Inclusive Growth for Germany 18: Technological Innovation and Inclusive Growth in Germany

Our study “Technological Innovation and Inclusive Growth in Germany” by Wim Naudé (University of Maastricht) and Paula Nagler (University of Rotterdam) sheds light on how technological innovations affect inclusive growth. In the public debate, disruptive innovations through trends like digitization and automatization are often discussed with plenty of scepticism: these trends are often seen as a threat to jobs and thus the well-being of many in the workforce. However, it is quite clear that these trends are not reversible and are already embedded in today’s economy.
The results of the study show that technological innovations do not hamper inclusive growth. Quite the opposite: the data show that the stronger technological innovations penetrated the German economy, the stronger the welfare benefits have been. Thus, the results indicate that economic policy aimed at both pure economic performance and battling inequality at the same time should focus on an environment in which technological innovations can thrive. The authors discuss several short-term and long-term levers for economic policy conducive to innovations-driven inclusive growth.