The Midtech Trap

In April 2024 economists writing for the ifo Institute, among them its president Clemens Fuest, wrote that Europe and Germany are caught in a Midtech-Falle, a mid-tech trap. Much of the money for research goes into existing industries. Innovationen in Europa und Deutschland sind durch die Ingenieurskunst auf etablierten Feldern getrieben, they wrote, innovations in Europe and Germany are driven by engineering in established fields, such as the car industry. The authors called the concentration of German companies’ research spending on the car industry a great risk for the German economy. In September 2025 Germany fell from ninth to eleventh place in the Global Innovation Index. The president of the German Patent and Trade Mark Office called it Anlass zur Sorge, a cause for concern.

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