ZEW Study Defines Measures for Innovation Policy in Germany

Technological developments such as cloud computing, Big Data, hyperconnectivity and Industry 4.0 open the way for the digital transformation and are the basis for the development of new products, services and business models, and for the reconfiguration of current process. In short, such developments lay the groundwork for innovation. The task of maintaining Germany's competitiveness throughout this transformation is not only the job of businesses, but also depends on policy. As part of the study "Innovation Policy in Germany – Measures for More Innovation in the Era of Digitalisation", carried out on behalf of SAP Germany, the Mannheim Centre for European Economic Research (ZEW) developed recommended practices which will be crucial in view of digitalisation, innovation and competitiveness.

The study identified three fields of practice via which the digital transformation, and therefore the ability of Germany to pursue innovation, may be supported.

Promotion of Digitalisation – Data security and protection must be guaranteed. Individual regulations within the EU and European-level certification generate trust, a prerequisite for the adoption and diffusion of new technologies, particularly in small and medium-sized businesses.

Strengthening the ability of businesses to innovate – Financing conditions must be improved for young firms with business ideas which, although they are associated with considerable risks, could potentially result in high levels of growth. Germany's High-Tech Gründerfonds (HTGF) should be expanded to include a further segment designed to finance high-risk start-ups. Establishing a Europe-wide stock exchange for start-ups would provide venture capital investors with better possibilities for exit. Tax concessions for research and development would incentivise research-based businesses to increase their innovation activities.

Investments in infrastructure and training – For the expansion of a sufficient communication network, cooperation between network providers and local authorities offers significant potential as a way of spreading risk. This is particularly the case in rural regions with only one existing network. The further development and improvement of e-government services may increase efficiency and free up resources, which can then be invested in digitalisation and innovation projects. As well as establishing information technology as part of the school curriculum, various training and studying schemes could also enable skills from different disciplines to be combined in order that new or altered job profiles are fulfilled.

For more information please contact

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