How can additional reforms for higher education, immigration, capital and labour markets improve innovation performance?
The supply of well trained and highly qualified labour is a key contribution to innovation performance, in particular the generation and diffusion of knowledge. The efficiency of the German tertiary education system is relatively low, as witnessed by long study durations and high drop-out rates. While the government plans to promote a competition based selection of a small number of additionally funded high performance universities, a broader approach is required to raise the performance of tertiary education overall. Within the university sector itself, a greater degree of competition among institutions should be established. Major measures should include: • Institutional reform in the secondary education system toward a clearer focus on outcomes, as outlined in the 2003 Economic Survey. • Better preparation in the non-academic track to direct university entry. • Bureaucratic allocation of students to universities should be given up and universities obtain more discretion to choose st
