Innovation and Innovation Policy in Germany
Innovation and Innovation Policy in Germany 
Overview of Innovation Policy
Innovation policy is a main policy priority in Germany, and innovation policy has a long tradition both at the Federal and the State level. Currently, the following challenges drive policy activities in this area:
– Funding of innovation is a fundamental challenge since financial markets always tend to be cautious when financing investment of which the outcome is highly uncertain, and which offers little collaterals. Financing restrictions to innovation were currently reinforced by the global crisis of financial markets. The situation is especially critical for SMEs since they typically have smaller internal funds and a higher risk exposure in case of failure of an innovation project. Innovation policy in Germany is responding to this situation by offering a variety of innovation funding instruments for SMEs including venture capital programmes (such as the High-tech Start-up Fund), loan programmes and a variety of grant aid programmes. The new Central Innovation Programme for SMEs (ZIM), which started in 2008, is currently the single most important Federal programme to fund R&D and innovation activities of SMEs.
– Keeping pace with global technology trends is another constant challenge to German innovation policy. While Germany’s innovation performance is among the best in the world, it strongly rests on sectors and technologies that promise rather little growth in future, such as Automotive, Machinery, Chemicals and Electrical Engineering. In high-tech sectors with high (expected) growth potential, rapid technological change and high spillover potentials to other sectors and technologies, such as ICT, biotechnology, nanotechnology, health and medical technologies (incl. pharmaceuticals) and knowledge-intensive services, Germany’s performance is traditionally rather weak (which is also confirmed by the European Innovation Scoreboard). Policy responses to this challenge particularly rest on the Federal instrument of so-called “Thematic R&D Programmes”. These programmes are also the operational heart of the new “High-tech Strategy” and are the basic measure to implement the funding for 17 priority fields of technology. Thematic R&D programmes typically consist of a multi-annual framework programme for a specific field of technology (e.g. biotechnology, nanotechnology, ICT, medical technologies, environmental technologies, space technologies, aircraft technologies etc.) which operationally consist of a number of individual measures for funding R&D and innovation projects under a tender system. Programmes and measures are regularly re-launched and re-designed. In addition to thematic R&D programmes, several activities in the field of increasing excellence in basic research (e.g. the “Initiative for Excellence” to promote top-level research at Universities, or the “Pact for Research and Innovation” to strengthen research at non-university public research organisations) also respond to this challenge.
– Adjusting the education system to changing requirements of technology and innovation is an ongoing challenge for any country. The situation is particularly critical since the education system in Germany tends to perform worse than that of many other countries, and adjusting the system to a changing world seems to be particularly demanding. A lack of qualified labour is likely to become one of the most important barriers for innovation as the German economy starts growing again while supply with well-trained young people is stagnating. Policy has responded to this challenge by a number of initiatives during the last years, though their effectiveness is sometimes limited as a result of divided responsibilities between the Federal and the State level, with the State governments being responsible for primary to tertiary education (including Universities), while the Federal government is only able to significantly affect vocational education and training. In these fields, a number of new actions have been undertaken, e.g. reforming of vocational training courses, introducing new, “modern” courses and improving the supply of further education, including additional financial incentives for employees.
– Though most indicators confirm a close and effective link between public research and business innovation, maintaining and further improving industry-science linkages is another area that occupies innovation policy in Germany. Many innovation policy programmes focus on funding collaborative R&D and innovation projects, typically involving both public and private actors, such as the Thematic R&D Programmes and the Central Innovation Programme for SMEs (ZIM). Another programme, the Research Bonus, is intended to strengthen the ability of universities and public research institutions to co-operate with SMEs. Further policy activities concern a better management of intellectual property at universities and initiatives to foster spin-offs from public research.
Innovation policy governance in Germany involves both actors at the Federal and the State (“Laender”) level and includes several co-ordination mechanisms, stakeholder groups and expert councils. The main actors in innovation policy among the Federal Ministries are the Federal Ministry of Education and Research (BMBF) and the Federal Ministry of Economics and Technology (BMWi) while several other Federal Ministries (e.g. Ministry for the Environment, Defence Ministry) as well as the Federal Chancellery are also engaged in innovation policy. In the course of the High-tech Strategy implemented in 2006, a so-called “Research Union” was established that supports policy in identifying challenges and adequate response. In 2007, a new Expert Council for Research and Innovation (EFI) has been installed, which presented its first report on the state of research and technology in Germany in February 2008 and the second one in March 2009.
Current trends in German innovation policy are closely related to the above-mentioned challenges. Programmes related to financing have gained in importance, as well as activities related to the High-tech Strategy and the Federal government’s attempts to strengthen Germany’s performance in high-tech sectors. The most recent policy developments include:
- The Top Cluster Programme which attempts to fund regional thematic clusters that bring together public research and enterprises to further develop high technologies in various areas. Clusters are identified through a bottom-up approach. There will be three rounds of competitions. In each round up to five clusters will be selected for funding, providing €200 million of public money for each round.
- The ZIM programme (central innovation programme SME) which has merged a number of previous programmes (ProInno, InnoNet, NEMO, InnoWatt) is intended to ease access for SMEs and increase flexibility in programme administration as well as shifts in programme resources among various programme elements. ZIM has received significant additional funds of about € 450 million for both 2009 and 2010. Consequently, the target group has been enlarged to cover enterprises up to 1,000 employees.
- The new BMBF proramme SME Innovative attempts to ease access of SMEs to thematic R&D programmes by simplifying application procedures.
| Annual Country Reports |
 Country report 2009 for Germany
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| Country report 2008 for Germany
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| Country report 2007 for Germany
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| Country Report 2006 for Germany
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| Country Report 2005 for Germany
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| Country Report Germany September 2004
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| Germany - Trend Chart Country Report, September 2003
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| Germany - Trend Chart Country report, March 2003
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| Germany - Trend Chart Country Report, October 2002
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| Germany - Trend Chart Theme-specific Country Report, May 2002
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| Germany - Trend Chart Country Report, November 2001
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| Germany Trend Chart Country report June 2001
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| Germany Trend Chart Country Report Dec 2000
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| Germany Trend Chart Country Report June 2000
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| Latest TrendChart Deliverables |
| Workshop Briefing Germany 13_2006 |
| Example of German Federal program for innovation in services |
| A German example of a policy programme for innovation in services |
| How to measure innovation in services: the case of the German innovation Survey |
| Workshop Briefing Germany 11_2006 |
| New Support Measures |
 DE 133 Innovation Alliances |
| DE 7 Patent Information Centres and Thematic Information Centres |
| DE 57 Innovative Regional Growth Poles |
| DE 32 TOP - Technology oriented visiting and information programme |
| DE 80 Top Cluster Competition |
Who Is Who
Senior Official(s) for Germany
Wolfgang Crasemann
Correspondents for Germany
Christian Rammer
Rolf Reiner
Search Who's Who
Innovation Performance
Performance in Innovation Scoreboard 2008Find Out More
List of relevant websites
