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The number of patent applications has been falling for years. Companies complain that this is mainly due to poorer general conditions. Is Germany still competitive as a location for innovation?
It looks like a normal brake disc for a car, and yet it is more than that. If you look closer, you will see that the surface of the brake disc is different – covered by a thin, darker layer. This layer should change the future of the automotive industry, at least according to the developers at Trumpf in Ditzingen near Stuttgart.
Using a new laser process, they change the surface of the disc so that less abrasion and therefore less fine dust is produced during the braking process. In times of too much fine dust in the cities, the developers hope that their new invention will generate great demand from automobile companies.
“We should clear out the administration”
“However, we can only succeed in such inventions by attracting the best minds,” says Berthold Schmidt, the technical director at Trumpf. Every year his company invests almost one in ten of its annual sales in research and development. This innovation budget of around half a billion euros adds 300 new inventions to the company’s patent portfolio every year.
“Germany as an innovation location, however, no longer offers the best conditions for innovative companies,” criticizes Schmidt and illustrates this with an example: “In Germany it usually takes several weeks until all approvals to set up a company are received – in other countries this sometimes takes time just a day.” Above all, Schmidt sees excessive laws and bureaucracy as paralyzing factors for young companies, start-ups and thus also for innovations. “We should declutter the administration of specifications and speed it up through digitalization.”
Germany is only in fifth place worldwide
Many patent applications in Germany are filed by medium-sized companies such as Trumpf. Companies have most of them protected by patents so that they cannot be copied by other companies. In Germany, a total of 57,214 such patents were registered with the German Patent and Trademark Office (DPMA) in 2022. That was 16 percent less than in 2018.
In the international patent system (PCT), around twelve percent fewer patents were registered over the same period. Here, Germany was overtaken by Korea and is now only in fifth place behind China, the USA, Japan and Korea. So how do you interpret these numbers? Is Germany as a location for innovation losing weight in international comparison? Is research and development becoming less and less in Germany?
Above all, fewer car patents
“This conclusion certainly goes too far,” says the DPMA. Other parameters are also important for such a judgment. Spending on research and development in Germany, for example, has increased significantly over the years. According to the patent office, there is not much awareness in Germany and Europe about patenting research. “In other parts of the world – particularly in Asia – awareness of this is very strong.”
The DPMA is also observing a structural change in current patent applications. In the area of electrical engineering they then increased sharply, but in the traditionally strong automotive industry the number of registrations fell. Eva Schewior, President of the DPMA, sees areas such as digitalization, automation, artificial intelligence and battery technology on the rise, but “in terms of the number of patent applications, this development does not exactly work in Germany’s favor.”
The ministry also sees a need to catch up
“The number of patents is just one of many indicators for recording the innovative activity of companies,” says the Federal Ministry for Economic Affairs and Climate Protection (BMWK). These numbers are therefore not useful as a location indicator. In principle, Germany is on the right track and is an “excellent location” for innovative companies.
Nevertheless, the Ministry of Economic Affairs also sees a need to catch up when it comes to location factors. Measures to reduce bureaucracy and attract skilled workers are just as important as various funding programs for innovations. “Fundamentally, inventions require openness to technology – and a state that creates a framework that encourages innovation.”
For important ones Key technologies suspended?
“When it comes to digital technologies and applications, Germany is not doing well in an international comparison,” says Matthias Bianchi from the German SME Association. By far the most patent applications worldwide were made in this area. According to Bianchi, Germany’s innovative strength remains as high as ever, but other nations and regions have moved ahead in important growth sectors. One reason is that many large tech companies from the USA and Asia depend on European companies when it comes to innovation spending.
High energy costs and crippling regulatory burdens in Germany are particularly negative. In order to remain competitive in the future, Bianchi is calling for the state and administration to be digitized, bureaucracy reduced and processes accelerated. “We also have to rely on European cooperation,” he says. Only with sufficient networking and cooperation within Europe can we keep up internationally.