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ANNUAL REPORT 2014 the CREATIVE POWER of LIGHT Ladies and Gentlemen

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ANNUAL REPORT 2014 the CREATIVE POWER of LIGHT Ladies and Gentlemen Fraunhofer-Gesellschaft With its clearly defined mission of application- oriented research and its focus on key technol- Research of practical utility lies at the heart of all ogies of relevance to the future, the Fraunhofer- activities pursued by the Fraunhofer-Gesellschaft. Gesellschaft plays a prominent role in the German Founded in 1949, the research organization and European innovation process. Applied research undertakes applied research that drives economic has a knock-on effect that extends beyond the development and serves the wider benefit of direct benefits perceived by the customer: society. Its services are solicited by customers and Through their research and development work, contractual partners in industry, the service the Fraunhofer Institutes help to reinforce the sector and public administration. competitive strength of the economy in their local region, and throughout Germany and Europe. At present, the Fraunhofer-Gesellschaft maintains They do so by promoting innovation, strengthening 66 institutes and research units. The majority of the technological base, improving the acceptance the nearly 24,000 staff are qualified scientists and of new technologies, and helping to train the engineers, who work with an annual research urgently needed future generation of scientists budget of more than 2 billion euros. Of this sum, and engineers. 4 around 1.7 billion euros is generated through 01 2 contract research. More than 70 percent of the As an employer, the Fraunhofer-Gesellschaft offers Fraunhofer-Gesellschaft’s contract research its staff the opportunity to develop the profes- revenue is derived from contracts with industry sional and personal skills that will allow them to and from publicly financed research projects. take up positions of responsibility within their Almost 30 percent is contributed by the German institute, at universities, in industry and in society. federal and state governments in the form of base Students who choose to work on projects at the funding, enabling the institutes to work ahead Fraunhofer Institutes have excellent prospects of on solutions to problems that will not become starting and developing a career in industry by acutely relevant to industry and society until five virtue of the practical training and experience they or ten years from now. have acquired. International collaborations with excellent research The Fraunhofer-Gesellschaft is a recognized non- partners and innovative companies around the profit organization that takes its name from ANNUAL REPORT 2014 world ensure direct access to regions of the great- Joseph von Fraunhofer (1787–1826), the illustrious est importance to present and future scientific Munich researcher, inventor and entrepreneur. THE CREATIVE POWER OF LIGHT progress and economic development. www.fraunhofer.de Fraunhofer-Gesellschaft | JAHRESBERICHT ANNUAL REPORT 2014 THE CREATIVE POWER OF LIGHT Ladies and gentlemen, 2014 was yet another successful year for the Fraunhofer- Gesellschaft. The number of employees rose to nearly 24,000 and the total business volume amounted to over two billion euros, with industrial revenues at their highest-ever level. Our researchers received many prestigious national and international awards, testifying to the high regard in which our work is held by leading representatives of public adminis- tration and society. There is one outstanding reason for this continuing success: Not only do we strive to advance applied science and technol- ogies but also our own organization. In a world in which scientific knowledge, government policies and markets are undergoing constant change, it is Fraunhofer’s necessary aim to evolve and seek out new ways forward. In 2014, with this aim in mind, we reorganized our structures and processes so that they can be adapted more easily to these dynamic changes and are more suitable for an organization of our present size. Specific aspects include distribution of areas of responsibility, efficient methods, fundamental policy decisions at corporate level, and targeted portfolio management. In order to fulfill our mandate of providing industry in Germany and Europe with more immediate access to the innovative power of scientific research, we have stepped up our efforts to acquire contracts for industrial projects. The tasks of the new Executive Board function Technology Marketing and Business Models, which has been entrusted to my colleague Alexander Verl, include offering companies more system solu- tions based on highly original ideas, and working together with customers to set up large, multidisciplinary joint projects financed by a combination of public and private funding. With regard to German national research policy, we actively first non-university research institution in Germany to publish contribute to discussions concerning our key areas of expertise a sustainability report, in which we approach the subject such as digital security, resilient infrastructures, sustainable from our specific point of view. This report received high acco- energy, biotechnology and medical devices. We support the lades both in Germany and abroad, and has since been German federal government’s new High-Tech Strategy by widely copied by other organizations. participating in the associated High-Tech Forum and in the “Innovation Dialog” between the German federal government, We owe our success to the skills and motivation of our entire industry and science. In this way we aim to play a role in workforce. I would like to take this opportunity to thank them promoting value creation. for their outstanding work in the past year, and at the same time to thank our customers, the members of the Senate and The United Nations has proclaimed 2015 as the International the governing boards for their enduring confidence in our Year of Light and Light-based Technologies. It was logical work. for us to adopt this as the theme of our latest annual report, given that the name of our organization stems from Joseph Sincerely, von Fraunhofer, whose pioneering work in optical research is renowned throughout the world. A further reason is that light-based technologies play a central role in innovations derived from applied research in a wide variety of fields – ranging from test and measurement equipment to production methods and from IT to quality assurance systems. Indeed, Reimund Neugebauer one of the feature articles in this Annual Report is devoted to President of the Fraunhofer-Gesellschaft the use of light as an industrial manufacturing tool. Fraunhofer has a special affinity with the subject of sustain- able development. Our researchers have long been devoting their efforts to issues such as combating climate change, conserving natural resources, the transition to renewable energy systems, and technologies to boost efficiency. Another of our goals is to perpetuate an approach to research based on excellence that not only meets the immediate need for application-oriented solutions but also and above all has a durable impact on industrial progress. In 2014, we were the REPORT OF THE EXECUTIVE BOARD REVIEW OF FRAUNHOFER RESEARCH 8 The Executive Board 52 The creative power of light 10 Management report 2014 62 Projects and results 2014 48 Report of the Senate on the financial year 0142 84 Awards 2014 88 People in research 102 Fraunhofer Institute spin-offs FINANCIAL REPORT SERVICE 108 Balance sheet at December 31, 2014 126 Structure of the Fraunhofer-Gesellschaft 110 Income statement for the financial year 0142 128 Members, constituent bodies, 112 Reconciliation between income statement and performance committees statement (cash-basis accounting) 130 Fraunhofer Groups 114 Performance statement for individual Fraunhofer entities 131 Fraunhofer Alliances 120 Excerpts from the Notes to the financial statements 132 Addresses in Germany 123 Independent auditor’s report 134 International addresses 136 Editorial notes REPORT OF THE EXECUTIVE BOARD THE EXECUTIVE BOARD MANAGEMENT REPORT 2014 REPORT OF THE SENATE ON THE FINANCIAL YEAR 2014 THE EXECUTIVE BOARD MANAGEMENT REPORT 2014 12 Strategic development Business model Operating objectives and strategy New Executive Board function Technology Marketing and Business Models Integration and creation of new entities Sustainability Science policy framework 19 Business report Economic environment Total business volume Contract research Defense research Major infrastructure capital expenditure Fraunhofer Groups Financial position Net asset position Subsidiaries, equity investments and spin-offs International activities Intellectual property activities 40 Employees Overview Career opportunities at Fraunhofer Equal opportunities Pages 8/9 from left 44 Risk situation and outlook Prof. Dr. Alexander Verl Risk management and identified risks Outlook Prof. Dr. Reimund Neugebauer President of the Fraunhofer-Gesellschaft Prof. Dr. Alexander Kurz Prof. (Univ. Stellenbosch) Dr. Alfred Gossner 10 REPORT OF THE EXECUTIVE BOARD Summary of the Fraunhofer-Gesellschaft’s business development in 2014 2013 2014 Change Business volume in € million 2010 2060 +50 +2% Contract research 1661 1716 +55 +3% Defense research 114 118 +4 +4% Major infrastructure capital expenditure 235 226 – 9 – 4% Breakdown of expenditure in % Personnel expense ratio 50 53 +3 Non-personnel expense ratio 29 28 –1 Capital expenditure ratio 21 19 –2 Contract research funding in € million Project revenue 1200 1272 +72 +6% Industrial revenue 578 618 +40 +7% Public-sector revenue1 622 654 +32 +5% Base funding2 461 444 –17 – 4% Sources
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