“Germany needs a 10 trillion euro state fund for start-ups”

Berlin The federal government’s “future fund” launched in 2021 to finance start-ups must grow from ten billion to ten trillion euros over the next 20 to 30 years. This is what the federal government’s chief innovator, Rafael Laguna, calls for in an interview with the Handelsblatt. This is the only way Germany can master the energy transition, absorb the consequences of war and prevent falling further behind in innovation.

For him, the sovereign wealth funds in Norway, Singapore and Saudi Arabia, which invest long-term in the private sector, are examples. A German sovereign wealth fund “could initiate big things in Europe and invest in wind power, hydrogen, laser fusion, for example – several hundred million per project,” says Laguna. Experience shows that these sovereign wealth funds are always profitable “because they have the staying power that is rarely found in the private capital market”.

In general, various other countries have better innovation policies than Germany, says the head of the agency for disruptive innovations, Sprind. The Federal Republic could learn from France, China, Scandinavia and the Saudis, for example.

He was particularly impressed by France: “They just do it and pull the economy along with them. Whether energy transition or supply chain problems: The Ministry of Economics itself acts as a dealmaker – unthinkable for us. We are very cautious and are rather slow in making industrial policy.”

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State funds are also less reliable in Germany. Laguna cited the Gaia-X economic data platform as an example: “The new government has now stopped the second round of funding.”

Read the full interview here:

Mr. Laguna, how is your search for mega-innovations going for Germany?
The Sprind machine is running. Outstanding examples are major projects such as the Alzheimer’s drug or the mega wind turbines, which are already being implemented. In the challenges, five selected teams are looking for scalable ways to remove CO2 from the atmosphere and make long-term valuable products out of it, and another nine are looking for the antibiotic against viruses. The rest of the pipeline is also well filled: so far we have received almost 1000 submissions from female innovators, which we have all looked at. Of these, we selected 50 projects that received money: We give submitters up to 215,000 euros each so that they can further develop their invention. In addition, we are currently financing six major projects, each with up to 50 million euros over the next few years, as well as the 14 winning teams of the challenges with 600,000 to 700,000 per team and year.

Unlike you, the German economy is on the brakes when it comes to innovations. Since Corona, spending has plummeted – unlike in most industrialized countries…
In crises you can either act defensively or try to innovate out of the trough, that’s a question of mentality – but also of politics. I was recently in close contact with France because of a 5G project and am impressed by how pragmatic the politicians are there. They just do it and take the economy with them. Whether it’s the energy transition or supply chain problems: the Ministry of Economic Affairs in Paris acts as a dealmaker itself – unthinkable for us. We are very cautious here and tend to be slow in making industrial policy, and the flow of state funds is less reliable. like e.g. B. at the economic data platform Gaia-X, where the new government has now stopped the second round of funding.

In your opinion, which countries have the best innovation policies?
Well, the Chinese, and that has nothing to do with the system. Beijing develops a strategy and specifies what they want to achieve in five or ten years. I miss that a lot with us. I used to think there was a control room in the basement of the Chancellery like James Bond’s, where such strategies are hatched – but there are only bubble boxes there, joked one employee. But South Korea, Taiwan and Singapore are also much better thought out than we are.

And the US?
They were very good, built up Nasa and Darpa in the early 1960s and created Silicon Valley, among other things. But even Darpa, which pumps almost four billion dollars a year into innovations, has now become somewhat frozen. There were fewer truly groundbreaking things there. By the way: Even in Germany’s heyday 120 years ago, when the big breakthroughs in chemistry, pharmaceuticals and automobiles were made, there was a lot more government money than is thought today. Leap innovations rarely work without them.

>> Also read here: In an interview with the Handelsblatt, Federal Research Minister Stark-Watzinger calls for more distance from China, including in research: “One must not be naive”

With regard to China, the Stifterverband warns that we have to be much more careful in research cooperation that no crucial knowledge is lost …
I find the recent debate about cooperation between universities, which also benefit the Chinese military, somewhat constructed. We have an open science system, so you can’t control who ultimately does what with the knowledge. Knowledge can only be imprisoned for a very short time. The Americans were very far ahead in developing the atomic bomb with the Manhattan Project – but after just a few years the Soviet Union had them too.

It is difficult to regulate, one should appeal for more caution – also with Russia, by the way. However, the economics and research ministries would have to develop specific criteria for this.
What do you think of the traffic light’s innovation policy so far?
(smiles): Very good for Sprind. I hope that the promised Sprind freedom bill, which will give us more leeway and money, might get into parliament before the summer. Then we could really get going in 2023. And I’m also satisfied with the current budget of almost 100 million for 2022.

What do you think of the new transfer agency Dati, which is supposed to transfer knowledge from universities to companies more quickly?
Good concept – but maybe too timid. For example, I don’t think the restriction to small and medium-sized universities is a good thing, because many of our large universities aren’t that good at transfer either. And why shouldn’t someone who isn’t at a university or technical college but who has a great idea also be able to contact Dati? The planned Dati service is also designed too narrowly. We have developed a concept for a ‘D Combinator’ to facilitate experimentation with entrepreneurship, which could be described as a kind of Super-Dati. Part of it: We give people with good ideas money for six months so that they can take a break from university or work and formulate the concept, supervised by experienced coaches. This could be rolled out throughout Germany, in cooperation with local initiatives, where some of these already exist.

>> Also read here: The three top organizations for science, Stifterverband, Leopoldina and EFI, have had enough of petty bickering in the cabinet. They call for an innovation policy from a single source

Then why do we need two agencies, Sprind and Dati?
Sprind is looking for the 0.1 percent that makes the big invention. Data is widespread and should be anchored regionally in order to improve spin-offs and transfer from applied sciences. Of course, Sürind will benefit if Dati would raise it big and we can take over the super potentials.

The data got off to a bad start: finance ministers and the budget committee blocked most of the funds for the time being…
The substantive criticism in advance, for example from the Expert Commission for Research and Innovation, certainly played a role.

Shortly thereafter, the parliamentary research state secretary Thomas Sattelberger, who designed the data, resigned …
Private reasons were decisive for the resignation of Thomas Sattelberger, who is also giving up his Bundestag mandate. But I can imagine that the last meeting of the Budget Committee also had an effect.

The new start-up strategy of the Federal Minister of Economics has elicited a “Wow” from you – is there nothing to complain about?
Ultimately, we need to close all the funding gaps at the different stages of implementing innovation. Once that’s done, the state can withdraw again. As with a chain, no link may be missing. The dream of a European high-tech stock exchange beckons on the horizon. But it is now important that all parts of the very complex start-up strategy are implemented in the right order and properly financed. You need a good plan so you don’t get bogged down.

>> Also read here: The first European supercomputer comes to Jülich

What is missing from Economics Minister Habeck’s strategy?
The really big hit would be a German sovereign wealth fund – like in Norway, Singapore and Saudi Arabia – that invests in the private sector for the long term and also attracts private money. He could initiate big things in Europe and invest, for example, in wind power, hydrogen, laser fusion and whatever with a horizon of 20 to 30 years per investment, sometimes several hundred million per project. Some householders may fall off their feet, but experience shows that these sovereign wealth funds are always profitable. Precisely because they have the staying power that is rare in the private capital market.

The German future fund is endowed with ten billion euros …
That is a beginning. In an international comparison, a ten trillion fund would be appropriate within 20 or 30 years. In Norway and Singapore it is already one trillion. In this way, one can also react to challenges such as the energy transition and the consequences of war.

Habeck also wants to facilitate spin-offs from universities …
Yes, our transfer proposal is included in the start-up strategy, albeit a little hesitantly. We propose a standardized, fast procedure for the transfer of IP to spin-offs, which the TU Darmstadt is already practicing. You should try it out at 15 to 20 universities for three years – and standardize it nationwide if the results are good. Hopefully we can do that soon and measure how it works.

Does the traffic light itself work more innovatively than the GroKo?
Innovative is a big word. But you can feel that new brooms are sweeping at the top, we see that first-hand in the economics and research ministries. And that motivates the established apparatus enormously when they notice that the management works more agile and also listens.

More: Germany lags behind when it comes to innovations. But there is a remedy: ten strategies on how we can make it back to the top of the world

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