Economic relevance and the future potential of non–R&D–intensive industries

Abstract

This book chapter focuses on non–R&D–intensive industry sectors and analyses their economic importance for Germany. Therefore we compare non–R&D–intensive industry sectors with R&D–intensive–industry–sectors and service sectors regarding R&D activities, domestic value added and import intensity, production, employment and skills. In order to not only include direct effects for these indicators we also analyze indirect effects via input–output (I/O) analysis by simulating the potential effect additional 1 billion euros demand impulse in the various sectors. On the one hand, our results show that the dynamics of non–R&D–intensive industries is less than that of the R&D–intensive industrial sectors. Moreover, R&D–intensive industries are found to contribute more to the employment of highly skilled professionals. On the other hand, our potential analyses show that non–R&D–intensive industries are of significant economic importance to Germany. This importance is evident based on a number of macroeconomic indicators: non–R&D–intensive industries are associated with strong indirect employment effects that also include qualified personnel. Overall, the analysis shows that the consideration of indirect macroeconomic effects is important to con–ducting an appropriate analysis of the role of non–R&D–intensive industries. Non–R&D–intensive companies have profound effects on upstream economic sectors through their spending on intermediate inputs (including business–related services and engineering). Policymakers should consider those linkages in determining an adequate selection of measures.