Innovation is more than a buzzword. It is a process that leads to new technologies and ways of doing business. Innovative companies can find ways to do business more efficiently or develop new products to get an edge over the competition. That makes it one of the driving forces behind modern economies. Innovation is often a function of cultural and economic factors, which means that some regions are more innovative than others. Germany is a prime example.
Germany Excels at Innovation
The World Economic Forum issues the Global Competitiveness Report, which rates countries based on several metrics. Innovation is one of those metrics. Nations that excel at developing, embracing, and applying new advances received higher scores. The 2018 report gave Germany a rating of 87.5% in innovation, which was the highest score in that area. A few nations, such as the United States, scored almost as well, but none of them managed to surpass Germany.
Why Does it Matter?
Innovation is the key to success in the modern economy. Technological innovation is vital because so many consumers focus on getting the latest gadgets. Automation can also save a great deal of labor, which cuts costs for companies that can make use of it.
Truly innovative companies also experiment with their management structures. Many of them have found ways to boost productivity, cut costs, and improve morale by changing the way that they do business. Those benefits can make all the difference in a competitive market.
Why is Germany Different?
Germany combines several factors that encourage innovation. Consumers in Germany tend to understand and appreciate technology. They also value quality products. Those preferences put plenty of pressure on companies to meet the demand for better products, which naturally leads to innovation. Companies are also unusually willing to market new products because they know that the German people are open to trying new things.
German companies also tend to focus on research and development. The automotive industry is famous for it, but many other sectors also invest in research. The German government also contributes to research and development. It funds a massive number of research institutes, which provide the fundamental analysis that private businesses can use as a foundation for their own work. That union of public interest, government support, and private enterprise excels at creating new ideas.