Innovation Indicator 2017 – Germany Comes in Fourth Place Globally for Innovation

In competition against the most highly innovative economies around the world, Germany has climbed up the international ranking by one place, but is still unable to catch up with the leading countries, Switzerland and Singapore. The German innovation system also did not come top in the areas of economy (7th), science (11th), education and government institutions (8th in both), and civil society (13th). The area in which Germany particularly needs to catch up is digitalisation, having come in well behind other industrialised countries in 17th place.

These are the principal findings of the Innovation Indicator 2017, a survey conducted on a regular basis by the Fraunhofer Institute for Systems and Innovation Research (ISI) and the Mannheim-based Centre for European Economic Research (ZEW), on behalf of the German National Academy of Science and Engineering (acatech) and the Federation of German Industries (BDI).

As part of the study, both the strengths and weaknesses of the German innovation system were analysed. According to the study, Germany’s strengths include high-quality professional training with a large share of highly qualified academics in STEM subjects (science, technology, engineering and mathematics), large contributions from the high-tech sectors to value added, comprehensive state funding of the nation’s research system as well as a high number of patent applications per capita compared to other industrialised nations.

“A great willingness to innovate across a wide range of areas”

Germany’s weaknesses in innovation include – in comparison to the Innovation Indicator from 2015 – the decrease in Germany’s trade balance in high-tech goods, the drop in the employment share in the knowledge-intensive service sector as well as a reduction in venture capital investments in relation to GDP. Unlike most other industrialised nations, Germany’s government has thus far refrained from providing tax incentives for research and development (R&D). The level of R&D funding provided directly to companies by the government is also comparatively low.

“Germany’s high ranking on the Innovation Indicator can largely be attributed to the country’s balanced innovation system. Instead of aiming for cutting-edge achievements in individual areas, Germany scores highly thanks to its great willingness to innovate across a wide range of social and economic areas. Maintaining this outlook should be the top priority for innovation policy,” says Dr. Christian Rammer, deputy head of ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” and project leader of the Innovation Indicator survey at ZEW.

The Innovation Indicator

The annually published Innovation Indicator is a study which compares countries in terms of their innovation performance. The study analyses the conditions for innovation in Germany and develops a ranking which compares Germany to other leading industrial nations and emerging countries in terms of economic policy, research, education, state and civil society, as well as in terms of an overall indicator. This provides a basis for innovation policy. The Innovation Indicator is a joint initiative of acatech, the German National Academy of Science and Engineering, and the Federation of German Industries (BDI). The study is carried out jointly by Fraunhofer ISI and ZEW. The Innovation Indicator was a joint initiative of BDI and the Deutsche Telekom Stiftung, before acatech joined as a cooperation partner in 2015.

For further information please contact

Dr. Christian Rammer, Phone +49(0)621/1235-184, E-mail christian.rammer@zew.de