Until the mid-nineties Germany's pharmaceutical industry was unable to keep up with worldwide developments. This was the case in terms of patenting, as well as the approval of new medicines. The proportion of German pharmaceutical businesses distributing the 50 new active ingredients with the highest global turnover has fallen from 12 per cent at the end of 1980 to 3 per cent at the end of 1990. If Germany is to maintain its role in the international market, the German pharmaceutical industry must successfully undergo the transition from chemical to biotechnologies. This is the conclusion drawn in the report, "Germany's Technological Capacities", which was produced under the direction of the Centre for European Economic Research (ZEW), Mannheim, on behalf of the Federal Ministry for Education and Research (BMBF).