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Innovations hold the potential to solve some of the world’s most pressing problems. Whether it’s climate change, poverty or disease: They can improve our quality of life, advance economic growth and help companies remain competitive.
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| | With its focus on “Innovation”, the February 2023 edition of the ZEW Monthly provides insights into current innovation research at ZEW. Our researchers investigate innovation activities, success factors of innovations in companies as well as political and institutional framework conditions that promote or also hinder innovation activities. This allows us to identify starting points to successfully foster innovations. |
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RESEARCH ON INNOVATION
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HIGHER INNOVATION SPENDING AND MORE COMPANIES ACTIVE IN R&D
| German companies increased their innovation spending in 2021 by 4.7 per cent to 178.6 billion euros. This significant increase has made up for the decline in 2020, when innovation expenditure fell by 3.6 per cent to 170.5 billion euros due to the pandemic. However, the pre-pandemic level from 2019 (176.9 billion euros) was only slightly exceeded. At the same time, the number of companies continuously conducting R&D rose by almost eight per cent and reached a new high of around 42,000. These are the findings of the Innovation Survey 2022 (in German only), which ZEW Mannheim conducts annually on behalf of the German Federal Ministry of Education and Research.
↗ More about the ZEW study
| GERMAN R&D TAX CREDIT GAINS MOMENTUM
| Companies are increasingly making use of the R&D tax credit (“research allowance”) introduced in 2020. So far, more than 7,200 companies have submitted over 14,000 projects for approval. With 953 applicants and 2,337 projects, mechanical engineering is the sector with the most applications (as of the beginning of November 2022). There, the number of applicants and the number of applications submitted have increased by 94 and 125 per cent respectively in the last twelve months. And these numbers are expected to rise further. These are the findings of a study conducted by ZEW Mannheim on behalf of the German Mechanical Engineering Industry Association (Verband Deutscher Maschinen- und Anlagenbau – VDMA).
↗ More about the ZEW study
| RED TAPE AND DATA PROTECTION ARE STALLING INNOVATION IN GERMANY
| The Commission of Experts for Research and Innovation (EFI) presented their annual report to German Chancellor Olaf Scholz. The presentation of the report is overshadowed by the recently announced decision of the biotechnology company BioNTech to relocate its cancer research to the UK. ”We have been idle in Germany for far too long. Rather than advancing necessary reforms in the R&I system, we have allowed them to be delayed, and instead paid compensations and established expensive parallel structures. This needs to change to ensure Germany will continue to be an attractive research location in the future,” states Professor Irene Bertschek, head of the “Digital Economy” research unit at ZEW Mannheim and vice chair of the Expert Commission.
↗ More about the ZEW study |
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AT A GLANCE
| ↗ MORE PUBLIC UNIVERSITY FUNDING – MORE INNNOVATION IN COMPANIES?
| In 2006, the German government decided to strengthen top-level research at German universities in a new way within the framework of the Excellence Initiative. The three lines of funding, Clusters of Excellence, Graduate Schools and Future Concepts, have lastingly revitalised university research.
A recent study by ZEW Mannheim analyses how the Excellence Initiative has benefited innovation in private companies. The study shows that of the three funding lines, Clusters of Excellence are so far the only programme to impact innovation activity in local companies – under certain conditions. |
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CURRENT ZEW RESEARCH
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| ↗ ISLAND RESIDENTS HESITANT ABOUT PARCEL DELIVERY VIA DRONES
The majority of the residents of the North Frisian Islands and the Halligen oppose the idea of an initiative aiming to employ drones to close supply gaps. In interviews with researchers from ZEW Mannheim, the Leibniz University Hannover and the aviation researcher Bauhaus Luftfahrt, the residents voiced concerns – primarily regarding environmental protection, sustainability, appeal to tourists and whether drones can be deployed in bad weather conditions.
↗ LABOUR MARKETS: TAKING IN REFUGEES CREATES NEW JOBS
The accommodation of refugees in 2015 and 2016 not only benefited the migrants themselves, but also the regions that received them. New employment opportunities were created for locals in the host regions as various support services were made available to refugees at the local level. These included accommodation, alimentation, social support and assistance with asylum applications. In this way, statistically speaking, one job subject to social security contributions was created for every 2.4 refugees, as a recent study by ZEW Mannheim in cooperation with the Institute for Employment Research (IAB) and the Federal Ministry for Economic Affairs and Climate Action finds.
↗ MORAL APPEALS PROMPT EMPLOYEES TO REDUCE CAR USE
Companies can make an important contribution to reducing CO2 emissions through so-called mobility budgets in combination with behavioural nudges. A field experiment conducted by ZEW Mannheim proves that in the context of a mobility budget the use of cars can be reduced by specific moral appeals and social comparisons via e-mail to employees. |
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↗ TOWARDS A EUROPEAN INDUSTRIAL POLICY
| | Massive industrial policy interventions in China and the US have put pressure on Europe and Germany to reposition themselves in terms of competitiveness and innovation. There is a danger that Germany and Europe will respond with protectionism, an unproductive subsidy race and national solutions. If Europe wants to be successful and avoid deindustrialisation, it must go its own way, focusing on three aspects above all: Innovation through proactive investment in research and development, a strengthening of competition in Europe and worldwide, and a deepening of the internal market instead of national solo efforts. It is above all Germany’s responsibility to act in this regard. |
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EVENTS
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↗ #ZEWlive
No Forecast for Winter 2023/24
| As a result of Russia’s war of aggression against Ukraine, gas exports from Russia to Germany decreased significantly from spring 2022 onwards. Business, politics, and private households feared a gas shortage. The Federal Network Agency prepared for potential gas rationing. Fortunately, the worst case did not come to pass. But will this remain the case in the future? Will Germany at some point run out of gas? Energy supply in times of crisis was the focus of the digital format #ZEWlive on
15 February 2023, in which Klaus Müller, President of the Federal Network Agency, and
ZEW President Achim Wambach engaged in a discussion.
| UPCOMING
↗ AGEING AND SUSTAINABLE FINANCE
| | ZEW Mannheim is pleased to announce a conference on ageing and sustainable finance on 27 and 28 April 2023. The two-day event provides a stimulating environment for in-depth debates on the effects of demographic change and climate change on financial markets and their various players, on the policy implications of recent research, and on new research questions arising from policy responses. Keynotes will be presented by Anders Anderson from the Stockholm School of Economics, Steven Ongena from the University of Zurich and Susan Thorp from the University of Sydney. |
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→ CONTACT FOR QUESTIONS OR SUGGESTIONS ON THE CONTENT
| | Dr. Frank Herkenhoff | frank.herkenhoff@zew.de |
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