Studio Talk, Part 2: Thomas Straubhaar, Hamburg Institute of International Economics

Germany has handed out generous bail-out packages worth billions of euros to save companies like car maker Opel and other major employers. But how much has been earmarked for research and development? After all, Germany's export oriented economy depends to a large extent on its traditional ability to produce innovative new products. One of the state's most important funding programs in the R&D sector is the so-called "initiative for excellence", which supports exceptional projects and colleges. Like the one we found at Aachen University. DW-TV: Thomas Straubhaar from the Hamburg Institute of International Economics is joining us again - Now, the German government agreed to pump more money into the R&D sector. Some 18 Billion Euros in the next ten years. Do you think that's enough? Thomas Straubhaar: I think it's a good idea but I don't think it's enough. I think there is much more money needed but it does not have to come necessarily from the public sector. It could also come and it should come from the private sector as well. DW-TV: Is that something you advocate in your book. You've written a book which in German is called "Gefühlte Ungerechtigkeit" which translates roughly as "Relative Injustice". What's the premise there. Thomas Straubhaar: We have three steps of advice. The first step is let the market play and do whatever it can. The second step is that you should improve the ability to follow the structural changes by better eductaion. So pump in more money into this sector. Thirdly, if you fail to be successful, then and only then the third step is the state should support the people that have not supported themselves. DW-TV: Quickly, you say more private sponsorship would be better. How come there is so little in Germany. Thomas Straubhaar: There are tax incentives that are against it. There are also problems that you cannot find the money to start up new businesses. So there is much needed to be done in connection with this, in the combination between public and private funding. DW-TV: Thomas Straubhaar, thank you very much for joining us.

DW-World | July 14, 2009

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