Innovation in Germany - Research and Development

High Innovation Rate

German companies are in the top tier of global leaders in the development of new technologies. The trend towards digitalization is accelerating in the continued growth of German industry and trade. In 2023, Germany exported high-tech goods to the value of EUR 236 billion – making the country the top high-tech goods exporter in Europe and third worldwide.

Strong Innovation Performance

Germany’s dynamic and innovative research and development (R&D) environment enjoys an excellent reputation – a fact regularly confirmed by leading international organizations. Germany ranks fourth in the EU after Sweden, Finland and the Netherlands in the 2024 Global Innovation Index published by the World Intellectual Property Organization (WIPO). Germany is similarly among the strong innovators in the European Commission’s European Innovation Scoreboard (EIS) 2024. Germany is a prime destination for R&D projects.

Further proof of the “world-class performance” of German R&D departments is provided by the results of American Chamber of Commerce in Germany (AmCham) reports. In 2024, some 97 percent of the American companies surveyed rated Germany’s quality of research & development as being “good” or “very good.” The survey further highlights the quality and availability of skilled employees as well as the regulatory environment for R&D. 

European Patent Leader

The great innovative power of German companies can be seen in the number of patents filed. In 2023, some 24,966  patent applications originating in Germany were registered by the European Patent Office - more than twice as many as French applications alone. Germany also leads Europe in triadic patent applications - the series of corresponding patents filed at the European Patent Office (EPO), the United States Patent and Trademark Office (USPTO) and the Japanese Patent Office (JPO). With around 53 patents per one million inhabitants, Germany occupied fifth spot in Europe following Switzerland, Sweden, Denmark, and Finland in 2021.

Industry Potential to Invest in Research and Development

Germany's position as a high-tech location is no accident. Companies invest significant sums in order to continually bring innovative products and services to the market. According to the Joint Initiative of German Industry for Promoting Science and Humanities (Stifterverband für die Deutsche Wissenschaft), internal economy-related research and development expenditure accounted for EUR 81.8 billion in 2022.

Rising R&D Spending

Germany invests enormous sums in the development of new technologies and innovations. No other country in Europe invests a greater amount of money in R&D.  Germany’s R&D spending has been rising constantly for almost a decade.

In 2023, public and private spending on research projects in Germany amounted to approximately EUR 129 billion – representing 3.1 percent of gross domestic product (GDP). This puts Germany in fourth place in the EU – only behind  Sweden, Belgium and Austria but significantly ahead of the EU average and France.

Germany has already achieved the three percent GDP spending goal specified by the European Union for the sixth time in a row. More than two thirds of R&D spending originates from the business enterprise sector.

R&D Personnel

Germany is home to the biggest R&D community in Europe – 26 percent of the scientists and engineers in the EU live and work here. Moreover, researchers located in Germany are engaged in projects all over the world. The Max-Planck-Gesellschaft currently cooperates with international partners in more than 120 countries.

Renowned Research Institutes

Germany enjoys a unique global position thanks to its publicly subsidized research facilities outside the university sector.

The application-oriented research facilities, the Fraunhofer-Gesellschaft and the Leibniz-Gemeinschaft, provide mostly SMEs with access to top R&D facilities. The Fraunhofer-Gesellschaft currently holds R&D funds of EUR 3.4 billion which are used to finance projects in more than 76 institutes with over 32,000 employees. A considerable part of the Fraunhofer budget is raised through contract research in collaboration with the private sector. The network of the Leibniz-Gemeinschaft comprises 97 institutes and around 21,400 employees. 

Renowned institutes for basic research are also located in Germany. The Max-Planck-Gesellschaft and the Helmholtz-Gemeinschaft enable companies to outsource costly basic research, thereby reducing the risks associated with new product and technology development. The close interaction between universities, non-university research institutes and industrial R&D departments forms a unique infrastructure for the creation of new knowledge that is unrivaled in the world. The entire range of R&D activities – from pre-competitive basic research supported by the public sector to application-oriented research financed by the private sector - can be found in Germany.

Effective Networks of Competency

Germany is characterized by an advanced landscape of highly innovative regional networks and clusters that provide companies with  access to excellent technologies and know-how. Interactive research and learning processes ensure a faster diffusion of technology – including the subsequent introduction to the market.

A special quality seal is membership of the “go-cluster“ initiative of the Federal Ministry of Economic Affairs and Climate Action. This initiative includes around 70 clusters that meet strong criteria for membership. Admission depends on the level of cooperation between industry and science. This includes the extent to which a potential member is actively dedicated to innovation. Additionally, “go-cluster“ membership facilitates access to funds for the development of special cluster services.

Hepatitis Treatment

Scientists from the German Center for Infection Research (DZIF) in Heidelberg and Hamburg have successfully concluded a preclinical study on a monoclonal antibody, VIR-3434, to combat hepatitis B and D. The antibody was discovered by American company Vir Biotechnology. Some 300 million people worldwide suffer from hepatitis B. Clinical testing is underway.

Viruses Versus Bacteria

Researchers at the Max Planck Institute for Evolutionary Biology in Plön are exploring how to genetically engineer “phages” to combat bacteria resistance. Phages are viruses that can only infect bacteria. By understanding more about how bacteria evolve, it is hoped that time and money can be saved in the development of phage therapeutics.

AI Autonomous Driving

The Fraunhofer Institute for Reliability and Microintegration (IZM) – together with a trio of German companies and the University of Bielefeld – has developed improved integrated sensor systems to aid autonomous driving. The concept uses AI algorithms to allow cars to detect fine details at expanded ranges, allowing the number of autonomous driving radar stations on highways to be reduced.algorithms to allow cars to detect fine details at expanded ranges. That would allow for fewer autonomous driving radar stations on highways.

Recovering Raw Materials

A team from the technical university TU Bergakademie Freiburg has come up with an improved process for recovering the precious metals used in electrolyzers. Employing a hydrometallurgic method and a newly developed process for separating individual metal ions, the scientists achieved a recovery rate of 90 percent. Electrolyzers are central to Germany’s ongoing build-up of an economy for hydrogen as an energy carrier.

Avoiding Space Collisions

Scientists from the Technical University of Darmstadt and the European Space Agency have devised efficient algorithms allowing satellites and spacecraft to avoid collisions. The novel system can track up to one million objects, compared with the 30,000 currently followed. It mathematically derives objects’ positions one to two weeks in advance.