Why Germany Dominates the U.S. in Innovation

Why does Germany dominate the U.S. in innovation?

  • Germany understands that innovation must result in productivity gains that are widespread, rather than concentrated in the high-tech sector of the moment.
  • Germany has a network of public institutions that help companies recombine and improve ideas. In other words, innovation doesn’t end with invention.
  • Germany’s workforce is constantly trained, enabling it to use the most radical innovations in the most diverse and creative ways to produce and improve products and services that customers want to buy for higher prices.

Germany actively coordinates these factors, creating a virtuous cycle among them. Germany innovates in order to empower workers and improve their productivity; the U.S. focuses on technologies that reduce or eliminate the need to hire those pesky wage-seeking human beings. Germany’s innovations create and sustain good jobs across the spectrum of workers’ educational attainment; American innovation, at best, creates jobs at Amazon’s fulfillment centers and in Apple stores.

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