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Innovation Dynamics in OECD Countries: Challenges for German Enterprises


  • Barbara Breitschopf


  • Hariolf Grupp



This paper considers the innovation dynamics in OECD countries since the beginning of the 1990s. Special attention is given to German firms that had the exceptional opportunity and burden to develop an innovative regime in the former GDR. The economic slump in the new decade had everywhere a negative impact on the propensity of companies to invest in new innovative products and processes. Among the OECD countries leading in innovation, Europe is loosing strength, although R&D has doubtlessly become more important in the innovation process of the manufacturing sector, but in particular in the service sector. The EU and some member countries have recognized this and formulated an ambitious objective: R&D expenditure is to be increased to 3% of GDP by 2010. Despite this joint target, countries differ in many respects. Export-oriented countries in high technology products suffer less from a weak economic momentum in their domestic markets. A further distinction needs to be made between the industry and the service sector. Industrial innovators focus more on the world market. After the “trade diversionâ€\x9D of West German high technology from international markets to the absorbing East German markets was over, in the second half of the 1990s, Germany has managed to get slightly ahead of Japan as an exporter of R&D-intensive goods and in international patent activities. However, the foreign trade success that the German technology sector enjoyed is mainly based on the automobile sector. Increasing problems in the long term are the decline in the number of qualified manpower entering the labour market. It will exacerbate the shortage of qualified staff in innovating companies. Copyright Springer-Verlag Berlin Heidelberg 2004

Suggested Citation

  • Barbara Breitschopf & Hariolf Grupp, 2004. "Innovation Dynamics in OECD Countries: Challenges for German Enterprises," International Economics and Economic Policy, Springer, vol. 1(2), pages 135-155, January.
  • Handle: RePEc:kap:iecepo:v:1:y:2004:i:2:p:135-155 DOI: 10.1007/s10368-004-0021-x

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    References listed on IDEAS

    1. Wiersema,Margarethe & Bowen, Harry P., 2005. "Corporate international diversification: the impact of foreign competition, industry globalization and product diversification," Vlerick Leuven Gent Management School Working Paper Series 2005-6, Vlerick Leuven Gent Management School.
    2. Lewis, William W., 2004. "The Power of Productivity," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226476766, February.
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    More about this item


    Competitiveness; OECD; Germany; innovation; technology; L16; L52; O33; P51;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems


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