BERLIN: Brand owners in Germany boosted their innovation spending by more than 5% in 2011, but may cut back expenditure rates in 2012, new figures show.

According to ZEW, the research group, the total outlay among companies in this area – including outlay on technology, processes and products – rose by 7% in 2011 to €130bn, up from €121bn in 2010.

Looking ahead, investment levels were pegged to contract by around 1% this year, not least as a result of the financial troubles facing the Eurozone, causing a decline in corporate confidence.

ZEW suggested that major firms will be responsible for €95.8bn in expenditure in 2012, compared with €33.4bn for small-and-medium-sized enterprises, both essentially flat year on year.

The organisation also reported that 40% of German corporations had implemented or were planning innovation programmes by the half way point of 2011, when 7% were "unsure" about strategies in this field.

Such a figure fell below the 48% of active businesses logged in 2010, while budgets were also predicted to drop in many cases this year.

By category, food, beverage and tobacco manufacturers directed €2.1bn to innovation last year, falling to a projected €1.9bn in 2012.

Media companies and related service providers also spent over €2bn in 2011, but are anticipated to record €1.9bn in 2012. The telecoms sector will log €10.4bn, largely unchanged on an annual basis.

Consultancies and advertising firms were forecast to allocate €980m to this discipline next year, versus €920m in 2011 and €1bn in 2010. Just over a third of operators in these areas are currently engaged in innovation schemes.

The biggest-spending industries overall are likely to be chemicals and pharmaceuticals specialists on €14bn, electricals groups on €12.8bn and automakers on €33bn.

In keeping with such trends, 74% of electronics firms expected to undertake innovation programmes this year, standing at 73% for chemicals and pharma, 66% for telcos and 65% for automakers.

The study was produced by ZEW based on data from 15,800 companies in a diverse range of industries.

Data sourced from ZEW; additional content by Warc staff