A study of Innovation Policies for Technology Transfer in Germany Uno studio sulle politiche dell'innovazione per il trasferimento tecnologico in Germania

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Università degli Studi di Modena e Reggio Emilia D

IPARTIMENTO DI STUDI LINGUISTICI E CULTURALI

C ORSO DI L AUREA M AGISTRALE IN

L ANGUAGES FOR COMMUNICATION IN INTERNATIONAL ENTERPRISES AND ORGANIZATIONS

A study of Innovation Policies for Technology Transfer in Germany

Uno studio sulle politiche dell'innovazione per il trasferimento tecnologico in Germania

Prova finale di:

Chiara Brigliano Relatore:

Margherita Russo

Correlatore:

Giovanni Bonifati

Anno Accademico 2018/2019

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Abstract

Germany is considered the cradle of industry 4.0, a revolution which has affected and renovated the entire world’s innovation policy systems. The current policy initiatives in Germany are indeed primary aimed at fostering research and the technology transfer processes as well as the consequent development of new technologies and innovations.

This dissertation aims at illustrating the German Research and Innovation System and the various innovation policies implemented for knowledge and technology transfer in the context of industry 4.0 by the different policy actors.

The focus of this work is on the innovation policies implemented by the four main non-university Organizations in Germany, namely the Fraunhofer Gesellschaft, the Max- Planck-Gesellschaft, the Helmholtz Gemeinschaft and Leibniz Gemeinschaft, as well as the innovation policies introduced by the Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Education and Research. For this purpose, the research instruments used consists of secondary data sources, namely research articles, governmental press releases, infographics, government publications and webpages. After an insight into the history and key terminology of industry 4.0, a presentation of the German Research and Innovation System is provided, along with a description of the online platforms developed by the Federal Government to spread the knowledge of digitalization and successfully take advantage of industry 4.0 opportunities.

Subsequently, the four main non-university organizations are depicted in their organizational structure, the innovation policies implemented and internal technology transfer organizations. The innovation policies for each institution are classified per thematic, type, year, sponsor and eventual provided economic support. It will be observed how these innovation policies focus on creating a strong relationship network among enterprises, research organizations and universities in order to augment the performance of the technology transfer processes.

As far as the innovation policies promoted by the Federal Ministry for Economic Affairs and Energy are concerned it will be demonstrated how they are aimed at facilitating the transposition on the market of research results, with a specific focus on small-medium sized enterprises. On the other hand, the innovation policies of the Federal Ministry of Education and Research are aimed at fostering R&D and technology transfer in both the societal as well as in the business environment; moreover, also the BMBF

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foresees initiatives to underpin the innovative business ideas of SMEs and technology transfer in those enterprises.

The findings of the present work have demonstrated how Germany has constructed a solid, strong innovation network based on a collaborative system among policy actors, where innovative ideas are fostered and concretely implemented, becoming eventually marketable or exploitable in an industrial environment. All in all, technology transfer in Germany in the digitalization age takes place in an efficient way, and from which both big and small-medium sized enterprises can benefit from.

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Abstract

La Germania è considerata la culla dell’industria 4.0, una rivoluzione che ha interessato e rinnovato l’intero sistema delle politiche per l’innovazione. In Germania, esse sono principalmente focalizzate sulla promozione della ricerca e dei processi di trasferimento tecnologico, così come sul conseguente sviluppo di nuove tecnologie ed innovazioni. La presente tesi ha come obiettivo la presentazione del sistema tedesco della ricerca e dell’innovazione, insieme alle varie politiche messe in atto dai diversi soggetti per il trasferimento di conoscenze e tecnologie nell'ambito dell'industria 4.0.

Il focus di questo lavoro riguarda le politiche per l' innovazione incentrate sul trasferimento tecnologico attuate dalle quattro principali organizzazioni non universitarie in Germania, ovvero la Fraunhofer Gesellschaft, la Max-Planck-Gesellschaft, la Helmholtz Gemeinschaft e la Leibniz Gemeinschaft, nonché sulle politiche introdotte dal Ministero Federale per l'Economia e l’Energia e dal Ministero Federale per l'Istruzione e la Ricerca. A tale scopo, gli strumenti di ricerca utilizzati consistono in fonti secondarie, ovvero articoli di ricerca, comunicati stampa del governo, pubblicazioni governative e siti web. Sulla base di un'analisi storica e dei principali concetti relativi all'industria 4.0, viene fornita una presentazione del sistema tedesco della ricerca e dell’innovazione, nonché una descrizione delle piattaforme online sviluppate dal governo federale al fine di promuovere la diffusione delle conoscenze in materia di digitalizzazione e di opportunità derivanti dall'industria 4.0. I quattro principali istituti di ricerca sono rappresentati nella loro struttura organizzativa, nelle politiche di innovazione attuate e nelle loro organizzazioni interne dedicate al trasferimento tecnologico. Le politiche innovative per ogni istituzione sono classificate per tematica, tipologia, anno di introduzione, promotore ed eventuale sostegno economico erogato. Viene evidenziato come queste politiche si focalizzino sulla creazione di una forte rete di relazioni tra imprese, organizzazioni di ricerca e università al fine di aumentare il trasferimento tecnologico.

Per quanto riguarda le politiche promosse dal Ministero Federale per l'Economia e l’Energia si dimostrerà esse siano volte a facilitare la trasposizione sul mercato dei risultati ottenuti dalla ricerca, con particolare attenzione alle piccole-medie imprese. Le principali politiche per l'innovazione del Ministero Federale per l'Istruzione e la Ricerca mirano inoltre a promuovere la ricerca e il trasferimento tecnologico sia nell'ambiente

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sociale che in quello imprenditoriale. Inoltre, anche le politiche per l'innovazione del Ministero Federale per l'Istruzione e la Ricerca mirano a sostenere le idee innovative delle PMI e il trasferimento di tecnologia in tali imprese.

I risultati del presente lavoro hanno dimostrato come la Germania abbia costruito un solido e forte sistema per l'innovazione basato su un sistema di collaborazione tra attori politici, dove le idee innovative vengono promosse e concretamente attuate, diventando così commerciabili o sfruttabili in un quadro industriale. Nel complesso, è possibile affermare che il trasferimento tecnologico in Germania avviene in maniera efficiente, e da esso possono beneficiare sia le grandi che le piccole-medie imprese.

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Abstract

Deutschland wird als Wiege der Industrie 4.0 angesehen, und zwar eine Revolution, die das ganze System der Innovationspolitik beeinflusst und erneuert hat. In Deutschland konzentriert sich die Innovationspolitik sowohl auf die Förderung von Forschungs- und Technologietransferprozessen als auch auf die folgende Entwicklung neuer Technologien und Innovationen. Das Ziel dieser Arbeit ist die Darstellung des deutschen Forschungs- und Innovationssystems. Darüber hinaus werden die unterschiedlichen Politiken vorgestellt, die von verschiedenen Akteuren für den Wissens- und Technologietransfer innerhalb der Industrie 4.0 durchgeführt werden.

Der Schwerpunkt dieser Arbeit liegt auf der Innovationspolitik der vier großen außeruniversitären Forschungseinrichtungen in Deutschland, nämlich der Fraunhofer- Gesellschaft, der Max-Planck-Gesellschaft, der Helmholtz-Gemeinschaft und der Leibniz-Gemeinschaft. Danach werden die Innovationspolitiken des Bundesministeriums für Wirtschaft und Energie und des Bundesministeriums für Bildung und Forschung analysiert. Zu diesem Zweck bestehen die verwendeten Forschungsinstrumente aus Sekundärquellen, d.h. aus Forschungsartikeln, Pressemitteilungen der Regierung, Regierungspublikationen und Webseiten. Die Arbeit umfasst eine historische Analyse, die wichtigsten Konzepte in Bezug auf die Industrie 4.0 und eine Präsentation des deutschen Forschungs- und Innovationssystems. Außerdem werden Online-Plattformen eingeführt, die von der Bundesregierung entwickelt wurden, um die Verbreitung des Wissens über die Digitalisierung zu fördern und die Möglichkeiten, die sich aus der Industrie 4.0 ergeben, zu erhöhen. Die vier Forschungseinrichtungen sind entsprechend ihrer Organisationsstruktur, der implementierten Innovationspolitik und der inneren Organisationen, die sich dem Technologietransfer widmen, vertreten. Die Innovationspolitik jeder Institution wird nach Thema, Typ, Einführungsjahr, Förderer und eventueller finanzieller Unterstützung gegliedert. Diese Politik konzentriert sich auf die Entwicklung eines starken Beziehungsnetzwerks zwischen Unternehmen, Forschungsorganisationen und Universitäten, um den Technologietransfer zu fördern.

Die vom Bundesministerium für Wirtschaft und Energie geförderte Innovationspolitik zielt dagegen darauf ab, die Umsetzung der Forschungsergebnisse in den Markt zu erleichtern. Diese Politik richtet sich insbesondere an kleine und mittlere Unternehmen. Die wichtigsten Innovationspolitiken des Bundesministeriums für Bildung

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und Forschung verfolgen das Ziel, Forschung und Technologietransfer sowohl im gesellschaftlichen als auch im wirtschaftlichen Umfeld zu fördern. Darüber hinaus zielt die Innovationspolitik des Bundesministeriums für Bildung und Forschung auch darauf ab, innovative Ideen von KMUs und den Technologietransfer in solchen Unternehmen zu unterstützen.

Die Ergebnisse dieser Arbeit zeigen, dass Deutschland ein solides und starkes Innovationssystem aufgebaut hat, das auf einem Kooperationssystem zwischen politischen Akteuren basiert. In diesem effizienten System werden innovative Ideen gefördert und konkretisiert, so dass sie marktfähig oder industriell verwertbar werden.

Zusammenfassend kann man sagen, dass Technologietransfer in Deutschland sehr leistungsfähig ist und dass sowohl große als auch kleine bis mittlere Unternehmen davon profitieren können.

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Introduction

In the last few years, there has been a growing interest in the fourth industrial revolution and its enormous source of potential for the worldwide economy. This work introduces the concept of industry 4.0 in general and explores how the technology transfer processes in this regard are carried out in Germany, as well as which are the main policies implemented to provide an efficient transferral of knowledge and technology from the scientific to the industrial world. In particular, this study deals with the innovation policies implemented by four main research organizations, the Federal Ministry for Economic Affairs and Energy as well as the Federal Ministry of Education and Research.

The first chapter introduces a key terminology relevant for the comprehension of the fourth industrial revolution. In particular, it explains its historical development in Germany and its effects on the country’s Innovation System and policies. The concept of

“digital platform” will be explored, along with the presentation of the two main digital ones adopted by the German government, which are aimed at rendering the high added value in the German industry capable of being used as a springboard to an efficient digitalization (BMWi, 2017). The first digital platform is the Plattform Lernende Systeme (Platform for Learning Systems), introduced in 2017 by the BMBF, aimed at promoting the usefulness and benefits, as well as informing about challenges, implied by self-leaning systems. The platform is aimed at enhancing the cooperation between humans, who perform research, and technological devices, who have turned into indispensable tools to transfer knowledge from research to industry. (Internetredaktion R. B. L., 2019). The second digital platform which will be analysed is the Plattform Industrie 4.0 (Platform Industry 4.0), which was introduced in 2013 by the BMWi and the BMBF with the aim of gathering individuals from the scientific and industrial field, inciting their collaboration to better understand and experience a fourth industrial revolution. More specifically, the platform enhances the knowledge of interested actors and contribute to the creation of new ideas related to the new digital technologies, as the platform includes the processing of participant advices, so that to develop new technologies transferable in industry (Plattform Industrie 4.0 n.d., a).

The second chapter provides an overview of the four main non-university Organizations in Germany (Fraunhofer Gesellschaft, Max-Planck-Gesellschaft, Helmholtz Gemeinschaft and Leibniz Gemeinschaft), exploring which are their main

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innovation policies implemented to augment the performance of technology transfer. It will be illustrated how these innovation policies focus on creating a strong relationship network among enterprises, research organizations and universities; in other words,

“collaboration” is the predominant word that bound them. It will be then demonstrated how the soft and financial policies implemented by the four research organizations are further fostered by the “Pact for Research and Innovation”, namely a pact managed both by the Federal Government and the Länder, which engage to increase their expenses on R&D for the non-university organizations by 3% every year. In return, the research organizations engage themselves to foster further innovation policies aimed at promoting a dynamic scientific system, augmenting of the national and international cooperation as well as reducing the existing distance between science and industry (Research in Germany, n.d.).

The third chapter illustrates the main innovation policies for technology transfer implemented by the BMWi in Germany. In particular, attention has been put towards the programme Von der Idee zum Markterfolg – Programme für einen innovativen Mittelstand (“From the idea to the market success – Programme for an innovative SME”), which was launched in 2019 to facilitate the transposition of research results on the market, with a specific focus on small-medium sized enterprises. Other innovation policy initiatives are aimed at spurring and encourage the foundation of start-ups; to improve the conditions of the most disadvantaged and weakest Länder, making them part of their own process of innovation; to install Competence Centres where companies can ask for advice concerning digitalization, starting to approach it; to underpin the German SMEs in dealing with the EU programme Horizon 2020 as well as to create the transmission and dissemination of knowledge as far as issues related to the field of electromobility are concerned (BMWi, n.d.).

The fourth chapter depicts the main innovation policies for technology transfer implemented by the BMBF in Germany. In particular, attention has been given to the Hightech Strategie 2025 and its entailed policy initiatives, whose main aim is to foster R&D in both the societal as well as in the business environment. The other analysed programme is the “Vorfahrt für den Mittelstand” (“Innovative SMEs”) programme, which initiatives are aimed at underpinning the innovative business idea of SMEs, which are at the core of the German economic model (BMBF, 2016b).

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Chapter 1: Industry 4.0 and digitalization in Germany

This chapter is aimed at introducing the basic terminology relevant for the comprehension of the fourth industrial revolution. In particular, it will be explained how and why has industry 4.0 developed in Germany, how is the German Innovation System composed and which are the main digital platforms established in Germany in order to help individuals keeping abreast of the digital revolution.

The first paragraph of this chapter offers an insight into the key terminology to understand the German Innovation System and the innovation policies implemented for knowledge and technology transfer. In particular, the first paragraph will illustrate and compare the terms “Technology Transfer”, “Open Innovation” and “Co-Creation”.

Subsequently, a deeper insight into “basic research” and “applied research” will be given: since these two kinds of research are carried out by different organizations in Germany, it’s important to understand which are their main differences and how they affect the country’s innovation system. More specifically, it will be illustrated how their combined work is essential to advance a country’s technological system, making it suitable to a new digital world. In this respect, digitalization is a phenomenon which is present not only in the humans’ daily life but also in their working environment. Germany can be considered as the cradle of industry 4.0, a revolution which has affected and renovated not only the German innovation policy, but also the entire world. In this regard, an overview of the terminology related to the technological revolution will be illustrated, namely: “Digitalization”, “Industry 4.0” “IoT” and “CPS”.

The second paragraph of this chapter outlines a short historical overview of the four stages of the industrial revolution, looking at how Germany has come to industry 4.0 along with which consequences and changes each phase has brought about.

The third paragraph, instead, will focus on the description of the German Innovation System, namely looking at how the R&D system in Germany works. After a brief introduction concerning the history of the German Innovation System, the actors who contribute to its implementation and functioning will be illustrated.

Lastly, the fourth paragraph will take a look into the two digital platforms Plattform Industrie 4.0 and Plattform Lernende Systeme. It will be explained why and how they can result as two useful tools not only for German companies, but also for

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citizens to understand and keep pace with the constant technological changes occurring during the fourth industrial revolution.

1. Conceptual framework

This first section is aimed at providing an overview of the terms “Technology Transfer”, “Open Innovation” and “Co-Creation” which represent the conceptual framework at the core of digitalization. Subsequently, the principal differences between

“basic and applied research” will be analysed in the context of digitalization and industry 4.0. In this respect, the usefulness of CPS and the potential of IoT will be illustrated. To conclude, this section will illustrate what innovation policy is and how it can help to foster the new technologies, projects and collaborations which continue to arise with the fourth industrial revolution. All these terms will be analysed taking into account Germany as country of reference.

Technology Transfer

Starting from the end of the 80’s, the concept of technology transfer has begun to be of a growing importance for the German policy system. This has been mainly due to the increasing relevance of internationalization and international cooperation, along with the augmented worldwide market competition, which have led companies to re-organize their allocation of resources, assets and strategies.

A general definition of “technology transfer” has been provided by F.T.Piller and D.Hilger, two professors at the RWTH Aachen University, who described technology transfer as:

“Einen Übertragungsprozess einer oft grundsätzlich patentierbare Technologie von einem Technologiegeber zu einem -nehmer. [...] Technologietransfer bedeutet so die Diffusion oder Verbreitung von Technologie zur wirtschaftlichen Nutzbarmachung für Dritte.”¹

“The concept of technology transfer describes a transfer process of a certain – often patentable – technology from a technology provider to a technology user. […] Technology transfer means therefore the diffusion or dissemination of technology for commercial exploitation on behalf of third parties”

1 F.T.Piller and D.Hilger, Praxishandbuch Technologietransfer (2013), p. 20

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From this definition it can be understood that technology transfer enables the tranfer of a patentable technology from one subject to another. Patents represent one of the main canals used for technology transfer, and the word patentierbare Technologie (patentable technology) describes all the inventions which meet the requirements to be granted for legal protection. When an invention is protected by the law, its inventor can enjoy the economic rights deriving from the invention. Moreover, inventions are protected in order to stimulate innovation and creation of new technologies: by protecting the results of the investments undertaken by the inventors for the development of innovations, the State gives to inventors incentives and means to finance further R&D activities in the future.

Technology transfer occurs between universities, research centres, non-research centres and business enterprises or organizations and entails all the objects and materials which derives from a technological process. The cooperation between the transferor (who transfer a technology) and the transferee (who receives and implement it) is fundamental to guarantee an efficient technology transfer: indeed, a planned process is necessary to ensure economic advantages deriving from the innovation in question. In this respect, there are three main phases in technology transfer: identification of the technology to be transferred, transfer of the technology to a specific subject and market implementation of the innovation (F.T.Piller and D.Hilger, 2013, p.21). The first phase of technology transfer entails the creation of new knowledge by an organization’s actors, which is suitable to generate new technologies in the market. In particular, a specific transferrable technological knowledge has to be chosen according to its future potential uses in different areas. Simultaneously, a first network of contacts concerning the possible recipients (transferee) are established. The second phase, instead, regards the selection of the final recipient to whom the transfer is addressed. At this point, the idea developed in the first phase is transformed in a prototype, namely the knowledge becomes a concretized in a real technology. Once the negotiation between the transferor and the transferee has been concluded, the third phase can begin. In this last step, there’s a real market implementation of the transferred technology, and the process is completed: the marketability of the innovation is possible through different instruments as, for instance, publications, patents and licences. On the whole, these three phases involve different subjects and actors, who shape the initial transferrable knowledge. In this respect, the costs to be paid for the implementation of technology transfer are correlated to the risks in bringing the innovation on the market: the lower the costs, the lower is the risks.

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However, in any case, these costs should be outweighed by the revenue coming from the implemented technology.

Technology transfer consists of innovations which can be “demand pull” or

“technology push” (F.T.Piller and D.Hilger, 2013, p.22). The first type of innovations depends on the market demand, namely the industrial needs, whereas the second type of innovations is generated in the scientific environment and then proposed to industry. In this respect, the “demand pull” innovations seem to be more convenient than the other type: since in industry there is already an existing demand where one or more needs require to addressed, the actors involved in the three-phases process are more willing to invest in the implementation of a new technology according to these needs, where the risk associated with a future commercialization of the product is lower. On the other hand,

“technology push” innovations are riskier since they have not an area or industrial sector of application, as they do not have to satisfy a precise need. Consequently, the actors involved in the process have to undertake a deeper study of the potential applications of the new technology, in order to understand how to successfully launch it on the market, where a need is absent. In other words, the “technology push” innovation have to create a market need in a specific area. Technology transfer for both types of innovation can be carried out through different means, which are summarized in the table below. (Table 1).

Means Functions

Employees mobility Employees moving from the scientific-research sector to the industrial sector enable the spread of new knowledge as well as the possibility of new collaborations between science and industry.

Consulting Experts provide companies with advices and necessary knowledge to solve particular technological problems.

Contract Research Companies require research organizations to undertake a specific project behind predefined conditions contained in a contract.

Publicly Funded Research Programmes

Actors coming from different institutions, research organizations and industry work on a specific

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research project, making the results at least partly publicly available.

Publications, seminars and conferences

Experts’ R&D findings are published on scientific journals, making new knowledge publicly available and further developable by other subjects. Similarly, seminars and conferences enable the diffusion and further development of technological knowledge.

Patents With patents, legal protection is granted to new inventions which are usable in industry. However, these inventions must be publicly accessible so that knowledge can be diffused.

Licences With licences, third parties are allowed to exploit the economic rights derived from patents and other intellectual property rights (IPRs), namely intangible rights embodied in a new invention, related to the human creativity which enabled to create it.

Students applied dissertation Applied dissertations may bring about new knowledge and attract companies’ attention, which may decide to recruit a student to implement the idea contained in the thesis.

Spin off companies Foundation of new companies by an inventor in order to render his inventions industrially applicable.

Table 1: Technology Transfer Means (F.T.Piller, D.Hilger, 2013, p.23-26)

The process of technology transfer is generally carried out with the presence of transfer intermediaries, enabling the transfer of technological knowledge from one subject to another. According to F.T.Piller and D.Hilger, it’s nearly impossible to bring a new innovation into the market without the presence of an intermediary figure. If the first phase begins, for example, with a scientific publication, a seminar or a conference, the diffusion of technological knowledge and its successful transformation into a new innovation is possible only if the recipient has a certain level of expertise and know-how, as well as resources to implement the innovation in question. Since this is hardly possible,

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intermediaries and their teams of experts play a big role in facilitating the transfer of knowledge: these intermediaries may consist of research institutes, non-research institutes, universities, agencies… (Czarnitzki et al., 2001, p.41).

In the last years, the technology transfer trend has experienced an increase in Germany: this has been due to the fact that the research results coming from governmental institutions, research centres, universities and enterprises have been increasingly exploited and implemented (Statistische Bundesamt, 2019). In this regard, it’s important to consider that the German’s technology transfer system has a mutual relationship with the country’s R&D system (Czarnitzki et al., 2001, p.42). In other words, the functionality of the technology transfer system and of the R&D system depends on their beneficial interrelation: in the course of this work it will be demonstrated how R&D actors and technology transfer actors can be both research performers as well as technology transfer intermediaries. Their capacity to interrelate and coordinate one another is crucial: it is true that R&D actors introduce new initiatives in order to enhance the technology transfer performance and opportunities. However, technology transfer can be effective only if the various institutions performing it are organized and interconnected as well as if the communication among them is efficient. The massive increase of industrial needs has required Germans institutions, organizations and enterprises to augment their number of employees in R&D, in order to simultaneously augment technology transfer and the number of inventions implementable on the market (Figure 1).

Figure 1: R&D Employees in Germany (Statistische Bundesamt, 2019)

0 50 100 150 200 250 300 350 400 450 500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

R&D Employees in Germany (2007 - 2017)

Government / Private institutions Higher education Enterprises

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The graph has been construed from the data collected by the Governmental Statistical Office of Germany which, in its last statistical report of June 2019, referred to the year 2017, has reported the number of employees in R&D divided according to three different sectors: government and private institutions (no profit), higher education and enterprises (for profit). Looking at the multiple line graph, it can be observed that the number of persons employed in R&D has generally risen across the years. Business enterprises represent the sector having the most employees engaged in R&D, and, at the same time, it is also the sector which has experimented the higher percentage of growth in the R&D personnel growth among years. Indeed, it can be possible to observe that between 2013-2017 there was a massive augment of employed personnel in all the sectors but, in this timeframe, while the number of R&D employees in government/private institutions has increased by 7.5% and in higher education by 9.7%, in business enterprises it has increased even by 21%. These data suggest that, at the end of the day, industries represent the main subject investing in R&D probably because they need to keep pace with the constant challenges and opportunities offered by digitalisation. This way, they can remain also competitive worldwide. Moreover, an increase of the personnel engaged in R&D in the three abovementioned sectors, has allowed Germany to increase patents applications and, consequently, the number of patents in force (Figure 2).

Figure 2: Patents in Force in Germany (WIPO, 2019)

520 540 560 580 600 620 640 660 680

2013 2014 2015 2016 2017

Patents in Force in Germany (2013 - 2017)

Patents

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According to the data collected by the World Intellectual Property Organization (WIPO), it can be seen that the numbers of active patents in Germany has massively increased in these last years. Reporting the data concerning the period previously considered for R&D personnel (2013-2017) on a graph, it’s clear that the percentage of released patents has followed the above examined R&D employees trend. This period has seen increase by13,5%. of patents in force in Germany, namely an increase of technology transfer both from resident, non-resident and abroad applications.

Open Innovation

A term which is often put in relation with technology transfer is Open Innovation.

The concept was developed by the scientist Henry W.Chesbroug at the beginning of the 21^st century. Open Innovation is about a free exchange of knowledge and ideas among industries, universities, research institutions and other actors involved in R&D, in order to jointly develop new products, services or business models. This process entails not only a share of knowledge but also a share of intellectual property, namely patents.

This concept is opposed to “closed innovation”, where a company develops its own R&D, without allowing other companies or actors to see its operate. With closed innovation, indeed, the company retain the complete control over its processes and ideas.

However, closed innovation entails more necessary investments and costs, as well as more risks in implementing a developed product onto the market (F.T.Piller, D.Hilger, 2013, p. 41-42).

Open Innovation instead is based on the principle that every actor can contribute to create knowledge, and it can manifest in two different ways: the outside-in and inside- out type (Meyer, D. J.-U, 2019). With outside-in open innovation, a company extract knowledge from the business and science areas, in order to enhance its own performance.

In the inside-out type, instead, a company decides to share its own knowledge with other actors (e.g. licensing, spin-offs) so that the value of the organization can be perceived as valuable by other companies.

In Germany, Open Innovation has acquired a particular importance in these last years and the trend continues to augment. (Blümel et al., 2018). As it can be observed in the graph showing the tendency of Open Innovation in Germany (Figure 3), the expansion of Open Innovation nearly coincides with the advent of the fourth industrial revolution, namely in the begin of 21st century. Indeed, during the period indicating the wider

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expansion (2010-2016) Germany has registered an augment in the number of collaborative partnerships and cooperation among research institutes, universities and business enterprises.

Figure 3: Open Innovation Trend in Germany (Blümel et al., 2018)

In this regard, it’s important to underline that, in Germany, Open Innovation seems to be present more in the inside-out type, as there are many Open Innovation platforms which have been established in the last years. These internet-based platforms can be managed by enterprises or intermediary organizations and are aimed at installing a dialogue with other actors so that to collect new, innovative ideas which may be applied to a company’s business model or, alternatively, also used to solve an organization’s problems (Meyer, D. J.-U, 2019). In Germany, the augmented trend of Open Innovation is therefore probably due to the increasing presence of Open Innovation platforms, which have been established mostly in the last decade.

In 2016, the Hannover Chamber of Industry and Commerce has published a report in which the 20 main Open Innovation Platforms present in Germany are listed. Each one differs for area of competence, region, management, funding and target. In the table below, four of them will be reported as examples: on the one hand, two platforms are managed by associations, on the other hand, by enterprises (Table 2).

0 100 200 300 400 500 600

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Open Innovation Trend in Germany (2001 - 2016)

Open Innovation Trend

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12 Open

Innovation (OI) Platforms

Management Functioning

Invention Store Transfer Allianz (Association for knowledge and technology transfer)

It enables access to technologies and technological processes made available by German Research Institutions. These technologies are already patented and consultable by enterprises to solve particular problems.

The Venture Förderkreis

GründungsForschung (Association for Founding Research)

It gathers unused patents from different enterprises, as well as ideas coming from different subjects, launching a “contest”

concerning their possible implementation.

The inventor of the best idea wins 1-3 years of licence for the patent in question.

IPlytics Iplytics GmbH It contains information concerning technological and patent market trends which can be consulted by enterprises so that to foresee how the implementation of a new technology on the market would be.

This reduces the level of risk in R&D investments.

Patent-Net Erfinderhaus Patentvermarktungs GmbH

It helps inventors to develop a strategy to make their idea implementable on the market and patentable. Moreover, it helps already patented ideas to be “recycled”

with alternative, market exploitable uses.

Table 2: OI Plaftforms (Industrie- und Handelskammer Hannover, 2016)

It can be observed that the German Open Innovation Platforms act as intermediaries which do not directly address technology transfer from one actor to another (e.g. from a research institution to industry), but rather they deal with either companies’

issues or the possible implementation of a new innovation through a share of knowledge,

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advices and ideas. In other words, with these internet-based sources companies and institutions are able to discover new market opportunities, as well as they can create new technologies and knowledge by putting together their know-how and experiences. It’s important to observe how these platforms conceive patents as a source having an endless exploitation potential: looking at the platforms, indeed, it’s possible to see how the Invention Store and The Venture offer respectively the possibility to consult patented inventions and implement unused patents. Similarly, the IPLytics uses patents trend as a source to inform companies about the level of risk in making an R&D investment. Last but not least, Patent-Net gives the opportunity to provide an alternative use for patents having lack of market potential. This trend is actually in line with a general definition of Open Innovation, where intellectual property is described as “ […] a new class of assets that can deliver additional revenues to the current business model, and also point the way towards entry into new businesses.” (H.W.Chesbroug, 2003, p.5). This means that the exploitation of patents and shared knowledge enables to create new market opportunities and develop new technologies. To conclude, it can be stated that the increasing trend of Open Innovation in Germany has been due to the augmented presence of Open Innovation Platforms which are mainly used to spread technological knowledge, gather innovative ideas and exploit patents potential.

Co-Creation

A term which is often confused with Open Innovation is the term “co-creation”.

The concept of co-creation was introduced by the business professors C.K. Prahalad and Venkatram Ramaswamy in the journal Business Harvard Review (2004). The authors describe co-creation as a relationship built between a company and a particular customer who is willing to share his knowledge and experience to create a particular product. This concept has been incorporated by the OECD in the publication Digital Innovation:

Seizing Policy Opportunities (2019) where co-creation has been re-defined as a

“collaboration in technology development” (p.69), namely a cooperation between a company and another subject, aimed at enhancing technological progress. It’s clear that the original concept of co-creation has been adapted to the contemporary needs of the digitalization era. In this context, co-creation has been moved from the simple relation between a company and a subject aimed at creating value, to the establishment of a relationship aimed at facilitating the implementation of new technologies into the market.

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The concept of co-creation has thus become more bounded to digitalization and to the new possibilities of collaboration offered by new technologies.

The concept of co-creation differs from open innovation as it has been conceived as prevalently customer-oriented and for the B2C market, aimed at providing benefits to both parties: company and customer (C.K. Prahalad, V.Ramaswamy, 2004, p.8). Co- creation can be passive when the customer is only allowed to give feedbacks about a company’s products (e.g. through a company’s e-mail or website), whereas it is active when the customer gives ideas that the company uses to improve or modify its products.

Co-creation offers therefore not only the possibility to monitor consumers’ buying behaviours but also to enhance a company’s performance. In Germany, co-creation is also conceived as an instrument to manage the relationships with customers, develop new ideas, enhance the customers’ loyalty and diminish the risk of market failure. However, in Germany co-creation is not restricted to the customer orientation, but it foresees also the collaboration of other companies, experts and even employees who are welcomed to express their feedback about a company’s projects, products or ideas (Share Dnc Blog, n.d.). The biggest platform in Germany enabling co-creation is the Innovation Management Software, namely an internet-based platform implemented by the company

“Innolytics GmbH”, a German company founded in 2016 in Munich (Figure 4).

Figure 4: Innovation Management Software - Homepage

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In the Innovation Management Software, the section “Platforms” enables a subject to create or take part to many co-creation platforms which have been implemented by companies in different German cities (e.g. Pleinfeld) and cities outside Germany (e.g.

Bari, Chenzou). Each co-creation platform entails different projects opened for discussion and sharing of new ideas. The section “Discussions”, indeed, contains all the projects and ideas proposed by the different companies, where it’s possible to write comments and discuss about the idea. In the section “Ideas” instead, it’s possible to enter a new ideas or project, as well as to participate in another project. As a result, companies are able to efficiently structure ideas, innovation and digitalization management. Moreover, the aim of the platform is not only invite other companies, but also customers, to participate in implementing projects (Meyer, D. J.-U. 2019).

Basic Research VS Applied Research

In order to understand how companies carry out research activities, it’s important to clarify the difference between “basic research” and “applied research”. The distinction between the two terms is useful to understand the different tasks carried out by the various research organizations present in Germany as, for instance, the Fraunhofer Institute and the Max Planck Institute.

The aim of basic research is basically to expand the existing knowledge through the achievement of new knowledge. This type of research is intended to provide an answer to questions involving subjects, reasons and methods in order to enhance the comprehension of some key principles. The nature of basic research can be defined as purely theoretical, as it studies the way in which things work, considering not a specific, but rather a wider scope. This results in the creation of new products, measures and technologies. One main point that differentiate basic research from applied research is the fact that basic research is not aimed at any particular business goals: in other words, services, commodities or transactions concerning business objectives do not fall into the sphere of interest of the basic research. However, it is fundamental to remember that even if basic research cannot be used to find solutions to real or future problems, this type of study is essential to make a prediction about how future phenomena or scenarios may look like. Basic research is indeed frequently defined as “curiosity-driven”, where motivation is the main conductor that changes according to the intentions of the researchers. As previously said, basic research findings do not directly concern the

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economic or scientific sphere, nor are always immediately usable, but their exploration of unknown topics enables the creation of scientific revolutions. As a result, basic research is the bedrock of applied research (Campus Office of Undergraduate Research Initiatives, n.d.).

The aim of applied research is instead to find a proper explanation to specific inquiries and practical issues. Indeed, the acquisition of knowledge which results from applied research is aimed at figuring out problems related to the real commercial or scientific world. In other words, the main achievements of applied research are bounded to particular business goals, namely services, commodities or transactions (G. Balinggan, 2018). The key word which distinguish the two research approaches is the word

“specific”: if the basic approach has a broad, extensive scope, the applied approach presents a definite, precise goal. Applied research nature can be defined as purely practical, as it contributes to the creation of new products, measures and technologies (Campus Office of Undergraduate Research Initiatives, n.d.). Indeed, it can be stated that the association of applied research with technology and economy is stronger if compared to the basic one: applied research is defined as “client-driven”, where the real-world needs are at the core of the investigation. The result of the whole process is the formation of new key inquiries, which are further explored with basic research (G. Balinggan, 2018).

In this regard, it should be noted that basic research and applied research seems to be mutually deeply interconnected, as they create a circle of benefits exploitable by both sides. On the one hand, applied research allows to have experimental data usable as instruments by basic research to look for new hypotheses and theories. On the other hand, the new theories are used by applied science to enhance or come up with new technologies, mechanisms or programmes, whose results and data are exploited again by basic research for further studies and exploration.

Digitalization

Digitalization represents something which has changed the conceptualization of research and technology transfer in Germany. Digitalization is also called “digital transformation”, where the word “digital” refers to the pace of change which is occurring in our world these last years, fuelled by the rapid adoption of technology. The concept of

“digitalization” refers to the extended presence of digital devices in the daily life, which is rapidly and continuously spreading worldwide. This digital change, which affects also

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the working environment, occurs through the augmented introduction of new information and communication technologies (ITC). In this regard, it should be pointed out that digitalization has changed, among others, both the way of communicating as well as the purchase behaviours. For this reason, digital transformation entails modifying an entire organization in order to be able to cope with current challenges and changes concerning – and required by – digital technologies. These modifications, which are continuously brought about by digitalization, regard not only the working structure and the internal organization of a company, but also the same employees, who need to adapt to a new working reality, machineries and technologies. Moreover, another big consequence of digitalization is the creation of new jobs and new business opportunities (KOFA Fachkräftesicherung für KMU, 2018).

Digitalization entails two main components: the digitalization of the products and the automation of procedures. The first component of digitalization makes possible the acquisition of a complete digital definition for the produced goods. This process requires a process of standardization to maintain all the produced goods – as well as the employees who contribute to their manufacturing – on the same pace. At the same time, digitalization and the consequent process of standardization enable the exploitation of an unambiguous source of truth (i.e. the digital source) in order to make the right decision necessary to solve diverse types of issues which may occur in a company. The second component of digitalization is about the execution and automation of processes and procedures; these includes design release, approvals of tasks, management and processes change. One can say that there’s an interaction between the two components: the digital definition is used by digital processes to be the right information one should be making decisions based on.

On the other hand, the digital processes affect, modify, mature the digital definition over time, making it more accurate and complete. Digitalization has been possible thanks to the born of industry 4.0, which has allowed new technological devices to come into existence (Lifecycle Insights, 2019).

Industry 4.0, CPS and IoT

Industry 4.0 can be defined as a combination of machines, materials, locations and companies, which are hold together by advances in IT and affect a company’s production, resources and internal – external organization (Ludwig et al.,2016, p.2). The fourth industrial revolution has deeply changed the techniques of production, organization and

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labour force, leading to the creation of new business models. The concept of industry 4.0 has been developed in Germany in the 21^st century and its aimed at making companies as part of a dynamic network, which is real-time optimized and lead to high value creation.

In Germany, the Federal Ministry for Economic Affairs and Energy (Bundesministeriums für Wirtschaft und Energie or BMWi) and the Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung or BMBF) have been the two principal figures which has prompted the introduction of industry 4.0, and which continue to support its development through the introduction of new innovation policies. The fourth industrial revolution is indeed definable as the foremost element composing the German’s Innovation strategy, which it is aimed at enhancing the country’s position as competitor and industrial power (BMBF, 2019). Thanks to this revolution, companies are able to cope with the new challenges of digitalization, which, as we have previously said, entail not only new devices and technology but also a new way of communicating, purchasing, relating with other people. With the revolution of industry 4.0 companies become more flexible and open to new innovations, as well as ready to easily deal with new customers’ requests and purchasing behaviours. Another major point concerns the fact that industry 4.0 gives to industries and organizations the instruments to efficiently manage their enormous quantity of available data and information. The abovementioned flexibility, which has started off to characterize companies thanks to the industrial revolution, lead to have autonomous systems of production, where the digital and the real world are interconnected. This way, information can be easily and efficiently exchanged among production units, supply chain and the various departments: this contributes also to augment the production quality (agiplan, Fraunhofer, ZENIT, 2015).

Industry 4.0 is characterized by the presence of the so-called CPS or Cyber Physical Systems, which are “Complex information processing systems that actually integrate with their environment […] They are integrations of computation, networking and physical processes” (Gilchrist, 2016, p.24). Therefore, CPS are a set of systems containing different information, namely an agglomeration of information. They serve not only to store data but also to use them in order to supervise the physical processes which occur in the environment. Moreover, since CPS are capable of being automatized, they can also interact one with another as they dispose of sensors which make them capable of self-regulation and control. More precisely, they collect information from the physical processes and, thanks to the help of Internet, make them available online where they can be easily consulted, evaluated or shared. Consequently, the production plants

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based on Internet technology are able to control autonomously the flow of goods, materials and information (Ludwig et al.,2016). However, these big data, namely the massive amount of information which from different sources, must to be necessarily handled by specific processors and databases. Specifically, this job is carried out nowadays thanks to the Internet of Things (Müller, Hopf, 2017, p. 1496).

The term “Internet of Things” indicates an enormous system where all the technological devices are connected and are able to gather and share data not only about their functioning, but also about the environment where they are used. This process can be done thanks to sensors which are contained in every physical device (e.g. a smartphone, a tablet) and which produce data about the device functioning. The IoT represents, therefore, the common platform where all the information coming from the devices sensors can be stored and managed. This platform allows all the devices to communicate one with another, creating one common language of communication.

Moreover, the IoT system guarantees a safe storage of the data, which will be analysed and from which useful information will be taken, as well as shared with other devices, in order to improve the user experience (Edureka, 2018). To sum up, the IoT indicates the enormous and enlarged informatic base upon which the CPS networking originate and the communication among actors take place. As a consequence, the idea of industry 4.0 conceptualize the application of the IoT system in industry, which is carried out thanks to the use of CPS (Müller, Hopf, 2017, p. 1496).

There are four main features which characterize industry 4.0 (Gilchrist, 2016, p.

76): vertical integration, horizontal integration, the “through engineering” concept and an acceleration in the manufacturing process.

Firstly, vertical integration is traditionally defined as a strategy where an organization fully controls the processing concerning its products, either their manufacturing or transportation (MBA Crystal Ball, 2018). The vertical integration of

“smart” production systems is a necessary requirement of industry 4.0 as all the components (i.e. factories, products and systems of production) need to be networked and controlled by the company. The word “smart” refers to the embedment of CPPS (Cyber- Physical Production Systems) namely instruments enable companies to handle the encountered market variables and eventual in-site problems in a fast and efficient way (Ludwig et al., 2016, p.3). CPPSare smart production systems which allow to overcome the challenges of production, trying to fill the eventual gaps with available data and technologies. The vertical integration of industry 4.0, however, concerns not only the

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smart production system but, as already abovementioned, also the products transportation, the marketing strategy and the customization of the product.

The second feature which characterize industry 4.0 regards the horizontal integration strategy, where horizontal integration is traditionally defined as a strategy where a company acquires other business activities, whose own an equal value chain. The horizontal integration in industry 4.0 is carried out through the creation of globally networked relations: this implies not only the simple interrelation with other companies and clients, but also the constant discovery of new business models, which can be studied and eventually incorporated (MBA Crystal Ball, 2018). It’s clear from the first and second characteristics that industry 4.0 merge both horizontal and vertical strategies, allowing industries to keep pace with the continuous technological changes.

A third characteristic of industry 4.0 concerns the “through engineering”, namely the possibility to manage and trace a product not only during its manufacturing but also after its selling on the market (Gilchrist, 2016, p. 200). In this regard, the introduction of IoT and technological devices imply also that a customer is able to receive an efficient after-sales assistance after having purchased a company’s product, as nowadays the concept of quality and the clients’ feedbacks have gained a relevant weight as compared to the past. Indeed, customers’ feedback may be a really useful basis to further improve the quality of the products.

Lastly, industry 4.0 features a manufacturing process which is more and more accelerated, thanks to the constant introduction of modern and innovative technologies.

In other words, the fourth industrial revolution makes use of the technological improvements and innovations for the purpose of augmenting the efficiency of automation and digitalization in the course of production. The final scope is to have the complete control over the manufacturing process and the value chain (Ludwig et al., 2016, p.6).

Innovation Policy

In the light of the above it can be stated that digitalization offers thousands of opportunities to companies, and this may consequently improve the quality of life of a country. However, these improvements are possible only if the innovation policy system of a country works in an efficient way, fostering innovation, R&D and technology transfer.

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The term “innovation policy” represents an ensemble of measures and initiatives which regard R&D, technology and industry. In Germany, these measures are the instruments through which the Federal government support technology transfer from research to industrial application. The government can indirectly or directly promote innovation: on the one hand, it fosters a favourable economic framework through the promotion of an advanced education system and a strong economic, financial and legal system (indirectly). On the other hand, the government may promote projects and provide funding for the implementation of such projects (directly). In order to have an efficient innovation policy, the government initiatives should be aimed at providing a robust framework, namely a solid structure which conditions can be suitable to accommodate the new technological developments (Wirtschaft und Schule, n.d.). Moreover, a strong innovation policy should not only take into consideration the promotion of technological innovation, but also the development of new business models which are necessary for enterprises and organizations in general to better handle the ongoing technological changes. Germany presents an innovation-friendly environment, as companies have adapted to the ongoing technological changes, fostering R&D in order to keep pace with these changes. According to the BMWi, almost 3% of the State GDP is devoted to R&D, which enable a hundred thousand German enterprises to place technological innovations on the market. This allow Germany to be one of the strongest exporters of technological products worldwide. However, it hasn’t always been as such: indeed, until the 19^th century Germany had difficulties to catch up with other European potentials as France and UK.

What had really boosted the German Innovation System was the creation of specific and precise measures aimed at fostering innovation policy taking into consideration industry and education at the first place (Mai, 2019, p.2).

The economic politician Ferdinand von Steinbeis (1807 – 1893) represented a crucial figure for the German innovation system. Indeed, Steinbeis underlined the necessity to welcome and take inspiration from other countries, adapting this stimulus to the German model. In particular, Steinbeis was the first one who underlined the importance of technology transfer, free commerce, research infrastructures and education in Germany (Mai, 2019, ibidem). Nowadays, these topics are included in the different departmental areas forming the German Innovation policy, namely: economics, education, media, mobility, science and technology. However, since there are many overlaps concerning the competent subjects who have to handle these different areas, the

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respective regional and governmental areas of competence have to be clearly established.

This means that a great level of coordination between regions and government is needed.

In this respect, a modification in the article 91b of the German Basic Constitutional Law has been made in 2015, so that to improve the cooperation between the Regional and the Federal level. The renewed article 91b foresees the cooperation of the State and the Länder in education, R&D and funding (BMBF, 2019c). The two tables below show the modifications carried in 2015: the versions are reported both in German (Buzer.de, 2015) as well as in English (Deutscher Bundestag, 2019).

Bund und Länderkönnen auf Grund von Vereinbarungen in Fällen überregionale Bedeutung zusammenwirken bei der Förderung von:

1. Einrichtungen und Vorhaben der wissenschaftlichen Forschung außerhalb von Hochschulen;

2. Vorhaben der Wissenschaft und Forschung an Hochschulen;

3. Forschungsbauten

an Hochschulen einschließlich Großgeräten.

Vereinbarungen nach Satz 1 Nr. 2 bedürfen der Zustimmung aller Länder.

Bund und Länderkönnen auf Grund von Vereinbarungen in Fällen überregionaler Bedeutung bei der Förderung von Wissenschaft, Forschung und Lehre zusammenwirken.

Vereinbarungen, die im Schwerpunkt Hochschulen betreffen, bedürfen der Zustimmung aller Länder. Dies gilt nicht

für Vereinbarungen über

Forschungsbauten einschließlich Großgeräten.

Table 3: Article 91b – Old and new version in German (Buzer.de, 2015)

The Federation and the States Ländermay, pursuant to agreements, cooperate in cases of supra-regional importance to promote:

1. Institutions and projects of scientific research outside of universities;

2. Projects of science and research at universities;

The Federation and the Ländermay, pursuant to agreements, cooperate on the basis of agreements in cases of supra- regional importance in the promotion of sciences, research and teaching.

A study of Innovation Policies for Technology Transfer in Germany Uno studio sulle politiche dell'innovazione per il trasferimento tecnologico in Germania

Università degli Studi di Modena e Reggio Emilia D

C ORSO DI L AUREA M AGISTRALE IN

L ANGUAGES FOR COMMUNICATION IN INTERNATIONAL ENTERPRISES AND ORGANIZATIONS

A study of Innovation Policies for Technology Transfer in Germany

Uno studio sulle politiche dell'innovazione per il trasferimento tecnologico in Germania

Prova finale di:

Chiara Brigliano Relatore:

Margherita Russo

Correlatore:

Giovanni Bonifati

Anno Accademico 2018/2019

Abstract

Abstract

Abstract

Contents

Introduction

Chapter 1: Industry 4.0 and digitalization in Germany