Excerpt from the study

Germany is finding it ever more difficult to defend its top position as an industrial location: global competition is intensifying. Emerging economies are striving to become high-tech centers, not merely manufacturing locations. To this end, they are investing massively in education, research and development. This is reflected in their R&D spending, specialist trade publications, patents and shares of global trade in research-intensive goods, among other indicators. China, for instance, surpassed Germany in R&D spending in the chemical-pharmaceutical industry in 2010. With a share of 27.6 %, Chinese specialist publications are now the leader
in the chemical sector. Germany’s portion, by contrast, fell from 8.3 % (2000) to 6.2 % (2014).

Furthermore, industrialized nations such as the US, Japan and South Korea are also stepping up their innovation processes. They are additionally aided by local advantages, for instance low energy and raw-material costs in the case of the US and countries in the Middle East. In Germany, on the other hand, industrial production has virtually stagnated. This threatens to have a negative impact on the value chains of the entire industrial innovation network.

As Germany cannot compete with regions like Asia on cost, innovation leads are becoming increasingly important. The innovation capacity of the German industry is an important key to securing the competitiveness of the industrial location.