Fraunhofer Institute

The Fraunhofer Society (German: Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e. V. — Fraunhofer Society for the Advancement of Applied Research, pronounced [ˈfraʊnhoːfɐ]) is a German research organization with 67 institutes spread throughout Germany, each focusing on different fields of applied science (as opposed to the Max Planck Society, which works primarily on basic science). It employs around 24,000 people, mainly scientists and engineers, with an annual research budget of about €2.1 billion. Some basic funding for the Fraunhofer Society is provided by the state (the German public, through the federal government together with the states or Länder, "owns" the Fraunhofer Society), but more than 70% of the funding is earned through contract work, either for government-sponsored projects or from industry.

It is named after Joseph von Fraunhofer who, as a scientist, an engineer, and an entrepreneur, is said to have superbly exemplified the goals of the society.

The organization has seven centers in the United States, under the name "Fraunhofer USA", and three in Asia. In October 2010, Fraunhofer announced that it would open its first research center in South America. Fraunhofer UK Research Ltd was established along with the Fraunhofer Centre for Applied Photonics, in Glasgow, Scotland, in March 2012.

The so-called "Fraunhofer Model" has been in existence since 1973 and has led to the society's continuing growth. Under the model, the Fraunhofer Society earns about 70% of its income through contracts with industry or specific government projects. The other 30% of the budget is sourced in the proportion 9:1 from federal and state (Land) government grants and is used to support preparatory research.

Thus the size of the society's budget depends largely on its success in maximizing revenue from commissions. This funding model applies not just to the central society itself but also to the individual institutes. This serves both to drive the realisation of the Fraunhofer Society's strategic direction of becoming a leader in applied research as well as encouraging a flexible, autonomous and entrepreneurial approach to the society's research priorities.