5 Fraunhofer publications on innovation

A future agenda for more innovative capacity – Innovation for Transformation

Innovation is crucial to prosperity, and to solving the urgent societal problems of our time. However, Germany needs more innovative capacity if it wants to continue to keep pace with other countries and regions across the globe – particularly with regard to cutting-edge technologies. A Bertelsmann Stiftung study examining good practices worldwide shows how fostering innovative capacity to increase competitiveness while advancing societal progress can unlock innovative potential.


Urgent need for action with regard to innovation, but also great potential

Germany’s reputation as a country of innovation featuring excellent basic research, fertile research institutions and innovative companies is undisputed. The country clearly harbors enormous innovative potential. But a closer look shows that the national scale of innovation has declined somewhat in recent years. Germany rarely delivers so-called disruptive innovations, the number of startups in the country is falling, and the process of digital transformation has stalled. At the same time, we face several grand challenges and societal problems such as climate change, natural resource limitations and the aging of populations.

Given these challenges, a declining or stagnating innovative capability is very problematic for Germany and Europe. We are lagging behind in technology – and are thus putting the economic well-being and future viability of our societies at risk.

Dr. Brigitte Mohn, Member of the Bertelsmann Stiftung Executive Board

Because the existing instruments and policies for managing these challenges have proved insufficient, we need entirely new approaches. Innovation is a key driver of transformative change targeting a socially and environmentally sustainable economic and societal order – provided that the right underlying conditions are in place. There is a great need for action in Germany, but also an enormous store of innovation potential, which should be boldly and ambitiously leveraged.

Together with the Fraunhofer Institute for Systems and Innovation Research (ISI) in Karlsruhe, the Bertelsmann Stiftung has examined how to unlock this potential in ways that promote innovations that foster competitiveness, as well as well-being and societal progress. As part of the Reinhard Mohn Prize 2020 project, the research team analyzed good practices worldwide, along with specific policies, institutions and mechanisms from 13 countries with proven success. The findings are now featured in four comprehensive results papers and an “Agenda for the Future,” all under the title of “Innovation for Transformation.” A series of actionable recommendations for German and European policymakers are at the heart of the “Agenda for the Future: Innovation for Transformation” report.

Formulate ambitious goals, promote disruptive innovations, strengthen support for startups

The study’s authors point to a pressing need for far-reaching changes. Essential to such changes is a successful innovation policy driven by a proactive state that has the power to act and features effective institutions. Innovation policy here in Germany should therefore target more meaningfully cross-sectoral goals worked out between a variety of stakeholders in society – for example in the area of green growth, or the principles-based development of digital technologies. Institutions should also be adapted, which can include creating an innovation agency that acts as a change agent. A change agent of this kind could help orient those engaged in innovation to target the achievement of societal transformation goals and improve the implementation of mission-oriented innovation strategies. The success of institutional practices in other countries, for example in the design of Sweden’s Vinnova innovation agency, Israel’s Innovation Authority or the United Kingdom’s Nesta, are worthy of a closer look.

The agenda also calls for strengthened efforts to promote dialogue and networking between the state, the business sector, research institutions and civil society. “It’s crucial to think beyond sectoral borders and silos, especially when developing solutions for societal problems. Open, participatory innovation processes help us all gain a better understanding of the problem – which leads to well-tailored solutions,” said Dr. Daniel Schraad-Tischler, director of the Bertelsmann Stiftung’s “Shaping Sustainable Economies” program. For example, existing (regional) innovation centers could be expanded to target and include input from civil society. They can also be given the mandate to achieve specific objectives of transformative change, as has been done with science parks under the Swedish model.

Another highly promising approach identified by the authors of the study involves providing more intensive support for disruptive high-tech innovations and creative startups. Because too many good business ideas fail at the commercialization stage, the authors advise making startup funding more flexible. They also advocate slating support for high-risk projects – especially those that promise to make a valuable contribution to society. Emulation-worthy examples of this kind of support can be found in Switzerland, the United Kingdom and Israel.

“There is undoubtedly a great need for change. Yet it is precisely the deep disruptions caused by the coronavirus crisis that now offer a valuable opportunity to adapt societal and economic priorities, and to combine them meaningfully with an agenda for more innovative capacity. Doing so allows innovation to become the key to greater sustainability,” said Dr. Jan Breitinger, a Bertelsmann Stiftung innovation expert.

It should also be noted that despite all the problems, the environmental conditions for innovation policy in Germany and Europe are better than ever before. We should take advantage of this, and work keenly and ambitiously to solve the challenges of our time.

Dr. Brigitte Mohn, Member of the Bertelsmann Stiftung Executive Board