Environmental issues play a role of ever increasing significance in the discussion of the development of future technologies in Germany, as it is primarily the economies of developed nations that are charged with the responsibility to bring transferable and exportable technologies and products to the world. The world market, however, is not only one of abundant opportunity. Rather, suppliers must certainly be expected to face fierce technological and economic international competition. It is in this competitive framework that innovations are viewed as of primary importance.

The study´s objective is to redress the innovation indicators of the environmental industry with respect to the politically relevant discursive framework, taking into account especially the international scope of ongoing progress in this field.

• The analysis comprises the aspects of diffusion, direction, and success of environmental innovations in Germany. This relies on the fact that both in goods and services leadership must first be acquired nationally before it can prevail on the world market. Specific attention will be paid to the influence of environmental regulations in order to develop an internationally comparative concept of the relationships determining the interaction of environmental policy and innovation indicators.
• The environmental industry´s significance to overall economic performance (productive capacities and structures) as well as its international competitiveness (trade performance and specialisation) will be assessed.
• The position and outlook of German firms in the international environmental technology market (patents) and an appraisal of public environmental technology research on an international scale (publications) are furthermore envisioned. This includes an approach to map the stages of technological development in the field of environmental technology.

As part of the project headed by the Economic Research Institute of the State of Lower Saxony (NIW) and in co-operation with the Fraunhofer Institute for Systems and Innovation Research the ZEW contributes the following analyses:

1. Diffusion of environmental innovations in the German economy regarding sectorally specific distribution, distinctions to be made between environmental and conventional innovators with respect to direction and success rate of innovations, and the significance of environmental innovation in Germany in international comparison.
2. The significance of environmental regulations for the introduction of innovations in the German economy regarding particularly the economic success (below or above average) of innovations prompted by regulative interference.

The empirical basis for our analysis is provided by data available from the ZEW Innovation Survey and comparable studies in other countries.