Dr. Hoyer expressed his pleasure at “sharing some thoughts on German-U.S. innovation policy, and the global challenges we must jointly strive to meet.” He thanked the German Institute for Economic Research (DIW) and the U.S. National Academies for bringing together a distinguished group of experts, and shared the view that the preceding symposium in Washington was a successful preparation.
He said that he would like to make three key points: (1) the complexity of global challenges means that cooperation and competition in innovation go hand in hand; (2) the strong American-German economic relationship is the backbone of a cooperative innovation strategy; and (3) to remain competitive, the already vibrant U.S.-German innovation cooperation must be further strengthened.
Innovation, he said, implies something new; but not all things newly created are innovations. It is application, utilization, and ultimately marketability that turns an idea into an innovation. Innovation needs the market, and the market needs innovation. At the same time the challenges faced by innovators today are complex. “The aims of achieving prosperity for all in the face of limited resources,” he said, “the challenges of climate change, energy security, food security—no one nation can address these challenges on its own. The more closely we work together, the more likely we are to find solutions. In a climate of healthy competition, Germany profits from U.S. prosperity, and vice-versa.”
PARTNERSHIP BRINGS BENEFITS FOR BOTH SIDES
Elaborating on the second point, Dr. Hoyer said that the importance of strong American-American relationships becomes clear from the economic relationship between the two nations. The United States is Germany’s most important trading partner outside the EU, and likewise Germany is the top trading partner of the United States in Europe. While the economic crisis slowed trade between the two nations, transatlantic trade has been increasing again since 2009. Bilateral trade amounted to $130 billion in 2010, up from $115 billion in
2009. The figures of foreign direct investment are equally impressive. In 2009, German companies invested an accumulated $334 billion in the United States, the second-largest amount by an EU country, behind the Netherlands. Germany was the fifth-largest foreign investor in the United States with investments of $116 billion. “We see that the transatlantic relationship has come a long way since the Marshall Plan,” he said.14
In addition to the strong bilateral trade and investment relationship between the United States and Germany, Dr. Hoyer said, the two countries have also cooperated in overcoming the global financial crisis within the framework of the G-20. He said that “the collaborative effort is paying off,” and that “the worst of the crisis is behind us.” In Germany the GDP grew by 3.6 percent in 2010, the economy’s strongest performance since reunification. He projected that the performance in 2011 would be at least as good. Total employment had also reached its highest level since unification, with a working population of 40.5 million in 2010. In the United States, growth had resumed also, at a rate of almost 3 percent in 2010, while unemployment was still high at 9 percent.
The occasional divergence of views between the two nations on how to handle the crisis, he said—such as the timing of fiscal consolidation—had so far “served less as an irritant than as a catalyst for more meaningful exchange.” The reason was that Germany and the United States agreed on the fundamental goal of promoting sound, market-driven economic policies in democratic and free societies. “We argue that the role of the state in our two societies is to set the framework for economic activity,” he said, “and provide incentives for innovation.”
Ideas for innovations in both countries come from many directions, he said, including the universities, scientific organizations, think tanks, research institutes, and industry. The German government had just launched a new initiative for electromobility, or e-mobility, to provide the framework for research and development with funding of 1 billion Euros through 2013.
THE NEED TO COORDINATE NORMS AND STANDARDS
Another goal of the initiative is to strengthen international cooperation with regard to norms and standards. Cooperation on standards is an issue not only for the bilateral relationship, but also for the EU as a whole and the United States. Through the Transatlantic Economic Council (TAC), founded in 2007 on a German initiative, the United States and EU cooperate on future-oriented economic issues, including e-mobility. Germany has pushed for including e-mobility on the agenda of the council—again, the catalyze development of
14Under the Marshall Plan, which operated from 1948 to 1951, the United States invested $13 billion in European reconstruction. It also reduced trade barriers, encouraged cooperation, and launched other elements of European integration.
norms and standards which facilitate trade. Because the United States and EU are the world’s most closely linked economic regions, jointly generating 54 percent of the world’s GDP and providing 30 percent of its consumers, “this is not an unrealistic expectation,” he said. With bilateral trade between EU and United States amounting to 15 and 20 percent of their respective trade volumes, and each being the other’s paramount investment partner, the Transatlantic Economic Council can significantly facilitate trade, investment, and innovation at the same time.
In regard to the need to strengthen Germany-U.S. cooperation, Dr. Hoyer said that the Foreign Office actively contributes to this goal, as do the Ministries of Education and Science. “We believe that in order to remain competitive,” he said, “the already vibrant U.S.-German innovation cooperation must be further enhanced.” This cooperation, he said, spans a broad range of topics, institutions, and individuals, and is supported by universities, science organizations, research institutes, industry, foundations, and other stakeholders. Projects for bilateral cooperation range the International Space Station and the Stratosphere Observatory for Infrared Astronomy to basic research in physics, health, energy, and civil security. There is also cooperation on the development and use of hardware, including U.S. participation in the German electron synchrotron (DESY), the Large Hadron Collider at CERN, and a joint project linking the Spallation Neutron Source (SNS) at Oak Ridge National Laboratory with the neutron spin echo spectrometer at the Technical University of Munich. The opening of the Max Planck Florida Institute in Jupiter, Florida, which focuses on bio-imaging, was another milestone in U.S. cooperation.
SCIENCE OUTREACH BY THE FOREIGN OFFICE
The Foreign Office also funds academic exchange programs and scholarships that enable American students and scientists to visit Germany. The growing number of participants reflects the increasing importance of research cooperation as a “pillar of German foreign policy.” Over the years, 20 of the numerous American scientists granted the Humboldt Scholarship to work in Germany received Nobel Prizes later in their careers.
The Foreign Office also operates the German Center for Research and Innovation in New York, which it established in 2010. Dr. Hoyer described it as a cornerstone of the German government’s strategy for international science and research. The center, located near the United Nations, has already strengthened Germany’s visibility as a hub for science and innovation; since its founding, it has hosted 15 major events for American and German partners of science and business and “is making a significant contribution to transatlantic cooperation to help solve global challenges of the 21st century.”
Also, the U.S.-German Framework Agreement on Scientific and Technological Cooperation, concluded in 2009, adds a strategic component to bilateral cooperation. The first meeting of the joint commission was scheduled for the following month under the title Priorities, Opportunities, and Concrete
Projects for Enhanced U.S.-German Cooperation in Science, Research, and Innovation.
Strengthening cooperation with the United States is part of the German government’s strategy for the internationalization of science and research, Dr. Hoyer continued. The central purpose here is to address the challenge of global competition. “And this is going to be the hour of truth,” he said, “because the dynamics of development in other parts of the world is overwhelming. If we do not meet these challenges, if we do not interest our young people science and technology, we are going to lose the technological leadership positions we still have.”
The United States remains the world’s leading nation in science, technology, and innovation, he said, “and thus our preferred and most important partner in this field.” The technological leadership of the United States continues to be built on the contribution of foreign-born scientists and engineers, both permanent immigrants and those who return to their homes. In Europe, Germany is the top location for research, and currently Europe’s engine of economic growth. “However,” he said, “we need more flexibility to allow the immigration of the highly skilled, and to offer additional incentives to attract more scientists, engineers, and other highly qualified people from outside the EU to boost our innovation and productivity.”
Germans closely followed President Obama’s State of the Union address in January 2011, he said. Dr. Hoyer interpreted the president’s central message to be “‘winning the future through innovation and creating sustainable jobs and prosperity.’ I couldn’t agree more.” He said that both the United States and Germany have realized they must give priority to research, science, and education. “Only an innovation-friendly climate and technological progress will allow for sustainable growth, employment, and prosperity.” He said that in Germany, government funding for science, research, education, and innovation was set to rise by 12 billion Euros between 2010 and 2013. The objective is to invest 10 percent of GDP in research and education by 2015—3 percent in research and 7 percent in education. With research and development amounting to 2.8 percent of GDP in 2009, he said that Germany already ranks among the world leaders in this respect, “but we still have a long way to go.”
STRENGTHENING TRANSLATION OF RESEARCH RESULTS INTO PRODUCTS
In particular, Dr. Hoyer said, Germany needs to further strengthen its expertise in translating research results into new products, services, and procedures. The German government aims to do this partly through enhanced cooperation between research and business. The government’s High-tech Strategy 2020 identifies a number of concrete translational goals, such producing as 1 million electric vehicles by 2020, and CO2-neutral, energy-efficient cities. The EU’s own 2020 strategy places education, innovation, and research at the center of European growth policy. In contrast to the tepid
response to the Lisbon declaration, he said, the EU is now taking seriously the need for more effective technology translation.
In addition, he said, both countries would have to prepare for possible new security challenges in the 21st century, such as asymmetric threats. Given the importance of foreign trade and the vulnerability of critical infrastructures, a U.S.-German agreement on cooperation in civil security research was signed in March 2009. It was designed to produce mutual benefits on issues such as visual analytics, cargo security, and detection of hazardous substances. Similar collaboration is under way in climate change research.
Dr. Hoyer concluded by urging even greater cooperation in the fields of renewable energy and energy efficiency, which he called “one of the most decisive markets of the future. The United States and Germany are in a perfect position to lead the development of these markets. If we pool our resources and creativity, the breakthrough of renewable energies worldwide will make our world more secure, more affluent, will help the environment, and create thousands of new jobs in both our countries.”