Culture change

Germany can’t be smug about its top innovation ranking

Businesswoman wearing VR glasses in office
Germany is so good at innovating it can do it hands-free. Source: Picture Alliance

Germany finished top of a new global ranking of the world’s most innovative countries. Its economy is particularly good at turning inventions into marketable products, the study by the World Economic Forum (WEF) said. But that’s not enough to stay in front.

What’s more important is having a culture of innovation driven by creativity, entrepreneurial spirit, rapid adaptability and the readiness to take risks. Germany’s good in this respect too, but it’s no longer a world leader. The US in particular, and China too, are ahead of us here. And in the digital economy, the winner takes all. Even third place isn’t enough if the two leaders corner the market, as the US and China are doing right now in key artificial intelligence technologies.

In the digital revolution, the Germans, once pioneers, have fallen behind the curve. That doesn’t mean the German economy missed the boat. Our engineers have long been hard at work employing digital technologies in industrial applications as part of a national drive to develop “Industry 4.0,” as the Internet of Things is called here.

Good luck catching up with Google

But in future, optimizing technologies that have in many cases been invented by others won’t be enough to clinch the top spot. Today’s pioneers are reaping the rewards of digital change and digital business models to a far greater extent and for far longer than used to be the case. Traditional German virtues like perfectionism and premium-quality production won’t be enough to catch up.

That’s evident when you take a look at the platform-based models of Internet giants like Google, Facebook and Amazon. These pioneers have managed to establish an almost unassailable lead in a very short time with the help of their networks. And to date, no one has succeeded in establishing their own business model to seriously rival them. In theory, growing public skepticism of the data kraken of Silicon Valley could give European newcomers the chance to get into the market. But so far, that’s remained wishful thinking.

If Germany wants to defend its lead in innovation it will have to do more than perfectly manage innovation processes. It needs to become more open to disruptive ideas and influences. That’s a cultural leap and if it doesn’t happen, Germany will become yesterday’s world champion — like in soccer.

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