German innovative strength has significantly weakened due to insufficient investment in R&D, report reveals

Context:

• China’s share of global patent filings has undergone exponential growth in recent years, including at the European Patent Office (EPO), which saw applications jump by 9.7% in 2025 (April 2026 ip fray LinkedIn post). This is, by no coincidence, strengthened by its increase in R&D spending, which grew by twentyfold over the past 22 years.
• Meanwhile, German companies have started to lose ground internationally, both in terms of investment in R&D and in terms of patent filings. Germany’s share of global R&D spending fell by 3% between 2008 (when it ranked fourth worldwide and had an 8.5% share) and 2021, sinking to sixth place. Meanwhile, the German share of patents fell by nearly 7% (from 21.9% to 15%) between 2000 and 2022. This is primarily attributed to a slowdown in the automotive, electrical, and chemical industries. While the German share of EPO patent filings remains quite high, it notably files very few in industries such as AI, like many of its other European counterparts (January 1, 2026 ip fray article).

What’s new: China has taken ownership of more than 11,300 patents developed in Germany over the past ​two decades, a report by the German Economic Institute (IW) has revealed (full report below box). The report, commissioned by the Bertelsmann Foundation, has found that nearly one in three inventions developed in Germany is owned by a ​foreign entity – and while a third are ​held by U.S. owners, about 11% are by ⁠those based in Switzerland. The shift of Chinese-owned German patents is quite prominent in the mechanical engineering industry, where applications ​rose to 4,300 in 2022 from 3,300 in 2000.

Direct impact: As noted by IW expert Oliver Koppel in an interview yesterday, German companies also hold patents abroad – and that is part of “normal competition”. However, China directed Western acquisitions strategically while keeping its own market relatively closed to foreign investors, he stated, adding that there is now “an imbalance”. This underlines a weakening German innovative strength due to insufficient investment in R&D, the expert believes. The already considerable level of “German” patents controlled by China is likely to increase significantly in the future, given the numerous acquisitions of German companies by Chinese investors, the IW report adds.

Wider ramifications: Given that Germany is currently the biggest economy in Europe (and one of the biggest global patent filers), the report not only raises issues nationally, but on a Europe-wide basis, too. Dr. Koppel added yesterday that Europe needs to start tracking where strategically relevant ​technologies are ⁠migrating. The transition of ownership of inventions is being seen on a continental level and threatens to undermine Europe’s position in the digital and biotech economies, the report warns.