Innovation in Germany: Is the German Economy Still on Course for Innovation?

Innovation expenditure by German companies rose again in 2019, reaching an all-time high of 176.9 billion euros. However, the increase remained slightly below expectations from the previous year. Innovation expenditure increased strongly once again, particularly in the service sector. Overall, the rise in expenditure on innovation came primarily from large companies. There has also been an increase in innovation activity. The amount of companies with continuous research and development (R&D) reached a high of 10.9 per cent. On the contrary, investments related to planned innovation projects have taken a hit. German companies recorded a decline in their turnover concerning product innovations in 2019. In total, they generated a turnover of 744 billion euros, a decrease of more than 6 per cent compared to the previous year. In the period 2017 to 2019, 46.0 per cent of companies in Germany made noticeable changes to their business models. The most frequent business model innovation involved the inclusion of new suppliers or cooperation partners. Innovation in the core area of the business model rarely occurred. Overall, the digitalisation of business models is well advanced.

About the ZEW Innovation Survey:

  • Since 1993, ZEW has been collecting data annually on the innovation behaviour in the German economy
  • The Innovation Survey is carried out on behalf of Federal Ministry of Education and Research (BMBF)
  • Cooperation partners are the Institute for Applied Social Sciences (infas) and the Fraunhofer Institute for Systems and Innovation Research (ISI)
  • 47 Sector Reports currently present the results of the annual innovation survey for groups of manufacturing and service industries