Research and development (R&D) and thus innovation promote growth and therefore the competitiveness of a country. With this in mind, the EU's Lisbon Strategy has already set the target of increasing R&D expenditure to 3% of gross domestic product (GDP) by 2010. However, this was only achieved by Sweden and Finland, while Germany achieved 2.7%. The target was thus transferred unchanged to the Europe 2020 strategy. It has now been achieved by more countries, including Germany, but not by the average European country. At the end of 2022, the German Federal Chancellor and the heads of government of the federal states announced that a new target of 3.5% of GDP spent on R&D is to be achieved by 2025 together with industry. [1] [2] This was most recently repeated as a target for 2030 in the coalition agreement between the CDU and SPD for the 21st legislative period. [3]

Expenditure on internal research and development (i.e. in a company or institution's internal department and not contracted out) has increased by around EUR 12.3 billion since 1995, reaching EUR 129.7 billion. At the same time, the share of GDP accounted for by this expenditure has increased, reaching 3.1% in 2023. By far the largest contribution to internal R&D expenditure is made by industry, predominantly the manufacturing sector, followed by universities.

Among the federal states, Baden-Württemberg spent the most on internal R&D in 2022 with €32.5 billion, followed by Bavaria (€24.4 billion) and North Rhine-Westphalia (€17.6 billion).

The federal government spent €24.1 billion on R&D in 2023. The Federal Ministry of Education and Research had the largest expenditure among the individual ministries (€13.6 billion), followed by the Federal Ministry of Economics and Climate Protection (€5 billion) and the Federal Ministry of Defense (€1.9 billion). In terms of content, the funding areas of health research and the health economy, aerospace, energy research, information and communication technology and defense research have recently been in the foreground. According to the target figures for 2024, the latter in particular has increased significantly and is now in first place. [4]

Data from the World Bank shows that, in an international comparison of R&D expenditure as a proportion of GDP, Germany spent 3.1% more than the average of the European Union (2.2%), China (2.6%) and also than the average of the OECD countries (3.0%) in 2022. However, some countries invested significantly more in R&D, including Israel (6.0%), South Korea (5.2%) and the United States (3.6%). Within Europe, Sweden (3.4%), Belgium (3.41%) and Austria (3.20%) spent more on R&D as a proportion of GDP.

In addition to expenditure on R&D, other measures in the area of securing skilled workers and promoting innovation should also be taken into account. This includes the transfer of knowledge and technology into practical implementation and its use for well-founded decisions in politics and society.

[1] Gemeinsame Wissenschaftskonferenz (GWK) (2025): Das 3,5 %-Ziel für Forschung und Entwicklung. https://www.gwk-bonn.de/themen/weitere-arbeitsgebiete/das-35-ziel-fuer-forschung-und-entwicklung 

[2] World Bank Group (2025): Research and development expenditure (% of GDP). https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS 

[3] CDU, CSU & SPD (2025): Verantwortung für Deutschland – Koalitionsvertrag zwischen CDU, CSU und SPD. 21. Legislaturperiode. https://www.cdu.de/app/uploads/2025/04/Koalitionsvertrag-%E2%80%93-barrierefreie-Version.pdf 

[4] Bundesministerium für Bildung und Forschung (BMBF) (2025): Ausgaben des Bundes für Forschung und Entwicklung nach Ressorts. Interaktive Grafik. https://www.datenportal.bmbf.de/portal/de/K1/grafik-1.1.4.html 

Other figures can be found here.