Despite generally positive developments, however, there is a catch: structural deficits remain an issue. This finding was published in 2000 in the most recent audit of Germany's technological performance, "Zur Technologischen Leistungsfähigkeit Deutschlands". Nevertheless, the audit, carried out under the direction of the Centre for European Economic Research (ZEW), does consider increased innovation activities to be essential if Germany's technological basis is to be widened. This is necessary if the German economy, and the economy in Baden-Württemberg, is to remain internationally competitive in the long run.
Germany's technological capacities, which are addressed by the study, are particularly influenced by developments in the automotive industry. The significance of this industrial sector for German innovation has continued to increase throughout the last two decades. More than a quarter of all expenditure on R&D is now made in this sector. The sector plays an important role, driving technological advancements in the chemical industry, in electronics, in electromechanics, as well as in the telecommunication sector. As a result of the strong presence of automotive industries in Baden-Württemberg, the economy of this region serves as a significant pillar in Germany's overall technological capacities.
It is primarily the automotive manufacturing companies and their local suppliers that Baden-Württemberg owes its R&D intensity (R&D personnel as a proportion of all industry staff), which is the highest throughout Germany. A significant proportion of all R&D staff in Germany are employed in Baden-Württemberg. Stuttgart for example, where 12 per cent of all R&D personnel in Germany are employed, ranks alongside Munich as one of the most R&D-intensive regions in Germany. The Rhine-Neckar region, with 6 per cent of all R&D staff, also takes its place in the top rankings.
These R&D activities bear ripe fruits. In terms of the number of people of working age making patent registrations, Baden-Württemberg ranks first amongst all German regions. With around 1,240 patent registrations per million inhabitants of working age, Baden-Württemberg has 15 percentage points more than Munich, which ranks in second place in the German patenting list. Patenting activities are distributed across many regions (Map 1). Alongside Stuttgart, the regions of Bodensee-Oberschwaben and Ostwürttemberg also deserve a mention. Above all, Baden-Württemberg owes the patenting activities in the automotive and mechanical engineering industries the success of its economy. Whilst the patenting activities in the automotive industry are almost exclusively confined to Stuttgart, four out of five regions in Baden-Württemberg are listed amongst the "top five" mechanical engineering regions. For Baden-Württemberg, as for Germany as a whole, the strong focus on "automotive" innovation is associated with a number of risks. This sector is particularly affected by significant cyclical developments. Wider implementation of innovation activities is therefore necessary in order that further innovative mainstays, in addition to the automotive industry, are developed. Use can be made of existing sectors; measurement and control technology, electrical engineering and information technology, in which Baden-Württemberg already adopts second place behind Bavaria in terms of patent intensity.
On the whole, the German economy is strongly characterised by sectors of so-called high-value industries. These include economic fields which make efficient use of technological developments and systematically implement these to achieve economic success. In view of new competition in this area in which Germany has traditionally been particularly strong, the orientation of innovation activities towards this sector is associated with particularly high risks. The development of an economy which is increasingly characterised by knowledge-intensive service sectors, a development which was witnessed in many other countries sometime ago, has only come about in Germany in the last few years.
In Baden-Württemberg, an orientation towards traditional industries remains apparent. It is due to the strength of its established and large industrial firms that Germany has a below average number of new firm establishments, above all in the service sector. With around 50 establishments for every 10,000 people of working age, the rate of new business establishments is well below the West German average of 64, as well as under the rates recorded for Hessen (67), North Rhine-Westphalia (66) or Bavaria (60). Closer examination of new firm establishment indicates, however, that Baden-Württemberg is also a Federal state in which many firms are comparatively open to implementing new technologies. The proportion of technological industrial sectors and service sectors is particularity high in this Federal state (Graphic 1). This consists mainly of businesses which locate within the vicinity of other large and successful industrial firms. However, several weaknesses can be seen in relation to non-technological service providers. This is also a result of the strongly industrial nature of the Federal state.