Silicon Saxony as a Blueprint

Peter Bofinger (University of Würzburg) advocated for an active innovation policy: Major technological leaps do not occur on their own. He cited Dresden's Silicon Saxony as an example, stating, "This is a clear example that one of the lighthouses we have was made possible entirely through industrial policy. Without the political decision by Mr. Biedenkopf, this would not have happened." Simultaneously, he criticised the delayed response to the rise of China in electromobility: "Northvolt – 330 million euros gone. This should have been done in 2018, not 2024." Instead of subsidies, he called for state equity stakes modelled after China's Government Guided Funds: a ten per cent state stake as base financing for startups, without converting into a state economy.

His central plea: Germany needs a central AI strategy with a coordinating institution – cross-departmental and sufficiently funded. By comparison: "13 billion euros annually for agriculture, one billion for AI – whether this is a good strategy, probably not."

Regulation over Funding

Justus Haucap (DICE, Düsseldorf) agreed with the diagnosis but not the therapy. Smarter regulation and more innovative public procurement are more important than additional billions in subsidies. The example of Bosch illustrates failure: a global leader in patents for autonomous driving but hindered by a lack of testing opportunities in Germany. "We make a correct decision, then prevent companies from implementing it here." Procurement processes should include more innovation clauses and be open to smaller companies – following the Flemish Government model.

Depoliticised Governance as Key

Felix Bierbrauer (University of Cologne) emphasised the difficulty of empirically evaluating industrial policy: The counterfactual scenario is always missing. However, DARPA [Defense Advanced Research Projects Agency, United States Department of Defense's R&D agency] shows how successful innovation promotion works: small teams with high autonomy, a clear focus on transitioning from basic research to commercial applications. "This is an area where the state can make a meaningful impact – it is a depoliticised decision." He suggested a European DARPA equivalent as a concrete proposal. "The most important thing is that industrial policy has the right governance."

Video

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