Innovations in the Services Sector: Contrasting Developments in the Individual Branches

Innovation activities in Germany showed a generally stable trend in 1997. However, disparate developments are apparent in the individual sectors. Whereas in the modern services sectors – banks/insurances as well as technical, IT and consultancy services – innovation activities have intensified, the traditional sectors – retail and wholesale as well as transport – show a strong diminishing trend. This is the result of the latest innovation survey by the Centre for European Economic Research (ZEW) in Mannheim. For this representative survey, ZEW interviewed approximately 4,010 enterprises about their innovation activities in 1999 and projected the results for Germany. According to ZEW calculations, the share of innovative companies in the modern services sector in 1997 has reached 66 per cent and therefore lies considerably above previous year’s level (61 per cent). Innovation expenditures have likewise increased by 13 per cent to 26 billion DM.

By contrast, the share of innovative companies dropped from 61 to 56 per cent in the trade and transport sectors, which still continue to be the most important services sectors as measured by the number of enterprises and employees. Innovation expenditures are stagnating at a level of 20 billion DM. In the new federal states the absolute number of innovative companies decreased not only in the trade and transport sectors but also in the modern services sectors despite a growing number of businesses. These shortcomings in innovation activities can certainly not be remedied by innovation policy alone. It is urgently necessary to improve the general economic framework conditions in order to make it possible for innovative companies to steadily continue with their innovation activities.

Contact

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