Germany - Research and Innovation performance
The country profiles aim to provide an operational tool for stakeholders and policy-makers to support the framing of research and innovation (R&I) policies and to facilitate the monitoring of performance, on the basis of a holistic economic and indicator-based analysis.
The challenge of maintaining a high innovation capacity for an export-oriented economy
Germany has expanded its R&I system over the last decade. Expenditure on R&D has grown substantially since 2000 to reach 2.84 % of GDP in 2014, which is already close to the 3 % national target for 2020. The increase in public and private expenditure on research and development in Germany has helped to maintain a high innovation capacity and a strong export performance. The German economy is based to a considerable extent on medium high technology sectors, such as automobiles, electro-technical products, machinery, and chemical products. However, over the last decade, Germany has lost its strong market position in pharmaceuticals and in optical industries.
Recently, it has only produced a few successful new international players in high-tech industries. There is also still underexploited growth potential as regards innovative and knowledge-intensive service economy sectors. An ageing population with a declining share of young people represents challenges for the German economy.