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April 25, 2005

GERMANY: German suppliers transfer R&D outside of Europe – study

German suppliers are transferring R&D outside of Europe according to a new study by Booz Allen Hamilton. By 2007 the report’s authors estimate that 29% of their R&D expenditure will be outside western or central Europe, compared with 17% today.

German suppliers are transferring R&D outside of Europe according to a new study by Booz Allen Hamilton. By 2007 the report’s authors estimate that 29% of their R&D expenditure will be outside western or central Europe, compared with 17% today.

Suppliers are responding to the pressure to speed up development times and reduce costs.
It is also part of a major investment that German suppliers are making in R&D, as OEMs outsource more and suppliers take on more responsibility as development process. “It is not enough for suppliers to just focus on continuous improvement as a way of improving their innovation performance,” said Christian Koehler, an automotive expert with Booz Allen Hamilton.

Some 250 companies were surveyed and said that they planned to increase R&D activities in the USA, eastern Europe, China and India. The study also identified a trend towards involving tier two suppliers more closely in development projects.

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