The name is absent

Table 1: Share spent on R&D expenses as a percentage of total sales return
in companies in Eastern and Western Germany

1 (2) including (excluding) West-Berlin

It can be seen that the investment in R&D bears fruits. 32.1 % of all companies
that are committed to R&D compete predominantly with products and services
that they introduced less then three years ago to their assortment. Among
companies that are not involved in R&D one can observe that the share of
those with such a modern assortment is significantly lower (18.6 %). Regional
differences can also be emphasised: The share of companies involved in R&D
with mainly new products and services is in Eastern Germany (46.2 %) signifi-
cantly higher than in Western Germany (30.5 %). These results indicate that
research activities have enabled these companies, in particular those in East-
ern Germany, to introduce new products on a successful commercial basis.

Despite these positive signs of innovation performance the Fraunhofer Institut
et al. still sees a 'technologic gap´ in the Eastern German economy in com-
parison to that of the Western federal states (BMBF 2002, p. 47). One should
not underestimate the fact that companies in Eastern Germany on average
have not yet attained the competitive level reached in Western Germany. As
the Federal Statistics Office pointed out for the year 1999, the so-called `new
federal states´ in the Eastern part of Germany are still lagging behind and show
a productivity that hardly comes up to 65 % of the Western German level
(STATISTISCHES BUNDESAMT 1999). Estimations on the basis of our inquiry
suggest a similar difference for 2000 and for the first half of 2001. The state-
ments given by the companies confirm this. Only 38.9% of those located in
Eastern Germany saw themselves in an average competitive position or in an
even better position compared to other companies of the same branch. Among
the companies in Western Germany this share comes to 50.8 %. This indicates
that the Eastern German economy is still on its way to recovery from the trans-
formation process that started with the collapse of the communist regime and
the establishment of a free-market economy. But it has to be pointed out that

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