Saxony

Region

Introduction

The Free State of Saxony, located in the south-east of Germany, is one of the sixteen federal states. It borders the federal states of Brandenburg, Saxony-Anhalt, Bavaria and Thuringia as well as Poland to the east and the Czech Republic to the south. With 4.081m inhabitants in 2017, accounting for 4.9% of the German population, it is the sixth most populous region in the country. Its surface area is 18,420km² and its population density is 221 inhabitants per km² (Eurostat, 2018). About 30% of its population lives in the three largest cities, namely Dresden, Leipzig, and Chemnitz. The capital city is Dresden.

Saxony’s economy is characterised by a strong industrial sector specialised in the automobile industry, machine construction, metal production and electrical/ microelectronics.

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Economy

Socio-economic profile:

In 2016, the regional gross domestic product (GDP) in Saxony was €118.9b, accounting for about 3.8% of the German GDP (Eurostat, 2018). In terms of growth, the regional average growth rate between 2008 and 2016 was 3.0%, above the German level (2.6%) and above the European one (1.7%) (Eurostat, 2018). The regional GDP per capita, expressed in purchasing power standards reached €27,500, in 2016, amounting to 76.4% of the German average (2016: €36,000) (Eurostat, 2018).

In 2016, Saxony has exported the equivalent of €41.4b which represent 4.1% of the total exports in Germany. This rate ranges in the middle of the German regions in terms of exports (Statistisches Bundesamt, 2018). The economically active population in 2017 amounted to 2.0m, 4.8% of the national total (Eurostat, 2018). Most employees work in services (68.5%), while 30.2% work in industry and only 1.3% in the agricultural sector, indicating a slightly above average focus on industry compared to the national averages (71.3%/27.4%/1.3%) (Eurostat, 2018). In 2017, unemployment in Saxony, at 4.4%, was relatively high when compared to other German regions (3.8%) (Eurostat, 2018). Despite an overall substantial downward trend from 8.2% in 2012 unemployment in some districts still exceeds 10% (Eurostat, 2018).

The Saxon business sector is characterised by an above average share of SMEs not only in the service sector but also in the manufacturing sector. The most important industrial branches, in terms of their share of regional turnover, are the automobile industry (27%), machine construction (12.7%), the metal production sector (12.4%), as well as electrical/microelectronics sector (11.8%) (Business Saxony, 2018).

Research, Development & Innovation

RTDI profile:

In terms of RTDI, Saxony is leading amongst the former East German regions but lagging nationally. In 2015, the gross expenditure on research and development was 2.7%, slightly below the national average (2.82%), but well above the European one (2.04%) (Eurostat, 2018). Its RTDI sector is public-oriented by German standards. In, 2015, the share of regional business expenditure on R&D amounted to 43.5% (€1.3b) compared to 68.7% for the national average (Eurostat, 2018). Likewise, the region’s overall expenditure on R&D contributes by 3.5% (€3.1bn) to the German total which is in line with the region’s share in GDP (3.7%) (Eurostat, 2018).

Similarly, the number of EPO patent applications per 100,000 inhabitants (9.3 in 2012) remains significantly below the German average (23.03). The share of employment in high-tech industries and knowledge-intensive services amounted to 3.7%, notably below the national average of 4.1% (2016) (Eurostat, 2018).

The region hosts one of the nation’s most renowned technical universities, the Dresden University of Technology (TU-Dresden), one of Germany’s twelve Universities of Excellence with a notable focus in technical fields and natural sciences. The main fields are: natural sciences and mathematics, civil and environmental engineering, engineering sciences, humanities and social sciences, and health.

In Saxony, there are four state universities, an institutionally separate graduate school, five state universities of applied sciences, five state universities of Arts and seven “Studienakademie” (Studieren in Sachsen, 2018). Around 50 non-university research institutes operate in Saxony among them features four Helmholtz facilities, six institutes of the Max Planck Society, fourteen institutes of the Fraunhofer Society, eight institutes of the Leibniz Association, a branch of one such institute as well as six institutes funded from the regional level (Ausseruniversitäre Forschung, 2018).
Despite a large array of higher education and research institutions, only 31.8% of 30-34-year olds had attained tertiary education levels in Saxony (2017), a figure below the German average (34.0%) and well below the European average (39.9%) (Eurostat, 2018). Moreover, only 3.8% of the working people are employed in the high technology sector which is lower than the national average (4.1%) and the European average (4.0%) (Eurostat, 2018).

Three highly cross-sectoral topics stand out in terms of innovation: electro-mobility, lightweight engineering and organic and flexible electronics (Business Saxony, 2018). In Saxony, several platforms or infrastructures supporting innovation can be found. The incubators contribute towards the competitiveness of the development and growth of young enterprises in the region. Amongst them, the Technology Centre Dresden (TechnologieZentrumDresden, TZD), founded in 1990, is one of the largest German technology centres. The TZD provides customised infrastructure and services for innovative start-ups as well as SMEs. The Technology Centre Chemnitz (Technologie Centrum Chemnitz, TCC), offers a mix of creative spaces and professional workplace as well as an excellent infrastructure, combined with consulting and general assistance. The TCC’s four locations host some 70 companies today.

Meanwhile Chemnitz hosts the Smart Systems Campus, a technology park that focuses on microsystems technology and brings together science, research, and industry actors. The BIO CITY LEIPZIG houses an innovation incubator where researcher and entrepreneurs work together in the fields of biotechnology and biomedicine. The BioInnovationCenter Dresden (BioInnovationsZentrumDresden, BioZ) has a specific focus on molecular bioengineering, which also brings together scientists and young professionals in the field. A further 13 technology centres exist in the region.

Regional Innovation Scoreboard results

Latest Regional Innovation Scoreboard results:

The Regional Innovation Scoreboard (RIS) result analysis of the Free State of Saxony (NUTS1) was realised at the district level (NUTS2). Saxony is composed of three districts: Dresden, Chemnitz and Leipzig. According to the Regional Innovation Scoreboard 2017, the three districts are characterised as “Strong Innovator”. Leipzig has held this ranking since 2008. In Dresden and Chemnitz, the innovation performance has decreased over time.

According to RIS 2017 both Dresden and Leipzig are outstanding regarding expenditure on R&D in the public sector and international scientific co-publications. Dresden presents 154% of the German average and 174% of the European average and Leipzig presents 131% of German average and 148% of the European average, regarding the expenditures on R&D in the public sector. The International scientific co-publications amount to 135% of the German average and 141% of the European average in Dresden and 140% of the German average and 146% of European average in Leipzig.

Chemnitz’s particular strengths in the RIS 2017 included innovative SMEs’ collaboration where the district is doing excellent (normalised score: 0.617) as well as regarding non-R&D innovation expenditures (normalised score: 0.354). Specific weaknesses are public-private co-publications presenting 42% of the German average and 50% of the European average as well as International scientific co-publications, presenting 54% of the German average and 57% of the European average.

In Dresden and Leipzig, with regards to RIS 2017, trademark applications and design applications can be identified as weaknesses. In Dresden, trademark applications reach 66% of the German average and 70% of the European average, and the design applications reach 61% of the German average and 64% of the European average. In Leipzig, the trademark applications amount to 67% of the German and 71% of the European and the design applications 59% of the German average as well as 62% of the European. In Leipzig, R&D expenditures in the business sector could be identified as a weakness, reaching only 37% of the German average and 46% of the European average.

Governance

Governance profile:

The governance of the innovation ecosystem of Saxony is characterised by a multilevel governance. Saxony is one of the 16 federal states in Germany. As a federal state, the region has substantial autonomy with regard to legislation and tax-raising powers as well as a say in some matters of federal policy. The German Basic Law gives the states considerable say in R&D policy. This is particularly the case for higher education policy, where each state independently enacts its own legislative framework.

At the regional level the research, technological development and innovation (RTDI) policy is designed by the Saxon State Ministry of Science and Arts (SMWK) as well as by the Saxon State Ministry for Economic Affairs, Labour and Transport (SMWA). The SMWK is mostly responsible for issues of higher education and public research, i.e. notably the basic funding of such institutions as well as the development and planning of the necessary facilities. The SMWA covers innovation and technology policy support measures, with the main focus on SMEs, craft work and the industry. In contrast to the SMWK, which decides about capacity-building in public research and higher education, the SMWA influences RTDI development indirectly through support programmes. The SMWA is also responsible for the managing the structural and ERDF programme.

R&D support financed from the regional budget is typically allocated by the Development Bank of Saxony (SAB). The SAB offer different funding programmes for private persons, enterprises, public customers as well as associations. Another project is the futureSAX, an initiative of the Saxon State Ministry of Economic Affairs, Labour and Transport. futureSAX is for both high-growth companies with a strong market position as well as high-potential start-ups. It provides the Ecosystem with innovation and growth support in Saxony. It has been initiated in order to transform the Free State of Saxony into one of the top 10 most innovative and commercially strong regions in Europe.

Also worth mentioning is the state-owned company Economic Development Saxony (Wirtschaftsförderung Sachsen GmbH, WFS). Since 1991, when it was founded it has mainly been active in three areas. The fields of responsibility are: to promote for the region of Saxony, provide advice to potential investors from the idea to the realisation of an inward investment project and to support companies in Saxony, with issues regarding export and initiating cooperation with companies outside Saxony. The aim is to open up new sales opportunities and to create new job opportunities.

Policy

Policy trends profile:

The regional innovation policy is shaped by three different frameworks:

At the European level, the ERDF/ESF 2014-2020 OP and the Regional Innovation Smart Specialisation Strategy (RIS3);
In 2014, the Federal Cabinet adopted a new German High-tech Strategy entitled "Innovation for Germany". The Federal Government and the Länder consult with each other in describing and presenting the various relevant programmes and measures;
At the regional level, the strategy towards a modern and innovative economy is described in one major document Innovation strategy Saxony, from 2013.

The current innovation strategy “Innovation Strategy of the Free State of Saxony”, from September 2103, presents seven main objectives:

Growth through strengthening the innovation capacity and performance of the existing companies;
Creation of new companies;
Creating competitive jobs;
Expanding the science sector and increasing the use of research results in the Saxon economy;
Increasing the educational level;
Securing the access to specialists; and
Strengthening the innovative forces throughout the society.

In order to reach these goals the Free State of Saxony supports a modern and innovative economy, science and efficient cooperation as well as human capital. The state has also defined special fields, which have a high potential in the region:

Environment and resources;
Energy;
Raw materials;
Mobility;
Health and nutrition; and
Digital communication

The defined fields in the innovation strategy are similar to the ones presented in the RIS3, which are as follows:

Advanced production technologies;
Biotechnology;
ICT and digital communication;
Microelectronics including organic and polymer electronics;
Nano-technology;
New materials; and
Photonics

In the Innovation strategy five cross-sectoral and cross-technology approaches can be found, which have a significant value for the region, the following areas have been defined:

Endogenous growth by means of cross-sector and cross-technology orientation;
Crystallisation points for growth and employment;
Key Enabling Technologies (KETs);
Traditionally strong Saxon sectors as innovation leaders;
Interconnection between products and services.

Activities linked with Advanced Manufacturing

Activities linked with Advanced Manufacturing:

Saxony’s industrial sector remains characterised by a broad basis of SMEs, larger firms as well as a number of newer high-technology firms that have grown in and around the region’s semiconductor cluster Silicon Saxony. The high-tech network Silicon Saxony has more than 320 members from Saxony, it is Europe’s largest microelectronics cluster and one of the world’s most innovative ICT clusters, regarding technical competence. A leading edge cluster in Silicon Saxony is the Cool Silicon, the core competences are micro- and nanoelectronic technology, which are a key sectors in modern ICT.
Therefore, there is a healthy mix of traditional sectors using high-technology production methods as well as some genuine high-tech fields, notably in the production of semiconductor equipment. Bosch continues to invest in Germany and is about to build a wafer fabrication in Dresden, where key technology for the internet of things will be produced, in order to satisfy the increasing demand. Bosch intends to collaborate closely with local companies as well as Silicon Saxony.

Universities and institutions in Germany are also involved in researching about alternative drive systems. Chemnitz University of Technology is one of them whilst in Dresden Volkswagen is assembling some of its most high-profile models with modern techniques in the Transparent Factory (Gläserne Manufaktur), the goal is to be a pioneer in electro-mobility and mobility solutions of the future.

One of the Competence Centre 4.0 is located in Chemnitz. The centre supports small and medium-sized enterprises in Saxony, when it comes to recognising the technological and economic potential of digitalisation, networking and concrete applications of Industry 4.0. The companies can take advantage of entrepreneur forums, theme days and online information services, on-site training, online seminars and support when implementing projects.

Complete Regional Profile

Economy

Research, Development & Innovation

Latest Regional Innovation Scoreboard results

Governance

Policy

The regional innovation policy is shaped by three different frameworks:

At the European level, the ERDF/ESF 2014-2020 OP and the Regional Innovation Smart Specialisation Strategy (RIS3);
In 2014, the Federal Cabinet adopted a new German High-tech Strategy entitled "Innovation for Germany". The Federal Government and the Länder consult with each other in describing and presenting the various relevant programmes and measures;
At the regional level, the strategy towards a modern and innovative economy is described in one major document Innovation strategy Saxony, from 2013.

The current innovation strategy “Innovation Strategy of the Free State of Saxony”, from September 2103, presents seven main objectives:

Growth through strengthening the innovation capacity and performance of the existing companies;
Creation of new companies;
Creating competitive jobs;
Expanding the science sector and increasing the use of research results in the Saxon economy;
Increasing the educational level;
Securing the access to specialists; and
Strengthening the innovative forces throughout the society.

Environment and resources;
Energy;
Raw materials;
Mobility;
Health and nutrition; and
Digital communication

The defined fields in the innovation strategy are similar to the ones presented in the RIS3, which are as follows:

Advanced production technologies;
Biotechnology;
ICT and digital communication;
Microelectronics including organic and polymer electronics;
Nano-technology;
New materials; and
Photonics

In the Innovation strategy five cross-sectoral and cross-technology approaches can be found, which have a significant value for the region, the following areas have been defined:

Endogenous growth by means of cross-sector and cross-technology orientation;
Crystallisation points for growth and employment;
Key Enabling Technologies (KETs);
Traditionally strong Saxon sectors as innovation leaders;
Interconnection between products and services.

Activities linked with Advanced Manufacturing

Repository

Support Measures

Policy Documents

Organisations

European Commission - Internal Market, Industry, Entrepreneurship and SMEs

Saxony

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Economy

Research, Development & Innovation

Latest Regional Innovation Scoreboard results

Governance

Policy

Activities linked with Advanced Manufacturing