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

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.