by CIO Staff

German Gov’t OKs $1.6B in Grants to Spur IT Innovation

Dec 19, 20062 mins

German Chancellor Angela Merkel has called on politicians, business leaders and researchers to cooperate more closely in helping the country secure a leading position in the global IT sector and pledged money to support collaborative efforts.

Speaking at Germany’s first-ever IT summit on Monday, Merkel said communications and telecommunications companies need to hook up with the country’s traditional heavyweights such as the automotive and chemical sectors and collaborate more intensively in the area of software engineering. Already today, more than half of the innovations in the automobile industry are based on software.

The chancellor pledged 1.2 billion euros (US$1.6 billion) in grants over the next three years to support innovation in Germany’s IT sector. The funds will come from the federal government’s 15 billion-euro high-tech investment program approved earlier this year.

But Merkel was quick to add that in the future, industry grants should be carefully targeted and not simply “poured out of a watering can.”

Germany has seen its strong tradition of technological innovation steadily wane over the years, due in part to high labor costs that have deterred investment and declining university standards that have caused a brain drain. The country claims a number of IT achievements, including the Zuse, seen by some as the first freely programmable computer, and the MP3 audio compression algorithm.

SAP Chief Executive Officer Henning Kagermann was blunt in his assessment of Germany’s IT standing. Although the communications and telecommunications sectors combined employ approximately 800,000 people and generate annual revenue of about 150 billion euros, making it the country’s largest industrial sector, “in a global comparison, we are not a leader and, even worse, we are falling behind,” he said.

In addition to funds, the government initiative calls for immigration policies designed to attract talented researchers from around the world, and grants to keep gifted students in the country.

-John Blau, IDG News Service (Dusseldorf Bureau)

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