Meeting Global Challenges German-U.S. Innovation Policy: Summary of a Symposium (2012) / Chapter Skim
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While recognizing their differences in approach to these challenges, participants on 1 See National Research Council, Rising to the Challenge: U.S. Innovation Policy for the Global Economy, Charles W
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Innovation Policy for the Global Economy, Charles W Wessner and Alan Wm.
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The Fraunhofer Institutes, for example, have seven research centers in the United States, and the Max Planck Society now has a Center for Bio-Imaging in Tampa, Florida. There are more than 50 bilateral cooperation agreements between individual institutions on topics ranging from earth sciences to energy physics to public health.
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And both countries have set the common objective of investing more than 3 percent of GDP in public and private research and development. In both countries, the universities, federal labs, and industrial laboratories conduct research that leads to breakthrough products and new companies.
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Some of these were described by Ambassador Murphy and Minister of State Hoyer at the symposium. Cooperation on Renewable Energy: Ambassador Murphy noted that the United States formally joined the International Renewable Energy Agency, or RENA, on March 4, 2011.
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The Foreign Office also operates the German Center for Research and Innovation in New York, which it established in 2010 in the federal Ministry of Education and Research.
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"In almost all types of advanced technology, it is American research centers and enterprises that are leading," said State Secretary Schütte. At the same time, he said, the United States is challenged to maintain this leadership as it recovers from the recent economic crisis and faces new competitive pressures.
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A fourth strength is its generally efficient capital markets, particularly the availability of venture capital and other risk capital. Finally, he said, technological success is supported by government investments in R&D, which are "markedly higher than in Germany and Japan." These factors combine to create opportunities for disruptive innovations that are "significantly greater than in Germany and Europe." Several participants highlighted the American "entrepreneurial culture" as a key feature of the U.S.
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In this regard, Ginger Lew, then of the National Economic Council, noted that creating an environment conducive for entrepreneurship was a key element of U.S. innovation policy, adding that in terms of policy, the country prefers to promote innovation with a "light touch." In his symposium presentation, John Fernandez, then Assistant Secretary of Commerce, said that U.S.
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Startup America is investing $2 billion to help entrepreneurs by lowering barriers to high-potential, fast-growing small companies, especially in high-tech fields such as clean energy, nanotechnology, biotechnology, and advanced manufacturing. Another new program, the Task Force on Advancing Regional Innovation Clusters (TARIC)
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While the U.S. has more of an entrepreneurial economy, explained Engelbert Beyer of the Federal Ministry of Education and Research (BMBF)
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, has a broad portfolio that includes most federal R&D activities that promote commercialization, while the Federal Ministry of Economics and Technology (BMWi) , also has a range of technology and innovation programs.
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Zimmerman, an emphasis on manufacturing and exports has served Germany well over the past few years of global turbulence. The government's response to the 2008-2009 global financial crisis and recession highlights the importance that Germany places on preserving its manufacturing sector.
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In the words of Engelbert Beyer, "It is not selfevident that you can continue the huge increases in financing research and education in the public sector." Some speakers also pointed out that Germany ranks below most other industrialized nations in researchers as a percentage of total employment, measures of international collaboration in research, and venture capital as a percentage of GDP. There are fears of a looming skills shortage due to declining university enrollment as the population ages and German youth show less interest in science and technology.
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The program is designed to prepare for future challenges, beginning with patterns of living, especially in the cities. While urban areas cover only about 1 percent of the earth's surface, they generate 75 percent of global energy demand and about 80 percent of greenhouse gas emissions, primarily carbon dioxide.
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"The mix of 20 Comments by Engelbert Beyer at the National Academies conference, "Meeting Global Challenges," held on November 1, 2010, in Washington, DC.
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"Education," he said, "is innovation policy." The commission encourages better education mainly through incentives, which range from support for entrepreneurship to total funding of research and development projects. A complementary program is the Excellence Initiative, which emerged in 2005 when the federal and state governments decided to use extra resources to give a few German universities a chance to close the gap with the best research universities worldwide.
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Eran Davidson, a venture capitalist in Germany, said that "our biggest constraint is the lack of entrepreneurs to start companies." This comment was amplified by several speakers who described Germans' "aversion to risk." As Peter Terhart of the German Private Equity and Venture Capital Association (BVK) put it, "Should I take the risk of establishing myself independently with my own firm, or should I go to Siemens or a successful ‘hidden champion' where the salary and employment are secure?
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They don't dream as big." Alexander Kritikos, DIW's Director for Entrepreneurship Research, expanded on the topic of risk, saying that the most successful entrepreneurs are those with a "moderate level of risk aversion." Entrepreneurs who are too riskaverse, he has found, have a higher likelihood of failure; those who are "too risk-loving" likewise show a high incidence of failure. Achieving a "moderate level" of risk, he said, should be a key goal of policy makers as they shape innovation policy and subsidies.21 Dr.
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In 2008, several SME-related activities within the BMWi were consolidated into the Central Innovation Programme SME, known by its German acronym ZIM.22 Normally, ZIM has an annual budget of around €300 million, but it received a major additional increase of €900 million through Germany's economic stimulus program in 2009 and 2010. ZIM's stated goals are to encourage SMEs to dedicate more efforts to innovation, reduce the risks of technology-based projects, and rapidly commercialize research.
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A culture of thinking dominates Germany, while Silicon Valley has a culture of just doing." Finally, he said, in Germany the managers tend to be engineers, while in the United States, managers are business-oriented people. "Marketing is the dominant theme of every company: marketing, marketing, marketing." ENERGY Symposium participants held extensive discussions on energy, especially on the goals of energy security and the development of a low-carbon economy.
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, questioned whether it is sensible to "completely step away" from fundamental research, including nuclear energy research, saying that his party favored a broad portfolio of fundamental work. "We believe we should not exclude insights that can become important in a more distant future." He did agree that the best way to build energy security and reduce foreign dependencies was "to steer Germany toward renewable, decentralized energies by 2050 in the most economical and efficient way."26 In her comments, Dr.
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It's really about gradually evolving the system, and I think we are in a world where we can learn from each other in this process." Dr. Ebinger noted that the International Energy Agency projects that the world is still going to derive about 85 percent of its energy from fossil fuels in 2050, even if Germany meets its targets for renewables.
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They call for an 80 percent reduction in greenhouse gas emissions, hastened by CO2 restrictions, improved energy efficiency, intelligent city planning, and hybrid engine technologies. Germany's Roadmap 2050 calls for expenditures by 2020 of €100 billion for smart grids, €25 billion for insulation, and €50 billion for sustainable mobility.
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About three-quarters of those deals were done in the United States, whose very strong venture capital community has been an engine for innovation. This is an important first link of the value chain, he said, but it is not sufficient.
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In particular, Minister of State Hoyer noted the need to develop renewable energy, improve energy efficiency, and safeguard their nations from terrorism and other asymmetrical threats. "We are more likely to succeed if we combine our resources and technology." He also noted the complexity of those challenges.
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OVERVIEW 29 In his remarks, Ambassador Murphy noted that the two nations have long recognized the value of collaboration, and the desirability of sharing their abundant resources. He recalled that then candidate Barack Obama noted in his Berlin address of July 2008, "While the 20th century taught us that we share a common destiny, the 21st has revealed a world more intertwined than any time in human history." Echoing this sentiment, Ambassador Murphy noted: "As the world's pre-eminent manufacturing and innovation centers, Germany and the United States can not only set an example by growing their own economies; they can also advance technological know-how and innovative developments that grow the global economy and serve the greater international community." Indeed, as Jens Schmidt-Ehmcke of the DIW Berlin observed of the symposium: "We learned from each other's programs, compared tools, and discussed best practices.
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