Innovation, Digitization & Structural Change

While eight out of ten German manufacturing firms reported material shortages at the height of the pandemic in December 2021, this share had fallen to 18 percent in October 2023. Nonetheless, the recent attacks by the Yemeni Houthi rebels on container ships in the Red Sea highlight the fact that supply chain risks remain significant.

EU Cohesion Policy constitutes an important item in the EU budget. For the Multiannual Financial Framework 2021–2027, EUR 392 billion is reserved for the promotion of economic and social cohesion among the regions of the European Union. This article presents results from a pilot study that combines official data on projects co-funded by the ERDF and the CF in the programming period 2007–2013, with remote sensing data on night light emission and land cover to assess the effect of EU funding on economic growth at the municipal level, where regional GDP data are not available. Our approach can also be applied in other contexts, for example to study the impact of investment projects funded by Next Generation EU.

The devastating effects of climate change are becoming increasingly evident. It is difficult to accurately predict or even quantify the risks. Despite this threat, the pace of change is slow. Why is the world failing to tackle this problem collectively and effectively? What constraints are holding us back? How can we overcome them and contribute to the formulation of a credible and acceptable climate policy? What policy instruments can help pave the way to the green transition?

Germany is a strong industrial nation with manufacturing contributing significantly to its economy. The country faces challenges including decarbonization, digitalization, and increased competition, especially in the automotive sector. Germany's automotive industry is vital to its economy, contributing around 9% of GDP and employing over 2.5 million people. The industry must adapt to these changes, requiring a skilled workforce with a focus on green technologies. The country has done a remarkable job in greening its manufacturing and green skills are quickly gaining prominence. After all, Germany is still a hotbed of innovation, but cannot afford to become complacent.

Innovations form the backbone of sustained economic growth and, as such, they play a key role in safeguarding prosperity. Governments, aware of this, invest heavily in public research at universities and research institutes, and strive to create ideal conditions for private sector research and development (R&D), usually through specific R&D tax credit schemes or direct funding.