Holger Hanselka, President of the Fraunhofer-Gesellschaft

Holger Hanselka, President of the Fraunhofer-Gesellschaft, explains: “Amid intense global competition, Germany’s capacity for innovation is at stake. To safeguard our prosperity, excellent research alone is not enough—we must turn research findings into value for industry much faster. That is precisely the goal of the Freedom to Innovate initiative, which we see as a key industrial policy tool for strengthening competitiveness. Our joint position paper with the BDI makes one thing clear: Rather than passing one new law after another, we should use the options already available for targeted regulatory action—which would provide immediate relief.” Hanselka adds that bureaucratic barriers must be removed throughout the entire innovation process and that research and industry need more room to maneuver so that they can scale up new technologies in Germany. “Achieving technological sovereignty requires research, industry and government to work together.”

In their joint position paper, the Fraunhofer-Gesellschaft and the BDI set out specific recommendations and regulatory measures that can be implemented quickly to strengthen Germany’s innovation ecosystem and safeguard its technological leadership.

Germany’s ability to scale up innovations and capture their economic benefits depends largely on the regulatory environment. The Freedom of Innovation Act will be critical to competitiveness, helping to accelerate the industrial application of research, create jobs and strengthen technological sovereignty. Excellent research alone is not enough—what counts is what we make of it. Many of the most effective policy changes do not require new or additional funding programs. Instead, they can be made without new legislation—by streamlining procedures, updating regulations, clarifying responsibilities and aligning funding conditions.

Innovation policy cannot be judged by publications or technological excellence alone. What matters is whether it creates value for industry, jobs and technological leadership in Germany. This requires the entire innovation pipeline to work—from research through demonstration and piloting to industrial scale-up.

Valuable time and innovation potential are currently being lost between research breakthroughs and industrial scale-up. To bridge this gap, research institutions need the latitude to build demonstrators and pilot plants and to produce limited pilot and small-batch runs until industry has ramped up enough production capacity. This will accelerate market validation, reduce companies’ development risks and facilitate the adoption of new technologies. These efforts should be supported by a national intellectual property (IP) strategy and nationwide technology monitoring to spot global developments early and make strategic decisions.

Lengthy funding procedures, inconsistent federal and state rules and fragmented processes that switch between digital and paper formats are slowing innovation. The time from application to funding decision must be systematically reduced, funding requirements standardized and processes digitized end to end. Researchers and companies should spend more time on innovation and less on administration. Within the existing European framework, it must also become much easier to use data for research and innovation. That calls for consistent interpretation of the rules, standardized procedures and test environments that provide legal certainty—including for AI applications and the use of health data.

Freedom to innovate requires collective action. Research develops new technologies, businesses bring them to market, and government provides a sound legal framework. Swiftly implementing the proposed regulatory measures could unleash significant economic momentum without requiring additional funding and strengthen Germany’s position as an innovation hub over the long term. Going forward, innovation policy will be judged above all by how quickly new technologies reach the market.