Innovation Behaviour in the German Economy: Germany Ranks Highly in Terms of Market Innovations

Market innovations play an important role in boosting Germany's competitiveness. It is therefore extremely welcome news that in 1999 more than 40 per cent of businesses in the German manufacturing industry introduced market innovations. The proportion of service providers introducing market innovations has also risen to over 30 per cent. These increases mean that Germany is now amongst the top ranking European economies in terms of the introduction of market innovations.

Despite the high proportion of innovative companies in the German economy, until now Germany has lagged behind other European countries in terms of the implementation of market innovations. This was a finding of the latest innovation survey carried out by the Centre for European Economic Research (ZEW), Mannheim, on behalf of the Federal Ministry for Education and Research (BMBF). In 1999, ZEW interviewed approximately 4,000 enterprises about their innovation activities and projected the results for Germany.

The increased importance of market innovations is reflected in the turnover structure. Almost every tenth Deutsch mark generated in this industry is the result of market innovations. In the service sector, it is only every twentieth Deutsch mark. The share of turnover generated through market innovations has, however, increased in all sectors in comparison to the previous year.

According to calculations carried out by ZEW, businesses in the German economy spent around 163 billion Deutsch marks on innovative products, services and processes in 1999. Following a long period of continued growth, the proportion of innovative businesses in the manufacturing industry has reached 66 per cent - a comparatively high figure in international comparison. In the service sector as well, the proportion of innovative businesses has, after a slight fall, once again increased. In the distribution services sector (trade and transport) the proportion has increased to 60 per cent, and amongst business-related service providers (such as finance, software, technical and consultation service providers) this figure has risen to 64 per cent.

Contact

Dr. Norbert Janz, E-mail: janz@zew.de