The dreaded exposed loopback interface... I'm an (internal) auditor, and I see huge variations in competence. Not sure what to do about it, since most technical people don't want to be in an auditor role.
Fraunhofer is a not for profit organization, consisting of around 75 independent institutes. Our income comes from three sources: (1) publicly funded R&D, for example EU grants. We apply just as everyone else, so we compete with universities and private companies. (2) Industry grants. This is where the “applied science” of our mission statement comes into play. These grants are mostly from SMEs, but we also have huge industry grants. And finally (3) the base funding from the Germany’s government. The idea is that common cost like buildings and infrastructure is covered by the base funding.
The base funding depends on the ratio of income from (1) and (2). About 40-50 percent should originate from industry (2). If an institute deviates from this, their base funding will be reduced. Bottom line: There is a strong incentive to do research, but also to transfer that knowledge to industry partners. Failing to do both will reduce the base funding. Its a delicate balancing act, for each institute.
