On 17 January 2017, Federal Minister of Economics (BM) Sigmar Gabriel had invited to a symposium “Germany’s Future – Innovation agenda # 2025” to Berlin. The objective was an open discussion and analysis, which modernization tasks are necessary for Germany. That is why BM Gabriel invited international experts from the fields of business, science and politics to take a position as a podium participant.
In addition to a keynote, there were two panels dealing with (1) the mobilization of investments for innovation and (2) the topic of education and the future of work. In the following, only reference to panel 1 is taken.
Need for investment in Germany’s future
BM Gabriel initially explained the initial situation from his point of view. Progress also means destruction, and must be cushioned in a social market economy. Currently, there is a tendency for foreclosure among economies. This does not make sense from his point of view, and the ship command “Schotten dense” with a sinking ship. He called for the good economic situation in Germany to be used to invest in the future – i. e. to invest the tax surpluses, for example, in fast digital networks and not to return them as tax returns to citizens. This can be realized in the form of level of companies is currently too low.
Reconsidering its own strengths for the creation of innovations for all
Kent Walker, General Council of Google, emphasized in his keynote the strengths of Germany, which have shown in the past. A pragmatic, progressive approach created by engineering, which in the past has created pioneering innovations that benefit everyone. Germany should refer to this strength and look for new solutions to emerging challenges in the new situation of the Internet and other new technologies. As an example, he described the flexibilisation of the economy and the world of work and the need for permanent training and the creation of new social security. He said that Google plans to build a new campus in Berlin.
Need to mobilize investment for the future
Investments are the benchmark for a country’s future. Due to the current good economic situation, too few investments are made in Germany for the future. The state has the task to take action here and to invest and promote investment in the appropriate fields of research, which are aimed at solving central questions of the future. In a panel, invited experts presented their advice for Germany.
State mission-oriented investment as the basis for innovation
Prof. Mariana Mazzuato pointed out that a patient, long-term oriented funding of German research institutions like Max Planck Institutes, Fraunhofer Institutes or also kfw is important. It is important that the financial resources should not be distributed with the watering can, but should be given clearly “mission-oriented”. Examples of such missions include energy, healthcare, electric mobility. In her opinion, all so-called smart technologies are to be funded publicly in order to create the basis for entrepreneurial activities. The state must assume the role of a so-called lead investor.
For example, the US government’s 2009 initiative, which has been massively mission-oriented, has supported Tesla, among others, with funding of almost USD 1 billion to drive electric mobility. Mission-oriented funding is to be distinguished from sector financing, since this type of financing is very specific and funds concrete solutions for clearly defined challenges. Such an approach can, for example, be implemented by kfw with targeted investment funds. To this end, the state can also promote appropriate issues through appropriate procurement policies.
Education, infrastructure and innovation as elements of economic prosperity
Prof. Marcel Fratzscher, the German Institute for Economic Research (DIW), named the key elements for future economic prosperity, education, infrastructure and innovation. In the case of infrastructure, he referred to the digital infrastructure. Investments between EUR 60 billion and EUR 100 billion are necessary in Germany alone in order to reach a sustainable competitive level. He called for the use of the current golden years for investment in the future. For this, it is also necessary to adopt a different mentality with regard to risk taking in Germany and to see it as normal that one can also fail.
Central role of proactive industrial policy
Catalin Voss, entrepreneur in Silicon Valley, with German roots, requested the role of a necessary proactive industrial policy. Elements of this policy are the promotion of structures such as universities and research facilities and investment in innovative infrastructures. As an example, he mentioned the possibility of investing in the infrastructure for future autonomous driving on the German road network as a state to promote this technology. But there is also a cultural change needed for more innovations in Germany and the interest to use new approaches and concepts such as design thinking.
The event made it clear that the federal government must play a much more active role in the promotion of innovations. This support must, as far as possible, be focused on specific so-called missions addressing key issues for society. This promotes entrepreneurial solutions. The long-term nature of the funding of these areas is important. This approach should start as soon as possible, as long as the German economy is still ‘buzzing’.
To watch panel 1, please click here.
For more information on this event, please click here.