Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232906 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14154
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In this paper, we describe the historical co-evolution of innovation and economic growth in Germany since 1871. The country's rise as an industrial power in the late 19th century, through its innovation and entrepreneurial performance, is contrasted with the post-World War II period. This latter period, although it contained the German economic miracle, was nevertheless a period during which innovation went into relative decline. We document this decline and offer four broad, interrelated explanations: (i) an innovation system locked into incremental innovation, (ii) a slowdown in the diffusion of technology, (iii) weaknesses in the education system, and (iv) entrepreneurial stagnation. Implications for policy are noted. Our paper contributes to the growing literature attempting to understand the decline in business dynamism that characterises many advanced economies.
Subjects: 
entrepreneurship
inequality
innovation
productivity
technology
JEL: 
D31
L26
O33
O38
O52
Document Type: 
Working Paper

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