Innovation Europe > News > Innovation EU Vol2-1 > Innovation Germany

The main advantage of the German economy is its specialisation in high and mediumhigh technology combined with efficient production and innovative products and services.

Germany has a large and diversified science and knowledge base – it belongs to those nations with the biggest R&D capital stock, and the output of R&D and innovation activities in terms of patents, new products and high productivity is remarkable.

Germany ranks third with the EIS summary innovation index (SII) within EU-27 and shows the highest value among all larger member states. In the global perspective Germany is only at the lower end of leading countries in terms of innovation performance.

The country’s innovation performance is particularly strong when it comes to generating innovative outputs and new technology. This is revealed by a high share of innovators (both technological and non-technological), a high share of patent applications per inhabitant, and the employment and export shares of medium and high-tech manufacturing.

German enterprises invest heavily in R&D – R&D expenditure as a percentage of GDP is higher than in most EU countries and grew further up to 2008. The transfer between research organisation and industry is also well organised.

Main innovation challenges

• Funding of innovation.
• Keeping pace with global technology trends.
• Adjusting the education system to changing requirements of technology and innovation.

Conclusions

RD&I policy in Germany follows a stable policy path, resting on a balanced set of policy measures that are well-proven and effective in achieving the policy goals. Most RD&I policy measures focus on excellence, both in terms of scientific excellence in public research and “market excellence” in applied R&D performed by enterprises or through collaborative research involving firms and public research institutions.

There is currently a debate in German RD&I policy to enlarge the policy mix by introducing a tax incentive for R&D into corporate taxation. Such a new measure would have the potential to address a significantly larger number of enterprises and provide incentives for currently non-R&D-performing enterprises to engage in R&D activities.