Presentation of the Funding Situation in Saxony

Tasks

The economic, demographic and fiscal conditions of Saxony will be subject to substantial change in the coming years. These changing conditions must be acknowledged by the future funding policy. The Saxonian state government (Landesregierung) has established the funding committee II (Förderkomission II) to further develop and consolidate the states funding policy. The Dresden branch of the ifo institute was commissioned by the funding committee II to analyze the funding policy and its socioeconomic as well as fiscal conditions in past, present and, where possible, future.

Methods

To illustrate the past and present, data on key indicators for the ten funding areas, including education, climate and resource protection, and economic development, among others, were collected and analyzed for the period 2010 to 2020. Where available, projections and forecasts up to 2030 were included in the analysis. A comparison with Germany as a whole was used to highlight the strengths and weaknesses of the Saxony in the individual areas.

Data and other sources

Volkswirtschaftliche Gesamtrechnung (VGR) der Länder,  Saxon State Ministry of Finance, Federal Statistical Office of Germany, Federal Employment Agency, Statistical Office Saxony, INKAR-Data base.

Results

The analysis has shown that Saxony’s strengths are a high degree of industrialization, high research potential, a good education system, rich cultural landscape, and a low interest burden on the public budget. Weaknesses on the other hand are the demographic change and the resulting declining labour force, low productivity, the into small sections divided economy, low R&D spending, and tendencies of growing societal divide.

Total spending on funding policy has been constant from 2010 to 2020 and therefore decreased in real terms. However, due to change circumstances a new prioritization of the funding strategy is needed. Programs concerning the demographic change are likely to be of heightened importance in the future.