Germany's economics minister wants to make life easier for innovative companies across Europe's powerhouse. Greater financial aid, also in the form of tax breaks, are to support small and medium-sized enterprises.
German Economics Minister Brigitte Zypries is planning to boost innovation in the country by creating stronger incentives for companies, particularly small and medium-sized enterprises (SMEs), which are considered to be the backbone of Europe's largest economy.
Matthias Machnig, and under-secretary in the Economics Ministry in Berlin, told the Tuesday edition of the "Süddeutsche Zeitung" daily that a raft of financial aid and tax break measures were being considered to support a stronger research and development drive.
"We're planning to provide an additional 1 billion euros ($1.06 billion) annually for extra measures to boost innovation," Machnig said, adding that the bulk of 750 million euros would be earmarked for small and medium-sized enterprises.
Tax breaks part of the deal
Machnig explained that companies with a workforce of no more than 1,000 employees should be able to set against tax some 10 percent of their overall labor costs in the R&D sector.
There are also plans to set up a special innovation think tank that would model itself on the US Defense Advanced Research Projects Agency with a view to making German companies more competitive.
Germany recently met its objective of allocating 3.0 percent of its gross domestic project (GDP) to research and development. According to the Economics Ministry, the government is now aiming for 3.5 percent. Finance Minister Wolfgang Schäuble has already signaled his support for the new target, provided it's achievable without any fresh borrowing.
hg/rd (Reuters, AFP)