German technology policy, innovation, and national institutional frameworks

Abstract

The pattern of innovation in Germany is substantially different from that in the US and the UK. It is argued that German patterns of innovation -incremental innovation in high quality products especially in engineering and chemicalsrequire long-term capital, highly cooperative unions and powerful employer associations, effective vocational training systems and close long-term cooperation between companies and with research institutes and university departments. (The more radical high-technology innovation typical of the US and the UK benefits by contrast from less regulated market conditions.)