The Halle Institute for Economic Research (IWH) is taking an important step in its development: its newly founded "Centre for Business and Productivity Dynamics" (CBPD) officially started work at the beginning of the year. The aim of the centre is to better understand the profound structural change in Europe's economies by working with microdata at firm level. The structural change is taking place against a backdrop of complex challenges, triggered for example by price shocks, technical and green transition, globalisation and regulation.

Once the start-up phase of the centre is completed in 2027, eleven full-time positions will be located there. The Institute's annual basic funding will then increase by 953,000 euros, an increase of 11% compared to today. This is the second major expansion of the IWH during the term of office of Institute President Reint Gropp. In 2020, the fourth research department was founded to investigate the interactions of state regulation of financial and labour markets and their consequences for the economy as a whole.

A core task of the new structural unit is to advance productivity research from an international comparative perspective. To this end, economists will collect, link, provide and analyse firm data from EU countries. In contrast to data at economic sector level, the new microdata are expected to provide a more detailed picture of how the constant reallocation of the production factors of labour and capital between firms influences productivity. This is considered a key factor for innovation and economic growth and therefore the basis of prosperity. In Germany and Europe, productivity growth has been stagnating for years, which can exacerbate distribution struggles and put a strain on social cohesion.

IWH President Reint Gropp says: "This expansion is the key to fully realising our strategy of cutting-edge research. We want to become Europe's leading institute for research on productivity in all its facets." The Halle Institute has the best prerequisites for this, including its own department specialising in productivity research. It led the EU-funded MICROPROD project with nine European partners, thus helping to pave the way for the new centre of excellence.

Javier Miranda, Centre Chief of the CBPD, formerly served as Principal Economist at the U.S. Census Bureau and brings a wealth of experience to the centre. Miranda is looking forward to intensive collaboration with internal and external partners: "Our research will involve all departments of the Institute in order to combine perspectives from labour market, finance and macroeconomics. Other German and European academics and institutions such as the National Productivity Boards are already key partners. Together, we want to enable microdata access for cutting edge research as a basis for better-informed decisions."

A planning and development process lasting several years preceded the opening of the centre. In this process, the Leibniz Association's Senate Committee on Strategic Projects assessed the expansion as excellent and approved it. The Joint Science Conference of the federal and state governments (Gemeinsame Wissenschaftskonferenz GWK) gave its final approval in November 2024. The expansion of the Institute, which had begun under the working title "Centre for Factor Market Transformation, Energy Shocks and Productivity Growth" (IWH-FEP), finally received its current name: "Centre for Business and Productivity Dynamics" (CBPD).