Report on research, innovation and technological performance in Germany 2025

Foreword: This annual report goes public as it is presented to the outgoing Federal Government and is intended to provide impetus for the upcoming coalition negotiations. Much is at stake. A new government will have to be formed that succeeds in regaining trust in politics, reducing uncertainty for the economy and society and developing promising prospects. The way out of the economic recession must be found and pursued. To this end, research and innovation policy (R&I policy) urgently needs further development. In particular, measures should focus on transformative renewal in industry and services, reforms in education and higher education, the digitalization of public administration and the upgrading of key infrastructures. This will enable the German economy and society to be well positioned in the ongoing transformation processes and develop sufficient innovative strength to successfully meet the challenges of international innovation and technology competition. With its 2025 Annual Report, the Commission of Experts aims to contribute to solving the aforementioned challenges to solving the aforementioned challenges from an innovation economics and R&I policy perspective. The report begins with an assessment of the economic situation and the performance of the German R&I system. A new, bold and balanced R&I policy is needed to strengthen the R&I system. It should support German companies and research institutions in expanding their research and innovation power in order to regain international competitiveness. An assessment of R&I policy in the 20th legislative period shows that in recent years it has not met this requirement. Despite setting the right objectives, it has become bogged down in many respects and lacked the necessary consistency in implementing its goals. With this in mind, the Commission of Experts proposes measures with which the Federal Government of the 21st legislative period can overcome the issues mentioned. Particular attention is paid to industrial policy, the opportunities and limitations of which are outlined by the Commission of Experts. Following this overall view of the German R&I system, the Commission of Experts focuses on specific problems in its key chapters. The analysis of transformative structural change in the course of digitalization and of decarbonization shows how differently these two developments are progressing and what kind of R&I policy support is required in each case. Quantum technologies are presented as an area in which Germany currently holds a strong international position in research. This position must not be squandered; targeted R&I policy measures can help. As is already a tradition with the Commission of Experts, it also addresses topics in its report that are not the focus of current R&I policy. This year's topic is water. Innovation activities and skilfully defined framework conditions in the water industry can help to ensure a secure supply of clean water despite the high volatility in water supply caused by climate change.