Maximising Growth With The German Innovation Ecosystem

Fueled by a highly-skilled labour force and first-world infrastructure, Germany has become an economic powerhouse on the international front. Within the region, Germany maintains its position as Europe’s largest consumer market. So, how does Germany continue to stay ahead of the global competition? A key driver of its success lies in being at the forefront of innovation.

A global leader in innovation

Germany is underpinned by the drive to continue innovating as seemingly futuristic products or innovations such as AI have already become a part of our daily lives. As this cycle of advancement perpetuates further, future innovations are fast becoming the norm with technological advances.

The German Innovation Ecosystem was initiated with the goal of improving the competitive edge of German companies. Correspondingly, this stimulates long-term economic growth, prosperity and creates new jobs for Germans. This propelled the country to be regarded as one of the most innovative in the world.

Robust government policies

Act on Tax Benefits for Research and Development

Also known as the Research Allowance Act (or Forschungszulagengesetz in German), eligible companies are able to access up to €500,000 of tax credits per year for selected R&D projects. Companies can either receive cash if their tax liability exceeds tax credits or have the amount credited against their tax liability.

There are 3 types of R&D projects under this category including contract research with research companies based in the EU, cooperative projects with other organisations such as universities or in-house R&D projects. The act supports R&D projects in all fields for basic research, experimental development and industrial research.

Transfer initiative

The transfer initiative stems from the concept of “from the idea to market success” (Von der Idee zum Markterfolg) which helps companies transform their research data into actual products or services. This initiative by The Federal Ministry for Economic Affairs and Energy (BMWK) assists companies to overcome innumerable challenges along with the different phases of the innovation process.

Strong intellectual property (IP) regulations

Another factor that complements its innovation policies would be Germany’s strong intellectual property regulations. Businesses heavily invested in R&D with innovative products that require patents, copyrights and/ or trademarks would find Germany an alluring R&D investment destination.

Competition laws are strict ensuring that competitors do not easily spread untrue rumours or claims about another company’s product in order to win over their customers.

An adequate supply of skilled workers

To ensure long-term success, companies in Germany also benefit tremendously from a large number of highly skilled graduates and qualified professionals.

Hiring locals more often than not translates into gaining access to the regional network of industry partners and scientific institutions, which in turn guarantees more cooperation opportunities, further boosting economic success and innovation.

Considering business expansion to Germany? 

Speak with an expert to find out how you can grow your business with the German Innovation Ecosystem today.

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