable comments and discussions I had at the Symposium.