Transformative innovation is fundamentally disruptive leading to reallocation, productivity growth, and growing standards of living. Entrepreneurial firms are believed to be at the heart of this process by introducing new ideas, products, and services that displace those offered by less innovative firms. This creative-destruction process underlies business dynamism in modern market economies. However, entrepreneurship and business dynamism are in decline in the US and Europe with potentially broad implications for innovation, productivity growth, and well-being. The arising key question is which industrial policies allow to achieve sustainable competitiveness. In this research project, which will be conducted as a Leibniz collaboration between the Halle Institute for Economic Research (IWH) and ZEW, we propose a program to study the conditions, determinants, and implications of innovative high-growth entrepreneurship in Germany.