Sectoral Innovation Systems, Corporate Strategies, and Competitiveness of the German Economy in a Globalised World

The EU Barcelona target assumes a close causal relationship between corporate R&D, the competitiveness of business firms and the economic performance of industrial countries. Testing this hypothesis, this paper contrasts innovation and production activities in four research intensive manufacturing sectors (chemicals and pharmaceuticals, motor vehicles, machinery, and electrical engineering). Starting point are observed long-term changes in worldwide value added of the manufacturing sector. The empirical analysis is based on a unique survey of R&D-intensive business firms in Germany and 50 personal interviews in large industrial companies. The results show that there is no simple connection between R&D and competitiveness. Moreover, the likely consequences of promoting R&D differ substantially between industries. COMMENT: Dirk Fornahl