Published on: March 21, 2025 / update from: March 21, 2025 - Author: Konrad Wolfenstein
Mastering economic doldrums: Strengthen the German science and innovation system in the age of the poly crisis- Image: Xpert.digital
Germany's future: How innovation can show the way out of the poly crisis (reading time: 16 min / no advertising / no paywall)
From the crisis to strength: Germany's way into the future
Germany is on a crossroads. The country is located in the middle of an unprecedented mixture of global crises, a so -called poly crisis that has profound effects on economy, society and international position. This poly crisis is characterized by a dangerous mix of wars and geopolitical tensions, a gradual loss of international competitiveness, the immense challenges of ecological and digital transformation as well as increasing uncertainty among the population. In order to ensure prosperity in this complex and dynamic situation, generate economic growth and ensure social stability, a fundamental and quick further development of the German science and innovation system is of existential importance.
The innovative strength of a country is the decisive engine for future prosperity and social progress. It enables new products, services and processes to develop that not only generate economic success, but also offer solutions for pressing social problems such as climate change, resource shortage, demographic change and global health. A strong science and innovation system is therefore not only an economic, but also a social imperative.
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Germany's position in the global innovation competition: a location determination
Germany can look back on a long and glorious tradition in science and innovation. In the past, the country has repeatedly created pioneering inventions and technologies that have changed the world. Germany is also one of the most innovative nations in the world in the present. Various international innovation rankings show this.
In the Global Innovation Index (GII) of 2024, a comprehensive and globally recognized benchmark for the innovative strength of economies, Germany is occupied by 93 countries examined. Within Europe, Germany also ranks 9th place in the 6th place and in the group of high -income countries. These placements underline the fundamentally strong position of Germany in the global innovation competition.
The European innovation client (ice) in 2024 also confirms Germany's innovation strength. The ice classes Germany as a "strong innovator" and certifies the country an innovation performance of 111.6 % of the EU average. Germany is therefore slightly above the average of the group of "strong innovators" within the European Union.
Between strength and stagnation: challenges for the German innovation system
Despite these overall pleasant results, there are signs that give the reason to worry and show that Germany runs the risk of losing dynamics in the global innovation competition. A closer look at the development of the German innovation system reveals some critical challenges.
A worrying trend is the slow growth of research and development investments (FUE investments). While Germany shone in the past in the past in international comparison, the pace of growth has slowed down in recent years. This is particularly problematic because other leading innovation nations continuously expand their FUE investments and sometimes even accelerated.
Another critical point is the decline in promotions in Germany. The number of newly completed promotions has dropped in recent years. This indicates a youth problem in the scientific field and could weaken Germany's innovative strength in the long term. Because highly qualified scientists are the foundation for future innovations.
The decline in product innovations in small and medium -sized companies (SME) is particularly alarming. Mittelstand is the backbone of the German economy and traditionally an important innovation driver. However, current data show that the innovation activities of SMEs are declining. This applies in particular to the development and market launch of new products that are of central importance for the competitiveness of the German economy.
In addition to these quantitative indicators, there are also qualitative challenges that burden the German innovation system. This includes, in particular, considerable bureaucratic hurdles that hinder companies, especially start-ups and SMEs, for innovation projects. Complex approval processes, lengthy administrative processes and lack of digital offers from the authorities make innovation projects difficult and cost valuable time and resources.
Global competitive landscape: Germany compared to other innovation leaders
In order to better classify Germany in the global innovation competition, a comparison with other leading innovation nations is essential. In the Global Innovation Index 2024, Germany is behind Switzerland (1st place), Sweden (2nd place) and the United States (3rd place). These countries show that there is still room for improvement for Germany.
Switzerland is characterized, for example, by an excellent education system, a high level of research intensity and a pronounced entrepreneurial culture. Sweden scores with an open and innovation -friendly society, a strong digital infrastructure and a high level of acceptance for new technologies. The United States are known for their dynamic start-up scene, their risk-leading innovation financing and their ability to attract top forces from all over the world.
A comparison with these countries shows that Germany is already very well positioned in some areas, but still has some catching up to do in others. There is improvement potential in particular in the areas of risk capital, digital infrastructure, reduction in bureaucracy and innovation culture.
The poly crisis as an innovation accelerator? Opportunities in times of upheaval
The current poly crisis, as it is challenging, also contains opportunities for the German science and innovation system. Crises can accelerate innovation processes and drive the change forward. The pressure to find new solutions for pressing problems can inspire creativity and innovative strength.
The current global challenges, such as climate change, the energy crisis, resource shortage and geopolitical uncertainties, require innovative solutions in various areas. This applies in particular to key technologies such as artificial intelligence (AI) and green technologies. These technologies offer immense opportunities for future competitiveness and sustainable growth.
Artificial intelligence (AI) has the potential to fundamentally change numerous industries and to open up new value creation potential. From the automation of production processes to the development of new medical diagnostic procedures and personalized education - the possible uses of AI are diverse and will increase in the future.
Green technologies are essential for coping with climate change and the transition to a sustainable economy. Modern power grids, wind energy, green hydrogen, electromobility and heat pumps are just a few examples of green technologies that are of crucial importance for the future industrial success of Germany. Germany has already strengthened in these areas and can further expand them to take a pioneering role in the field of green technologies.
Digital technologies play a key role in strengthening the technological sovereignty and competitiveness of Germany. Digitization penetrates all areas of life and economic sectors and opens up new opportunities for innovations. The metaverse, in connection with AI, the Internet of Things (IoT), automation and blockchain, is viewed as the key to future productivity growth.
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Bottlenecks and brake blocks in the German innovation system: a detailed analysis
In order to strengthen Germany's innovative strength sustainably, it is essential to identify the critical bottlenecks and brake blocks in the innovation system and to approach them in a targeted manner. A detailed analysis shows different areas in which there is a need for action.
Investments in research and development: quantity and quality
Investments in research and development are a central indicator of the innovation efforts of a country. FUE expenses in Germany have increased in recent years, but the pace of growth has slowed down. There is also indications that the efficiency of the FUE investments may not be optimal. For example, the number of scientific publications has decreased in recent years, and the volume of the venture capital investments has also decreased.
An important aspect is state funding for research and development. The European innovation climber in 2024 criticizes the relatively low direct and indirect state support for the research and development of companies in Germany. In comparison, for example, the United States rely more on tax incentives for FUE investments and the promotion of start-ups.
Germany's reluctance in the introduction of comprehensive tax reliefs for operational research and development is justified, among other things, with political reasons and a history of budget deficits. However, it must be checked whether this reluctance is still up to date in view of the current challenges. A more targeted and effective state research funding, which also includes tax incentives, could significantly increase innovation dynamics in Germany.
Human capital and talent development: the key to success
Human capital is the most valuable asset of every innovation system. Highly qualified and motivated people are the driving force behind innovations. The decline in promotions in Germany is all the more worrying. This trend indicates a youth problem in the scientific field and could endanger Germany's innovative strength in the long term.
Possible reasons for the decline in promotions are diverse. Financial problems, lack of social and academic integration of international students, misconceptions about German academic culture and uncertain career prospects for young scientists play a role. In addition, there are legal restrictions in Germany regarding the maximum employment duration of doctoral students who can affect the attractiveness of a doctorate.
Comprehensive measures are required to strengthen the human capital. This includes a more attractive design of the doctoral phase, better career prospects for young scientists, stronger promotion of international students and researchers as well as a modernization of the university system. The promotion of women in MINT occupations (mathematics, computer science, natural sciences, technology) is also of great importance to fully exploit Germany's innovation potential.
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SME innovation and competitiveness: strengthen the backbone of the economy
Small and medium -sized companies (SMEs) are the backbone of the German economy and play a central role in the innovation system. However, current data show a worrying trend: the innovation activities of the SMEs are declining. In particular, the introduction of product innovations by SMEs has decreased significantly in recent years. The cooperation of innovative SMEs with other companies is also declining.
In the long term, a trend of declining innovation activities can be observed at German SMEs. The proportion of innovative companies has almost halved since 2004. Possible reasons for this decline are diverse and complex. Economic stagnation, growing price competition, difficulties in financing innovations, shortage of skilled workers and too strong focus on incremental innovations play a role.
In order to strengthen the innovative strength of SMEs, targeted measures are required. This includes improving the framework conditions for SME innovations, the reduction of bureaucratic hurdles, better promotion of innovation especially for SMEs, support in digitization and combating the shortage of skilled workers. The promotion of cooperation between SMEs and research institutions and the strengthening of the innovation culture in SMEs are also important fields of action.
Bureaucracy and regulatory environment: reduce innovation barriers
Bureaucracy is a significant obstacle to innovations in Germany. Companies, in particular start-ups and SMEs, complain about complex approval procedures, lengthy administrative processes and a lack of digital offers from the authorities. The impression of many companies is that bureaucratic burdens are less created by the laws themselves than their implementation by the authorities.
According to estimates, Germany is lost considerable potential profits due to unnecessary bureaucratic requirements. Specific regulations such as the supply chain law and the EU AI Act are perceived as innovation obstacles, especially in the processing of businesses. The General Data Protection Regulation (GDPR) has also led to incremental changes in some areas to shift the innovation activities from radicals. There are also concerns about over -regulation in the EU, including the AI Act, which could potentially hinder innovations.
In order to reduce bureaucracy as an obstacle to innovation, comprehensive measures are required. This includes simplification of approval procedures, digitization of administrative processes, better networking of the authorities, the reduction of double work and the introduction of one-stop shops for companies. A critical review and, if necessary, adaptation of existing regulations with regard to their friendliness of the innovation is also necessary.
Use future opportunities: key technologies for Germany's competitiveness
Despite the challenges mentioned, Germany also has great opportunities to strengthen its innovative strength and to secure its competitiveness in the future. This applies particularly in the area of key technologies. Artificial intelligence (AI), green technologies and digital technologies offer immense potential for innovations and future growth.
Artificial intelligence (AI) is a key technology of the 21st century. It has the potential to fundamentally change numerous industries and to develop new potential for added value. Germany already has a good starting position in AI research and should further expand it. This requires investments in AI research and development, the promotion of AI start-ups, the qualification of specialists in the AI area and the reduction of regulatory hurdles for AI innovations.
Green technologies are essential for coping with climate change and the transition to a sustainable economy. Germany already has a strong position in some areas of green technologies, such as wind energy and electromobility. These strengths should be expanded further. In addition, investments in new green technologies, such as green hydrogen and CO2 separation, are required to make Germany a pioneer in the field of green technologies.
Digital technologies are the basis for innovations in almost all areas. Germany must further expand its digital infrastructure, strengthen the digital competence of the population and promote the digitization of the economy. The promotion of digital business models and the creation of an innovation -friendly regulatory environment for digital innovations are also important tasks.
The metaverse, an immersive, networked digital world, also offers great opportunities for innovations. In conjunction with AI, IoT, automation and blockchain, the meta -verse new forms of cooperation, design, training and interaction in industrial and commercial applications can enable. Germany should recognize and use the potential of meta -verse at an early stage.
Strategic recommendations for action: clear goals and brave measures
In order to strengthen the German science and innovation system in the age of the poly crisis and to make Germany a leading innovation nation again, strategic recommendations for action and courageous measures are required. These recommendations can be limited into four central fields of action:
1. Prioritization of research and innovation
Increasing FUE investments
The proportion of state expenditure for research should be increased to the declared goal of 3.5 % of GDP by 2025. In addition, private FUE investments should be funded by tax incentives.
Consolidation of research and innovation policy
The responsibilities for research and innovation policy should be bundled in a single Federal Ministry to improve coordination and use synergies.
Long -term funding cycles
Stable and long -term funding cycles for research projects should be guaranteed in order to create planning security for research institutions and companies.
2. Promotion of a dynamic innovation ecosystem
Reduction in bureaucracy
Bureaucratic hurdles for research, start-ups and SMEs should be significantly reduced. Approval procedures should be simplified, administrative processes should be digitized and one-stop shops for companies should be introduced.
Real laboratories and regulatory sandboxes
The creation of "real laboratories" or regulatory sandboxes can facilitate the commercialization of new innovations and enable companies to test new technologies in a protected environment.
Risk -tolerant innovation financing
A more risk -tolerant financing of innovations, including venture capital, should be funded. Access to risk capital for start-ups and innovative SMEs should be improved.
Networking of science and industry
The networking and cooperation between science and industry should be intensified. Formats such as innovation clusters, technology centers and public-private partnerships should be strengthened.
3. Strengthening the human capital and competencies
Increase the attractiveness of promotions
Initiatives to increase the attractiveness of promotions in Germany and to improve the final rates are necessary. Better financial framework conditions, more attractive career prospects and a stronger international orientation of the doctoral programs are required.
Extraction and binding international talents
Measures to obtain and commit international researchers and specialists should be implemented. Visa procedures should be tightened, the recognition of international qualifications is simplified and an open and welcome culture for international talents should be promoted.
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Lifelong learning and digital skills
The importance of lifelong learning as well as further training and retraining programs to strengthen digital skills in the entire workforce should be emphasized. Investments in digital education and promoting digital skills are essential for the future viability of the German economy.
4. Intensification of international cooperation and openness
Cross -border research collaborations
The cross -border cooperation in research and innovation should be strengthened. Participation in international research programs and the promotion of binational and multilateral research projects should be intensified.
Takeover of global best practices
The takeover of global best practices in science and innovation policy is recommended. A continuous exchange with other leading innovation nations and the analysis of your success factors can provide valuable impulses for the further development of the German innovation system.
Promotion of English as a language of science
The use of English as a science language in Germany should be promoted to attract international talents and increase the international visibility of German research.
A renewed commitment to science and innovation
Science and innovation are the key to coping with the current poly crisis and securing future prosperity and global competitiveness in Germany. A renewed national commitment to prioritize research and innovation is required. Clear goals, courageous measures and consistent implementation are necessary to strengthen the German science and innovation system and to make Germany a leading force in global science and innovation again. The challenges are great, but the chances are too. With a determined and common effort, Germany can go forward and successfully shape its future.
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