VCI position in a nutshell

Innovation Incentives

17. January 2022 | Position


The German chemical-pharmaceutical industry is under double pressure to act: First, companies need to hold their own in ever fiercer global competition. Second, they have to use their know-how to find answers to the major societal and ecological challenges of our time.

The industry is facing up to this: by investing in 2020 some 12.5 billion euros in research and development. Also, companies are working to eliminate their internal obstacles to innovation. However, industry alone cannot keep Germany at the top worldwide. Under¬takings need political backing.

Provide incentives for innovation

Important key technologies – such as hydrogen generation and use, chemical recycling, biotechnology, energy storage and digitalisation – must be recognised and supported across value chains. National and European promotion programmes as well as growth funds should be set up for this purpose. The chemical-pharmaceutical industry gives special importance to research incentives for SMEs and start-ups, as they are major sources of innovation. Business and public administration should invest 3.5 percent of GDP in R&D.

Making innovation a priority

Those who want to be competitive must bring research results to market maturity as fast as possible. Therefore, obstacles to innovation in value networks should be avoided and elimi-nated. This presupposes framework conditions in innovation policy and research promotion that are stable, reliable in the long run and fit for the future. Furthermore, excellently qualified staff strengthen the innovation ability of companies.


  • Invest more in innovation and make available growth capital
    Venture capital and further financial instruments with a long-term funding horizon should be mobilised to support innovative companies up to market maturity. Useful additional points would be more fiscal research incentives, extra public investments, innovation-friendly fiscal framework conditions, and setting up and supporting real laboratories.
  • Create a suitable environment for innovation
    An open mind to a wide range of different technologies, fast planning and approval procedures that are legally sound and can be relied on today and tomorrow, effective patent protection, appropriate patent terms and uniform supplementary protection certificates in the EU – these are important components to strengthen Germany’s ability to innovate. Also necessary is an adaptation of state aid rules for R&D and regarding transformation projects. High agility of promotion programmes is needed too.
  • Promotion programmes for the future
    More money should go again into projects with industry. Sufficiently funded promotion programmes for different technologies and across all degrees of technology maturity are important, also under the EU’s Green Deal. These must allow flexibility and agile expansion. Research cooperations should be further driven forward through unbureaucratic tendering and improved effectivity and efficacy of promotion efforts, offering better access for SMEs and start-ups.
  • Improve the conditions for natural science teaching
    Science teaching (“Sachkundeunterricht”) should be introduced already in elementary schools. In secondary schooling, at least one third of lessons should be dedicated to STEM subjects. Universities need better funding.


For questions or suggestions, please feel free to contact us.

 Martin Reuter

Contact person

Dr. Martin Reuter

Forschungspolitik (national), Technologiepolitik