Since Solow’s ground-breaking work on the importance of technological progress for economic growth, over the past 50 years a flood of theoretical and empirical studies have appeared on this topic. The main result of these studies is that the economic growth of a country does not only depend on the development of the classical agents of production, but also to a great extent on the utilisation of technological progress, i.e. the innovative strength of the economy. In addition, also the society of a country plays an important role: by its investment in education it creates the main preconditions for innovation potential and, by contributing to their acceptance, also helps to determine the success of innovations.
Favoured by a dynamic economic environment, innovation activity increased continuously in German industry from 2005 to 2007 and innovation budgets also increased. The global economic downturn caused by the financial crisis in autumn 2008 also had a negative impact on innovation activity in Germany. Innovation activity has remained at about the level of 2007 – an encouraging sign nevertheless, under these circumstances, i.e. with a decline in economic activity in 2009 of 5 percent and a fall in industrial output of ca. 17 percent.
Ifo Project: Ifo Innovation Survey (ifo Innovationstest)
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