Germany- Land of Innovation?

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Over six months, experts interviewed 60 German entrepreneurs, politicians, researchers, and other professionals in in-depth discussions about Deep Tech in Germany, evaluating their insights. The study was initiated by Münchner Kreis.
The academic project lead is Prof. Dr. Johann Kranz, head of the Chair of Digital Services and Sustainability at LMU Munich School of Management. Tim Kraft, co-author, is a doctoral candidate and research associate at the same chair.

The study identifies five major challenges to Deep Tech innovation in Germany:

1. Complex Bureaucracy: Start-ups face significant obstacles in applying for funding, which often prioritizes bureaucratic compliance over the quality of innovation.
2. Lack of Government as an Anchor Customer: The government does not sufficiently support Deep Tech companies through public contracts, hindering their establishment in the market.
3. Limited Learning from International Successes: Countries like Switzerland and the USA adopt more structured and flexible approaches to Deep Tech promotion, while Germany struggles under the oversight of federal ministries.
4. Shortage of Private Venture Capital: Institutional investors in Europe invest comparatively little in venture capital, stifling the development of innovative companies.
5. Weak Technology Transfer: Connections between research and industry are poorly developed. Universities place little emphasis on transfer activities and lack professional structures to facilitate them.

Prof. Dr. Johann Kranz emphasizes the urgent need for reforms in education, funding, structural organization, and technology transfer to strengthen Germany’s capacity for innovation. He highlights systemic problems in the innovation ecosystem, stressing that the weakest link determines the strength of the entire system. He calls for greater adaptability and risk tolerance among all stakeholders—businesses, government, and academia.

Drawing comparisons to international models, Kranz points to Switzerland’s successful approach, where the focus is on a few strategic areas of promotion. Switzerland’s innovation agency (Innosuisse), unlike Germany's SprinD, operates largely independently without the restrictive oversight of government ministries.

Kranz also underscores the negligible role of technology transfer at German universities, proposing a centralization of transfer offices to improve competence, efficiency, and standards. He criticizes the lack of incentives and structures for translating research into practice. Additionally, he highlights issues with Germany's rigid education system and low competence levels, even at leadership levels, which hinder the understanding and application of innovative technologies like Artificial Intelligence.

The study concludes that Germany still has the potential to achieve a global leadership position in Deep Tech, provided that a fundamental reorientation of its research and innovation focus succeeds. This requires channeling activities and investments more strongly toward Deep Tech.

The manifesto of the Zukunft Studie IX: "Das Deep Tech Manifest. Weckruf für einen schlummernden Riesen" can be downloaded from the Münchner Kreis website.

You can also download the Handelsblatt article on the study here (PDF, 129 KB).