The Drivers of Company Innovation Activities in German Industries

Abstract

Consequently, innovation allows companies to generate added value and get ahead of their competitors. However, a number of recent studies have shown that innovation does not occur in isolation and innovation factors affect each industry differently. This is why economic entities fail – because they are unable to exploit the potential of cooperation (for example, using the Triple Helix principle in networks) and by ineffectively spending public funds to support innovative activities. On the other hand, Germany has the largest economy in the European Union and one of the strongest and most competitive economies in the world (Germany was ranked fourth in the 2015–2016 rankings of the Global Competitiveness Index carried out by the World Economic Forum). This is due to the fact that stimulus for investment, a good climate for innovation, and private-sector investment has crucial importance for the German government. Therefore, the goal of this article is to analyze the drivers influencing businesses´ innovation activities in different industries in Germany. We show that different factors influence the innovation activities of different industries. Our results provide (1) practical implications for policy makers (not only in Germany) and (2) an initial analysis of German industries and a proposal for partners and factors that affect the innovative activities of different sectors. This proposal could help other economies support the creation of innovation (especially, countries from Central and Eastern Europe – the CEE Countries). For the analysis, we created original multiple linear regression models using data from the Community Innovation Survey conducted in Germany between the years 2010–2012.