THE “MITTELSTAND” PROGRAMS AND INNOVATION IN GERMANY

Rainer Jäkel
Head, Directorate for Technology and Innovation Policies
Federal Ministry of Economics and Technology (BMWi)

Dr. Jäkel said that it was a big honor to participate in this workshop, and urged his fellow participants not to forget “the ‘i’ at the end of BMWi, “because I hope we are as innovative and successful as the company that uses the ‘i’ in front of its products.” He also greeted colleagues from the US federal agencies, especially the National Institute of Standards and Technology (NIST), because “a lot of what we do is closely related to what NIST is doing. One is to support SMEs, and we are also responsible for the German Metrological Institute and the Institute for Materials Research.” He said he had been honored twice to visit NIST.

Dr. Jäkel offered several remarks about the strengths and weaknesses of German programs that support small and medium-sized businesses. He reiterated Mr. Schütte’s observation that Germany has a high proportion of innovative and research-intensive companies, many of which are medium-sized. Of the total R&D expenditures in Germany, more than two-thirds are made by companies, with the state responsible for only a small proportion. “I think this is a sign of the strength,” he said, with the result that Germany is a large exporter of technology products, ahead of the U.S. and Japan.

The more significant strength, he added, is the well-trained human capital, especially of engineers and skilled workers. Germany’s economic strength is reflected by its standing as by far the largest applicant for patents at the European Patent Office. No less important, he said, is the excellent research infrastructure, with the Fraunhofer institutes playing a lead role in technology transfer. Equally significant the roles are played by the Max Planck, Helmholtz, and Leibniz Institutes. He noted that all of these strengths were confirmed by a new survey released shortly before the symposium by the American Chamber of Commerce in Germany.

Among weaknesses, Dr. Jäkel said, was that much of the country’s R&D is confined to only a few sectors, notably the automotive sector, which accounts for a more than a fourth of R&D expenditures; machine construction; electrical engineering, and a few others.

On the other hand, he noted, much advanced technology developed in these industries finds its way to uses in media industries and other traditional areas; this integration of advanced technologies into traditional areas he saw as a particular strength.

A weakness that had already been described, he said, was the “substantial deficit” in start-up financing and venture capital, especially when compared to the U.S. “This is a weakness that we must do something about,” he said. The education system is also underfinanced, he said, which poses a grave



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