Coalition agreement 2025: new framework conditions for promoting innovation

Several studies show: Companies that focus on innovation in times of crisis are more successful in the long term than those that do without it (‘Innovation in a crisis: Why it is more critical than ever, June 2020, McKinsey & Company; Roaring Out of Recession.’ Harvard Business Review 88, no. 3, March 2010, 62-69). New needs, markets and business models emerge precisely in phases of economic uncertainty. Those who act promptly can actively shape structural change and secure sustainable competitive advantages. An economic downturn can therefore open up significant new growth opportunities for Germany as a business location – provided that companies respond with strategically orientated investments in innovation and transformation in order to adapt to changing market conditions and a possible continuation of the crisis at an early stage. However, the political framework conditions for such innovation dynamics are also important.

1. Economic Culture: Promoting entrepreneurship and start-ups in line with social responsibility
2. Innovation Strategy: Supporting key technologies and industries to generate future added value
3. Innovation Leadership: Strengthening technology transfer through creative framework conditions and a willingness to take risks

These pillars can be addressed individually, but are only effective together in the long term. Interfaces must be sensibly interlinked.

Economic Culture

A clearly formulated goal of the coalition agreement is to develop Germany into a ‘start-up nation’. According to the KfW Start-up Monitor 2024, the number of start-ups has been declining since 2003 (approx. 1.5 million start-ups) and has recently stagnated at around 570,000. The study cited bureaucracy, access to customers, the economic situation and opportunity costs as key hurdles. The education system also received poor ratings with regard to entrepreneurial skills. There is therefore a need for action.

• Reduction in bureaucracy, fewer documentation requirements and simplification of norms and standards for SMEs, tradespeople and the self-employed.
• The simplification of notarial procedures and the facilitation of digital notarisation processes as well as the automatic exchange of data between the notary's office, tax office and trade office are to be achieved in the next legislative period.
• Examination of a ‘start-up protection zone’ to reduce bureaucracy and the introduction of a digital one-stop shop for start-ups within 24 hours. Employee share ownership is to be further strengthened through the practical organisation of tax and social security law.
• With a German fund totalling at least 10 billion euros of the federal government's own funds, at least 100 billion euros of private capital is to be activated for SMEs and scale-ups.
• The Future Fund from the last legislative period is to be doubled to 25 billion euros by 2030. The start-up financing architecture will undergo an ‘efficiency check’. A Future Fund II focussing on spin-offs and growth in the deep tech and biotech sectors is to be established.
• Entrepreneurship education is to be included as a further goal in the future agreement on studying and teaching and a new start-up culture is to be established at research institutions.
• Easier access to innovation programmes and competitive energy costs for companies with permanent relief of at least five cents per kWh are intended to promote entrepreneurship.

Innovation Strategy

The coalition plans to increase the share of spending on research and development to at least 3.5% of GDP by 2030 – with the aim of catching up with highly innovative countries such as Israel, South Korea and Sweden (source: OECD Indicators, Gross domestic spending on R&D in 2023). The key technologies and industries mentioned in the coalition paper are broadly diversified:

• Establishment of AI centres of excellence (‘AI Gigafactory’)
• Development of quantum computers
• Competence centre for chip design
• National biobank
• Construction of a fusion reactor in Germany

Innovation Leadership

• Existing R&D programmes will be continued: Continuation and strengthening of the programmes ZIM (Central Innovation Programme for SMEs), IGF (Industrial Collective Research), KMU-innovativ and INNO-KOM (Innovation Competence Funding Programme)
• Continuation of Federal Ministry of Research, Technology and Space transfer programmes including ‘DATIpilot’ (pilot project of the German Agency for Transfer and Innovation) and DAFG (German Applied Research Association) programmes such as ‘Research at UAS’ and ‘UAS Personnel’
• Appropriate participation of universities of applied sciences in DFG funding (German Research Foundation)
• Expansion of regional funding programmes such as ‘WIR – Wandel durch Innovation in der Region’, ‘RUBIN – Regionale unternehmerische Bündnisse für Innovation’ and ‘T!Raum – TransferRäume für die Zukunft von Regionen’
• Targeted offers such as AI real-world labs for SMEs
• Continuation of regional transformation networks and hubs in the automotive industry beyond 2025
• Existing technology centres and innovation clusters in the federal states serve as a basis for the expansion of further activities

Coalition agreement 2025: established players in demand

In conclusion, it can be said that the new coalition has recognised the key challenges facing entrepreneurship and has identified measures to address them. A strategic prioritisation of key technologies and industrial fields has taken place and makes sense overall, without any major surprises. Both deep tech topics (as defined by the Deep Tech Talent Initiative of the European Institute of Technology) and technologies and industries with greater potential for spill-over effects or cross-innovation are addressed.

The continuation of proven measures in the area of innovation leadership is positive. However, there is a lack of concrete new impetus, for example to strengthen technology transfer, bring deep-tech innovations to the market more quickly and further develop the innovation ecosystem in Germany. This is precisely where established players need to actively fulfil their role: Network management institutions and innovation consultancies are called upon to use their expertise, intensify their efforts and exploit all the opportunities on offer for their clients. From the point of view of innovation consulting, politicians are called upon to create reliable financial framework conditions when implementing the coalition paper, such as planning security for funding programmes, so that companies can take advantage of growth opportunities and be successful in the long term.

EurA has been a reliable partner to industry for technology transfer and open innovation for over 25 years. In our ZIM-funded innovation networks, we accompany the technology leaders of tomorrow and provide support with funding.

Text: Dr Viktor Schneider