Germany has considerably increased its investments in Research and Investment (R&D). In 2015, the country invested 9.5% more than in 2014 – a laudable increase.

German National Library of Science and Technology in Hannover. Image credits: Christian A. Schröder.

Germany is overall the world’s 4th biggest investor in R&D, after the US, China, and Japan, but in a per capita list, it would surpass the former two. According to Stifterverband (a nationwide business initiative of companies and foundations), Germany’s R&D investments have been growing year after year, reaching record levels – $66.2 billion in 2015. According to them, the car industry was the main driver of this spike, with self-driving cars playing a big role.

“You have to bear in mind the huge challenges the automotive sector is confronted with,” said Stiftungsverband’s Gero Stenke. “E-mobility and autonomous driving are not completely new …, but the auto industry is under increasing pressure and is trying to keep international competitors in check.”

Notably, despite its emissions-cheating scandal, car manufacturer Volkswagen invested more in R&D than any other company in the world – a whopping $13.2 billion. Chemical companies also increased their spending by 6%, and small and medium enterprises (SME) have risen their investments by 16% compared to the previous year.

“We’ve been witnessing considerable changes in the sector of late,” said Stenke. “There’s a tendency of fewer and fewer SMEs focusing on innovation, but those which do seem to be doing it full-on.”

This also marks another landmark for Germany as the country reached its long declared goal of spending 3% of its national GDP for research and with Brexit happening, Germany consolidates its status as Europe’s science powerhouse (the UK just invests 1.7% of its GDP, and France only 2.2%).

Germany’s approach to higher education is also in direct opposition to that of the US. While university costs in the US are absurdly high and most students have to take out loans, higher education in Germany is absolutely free. This not only encourages German children to pursue a higher education but also attracts some of the brightest minds who otherwise wouldn’t be able to afford it. It’s a healthy attitude which is starting to pay dividends.